Threats to property owner

[Kenton C.]

Hi BP,

Question about owning buy and hold single family homes. Is there such a thing as having too much rental property as passive sources of income? The reason I ask this is I am wondering how macroeconomic conditions such as the 08 crisis affected vacancy rates and those holding and renting out single family homes.

If for some reason, I cannot find a tenant for a long period of time 6+ months, what are my exit options? I can pay for the mortgage out of pocket, but what other exit opportunities do I have? 

Thanks!

[Glenn McCrorey]

Too much passive income?  Is this rhetorical or a trick question?  You "can" get in over your head but what if you're counting on $200 per door and the market shifts downward and you average $100 a door?  That would be the time to buy even more.  A six month vacancy means you are charging too much.  It's OK to break even on some properties or even lose money on a few if your portfolio is moving in the right direction generally.  The market ebbs and flows.  Buy carefully but jump in and ride it out if you are investing for the long term as a buy and hold investor.  You can prune the dead wood every year but the transactional costs in real estate are to be avoided if possible.  Hope my opinion helps and good luck!