Why is Rent still due during COVID-19?

328 Replies

Originally posted by @Heather Frusco : You obviously have a grudge against giving tenants options other than 'free'
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Not at all, Heather. I just think that if you are going to call non-paying residential tenants thieves -- and you are -- then you have to call non-paying commercial tenants thieves.


Stop whining.

 

Originally posted by @Dan Heuschele :
Originally posted by @Jay Hinrichs Hinrichs Hinrichs:
Originally posted by @David King:
Mary the state school taxes can't be paid late. The state will evict and take my houses. I have to collect over $400 per month to cover a $5,000 school tax on each of 10 properties. That's around $50,000. I am retired so this income is all I have. Please explain how your math works for me? Please don't tell me about how the tenants are going to come to my rescue when they get their jobs back I have way more experience than that. My houses are paid off. I have tried to refinance and they say I don't make enough to pay a mortgage. If you're going to tell me about a fairy tale organization that is going to come to my rescue please post their phone number so I can call them. My wife and I will be out of money if the rent doesn't come in.

Originally posted by @Mary Mitchell:

@Greg M. you left off utilities, mortgage companies, credit cards, banks.....etc.... and all of those are allowing payments to be delayed or added to the back of the amortization... utilities etc take amount owed and split it up over x months.....

 

Your in great shape more landlords should be like you..  your solution is to just liquidate .. sell one to weather the storm.. or sell them all go to cash.. which should be significant redeploy into assets that pay you monthly. problem solved.. if you have a lot of appreciation and a tax burden you could 1031 into a different asset class ?  But to think your in dire straights when your portfolio is paid for.. not sure about that. I just congratulate you on having it paid for and being in great shape.

 

 A mostly disagree with Jay again.  Twice in one thread, I thought it would never happen.   @David King should have never placed himself into this situation.  He acquired without allocating for reserves.  He did the classic over extend to acquire RE.  He should have never purchased the 10th RE.

So my view is there should not be more LL like him.  He should have acquired while keeping reserves.  Do you really think he can sell now?  It will be tough?  I have preached in numerous posts to not over extend and my definition of over extend is not to be made insolvent (as you point out he is not going to go bankrupt), but to be forced to sell at an inopportune time (i.e. if you were forced to sell in the GR you were over extended).  This qualifies as an inopportune time to sell.

 I mostly agree with Jay.

I have 3 tenants in 2 rentals in Hawaii. One of my units is already in escrow and will close shortly. I saw this coming from a mile away but unfortunately I could only sell the unit that was vacant. That rental has made me many times my DP already.

I could afford to pay the mortgage for 6 months lets say. But why should I? Terrible business model. So far, two out of the three tenants are telling me April is good, and the 3rd one is going to make partial payments hopefully. I will do this for 2 months. If it doesn't work, I will sell all the units and 1031 into a passive Delaware Statutory Trust (as I am already doing with the unit in escrow).

My tenants are working with me and I am working with them. I have never been so optimistic, carefree, and motivated as I am now (big part of this is daily gym/cardio)

Being a landlord is NOT the job for someone who wants to make everything out of their time in this life (fitness, travel freely on your terms all over the world, time with family and friends, meditation/time to reflect, learn languages). All of the landlords I know are lacking in most if not all of those things

Originally posted by @Mary M. :

@David King i too live off my rentals, which are paid in full.... so i get it.... my guess is property taxes will be delayed if this situation continues...  


 In NY there is a bill working through the Senate to FORGIVE 90 days of rent payments.  They are "balancing" that with mortgage forgiveness.  Sadly, my mortgage payments are less than half of all my monthly expenses for my properties.  Ironically, my TAXES are higher than my mortgage payments, and the state government is not currently entertaining any type of relief from me having to pay "the man" whilst permitting my tenants to live rent-free.

"We'll take 100% of your income away, but you only have to pay 60% of your expenses.  Cool?"

@Wesley W. @Jerry W.   Jerry had a talk with my Insurance carrier yeasterday ( my main one) State of Oregon insurance commissioner sent out a edict insurance companies CANNOT cancel for non payment during this crisis. I suggest everyone have that chat so you know where your at with insurance premiums.

Wesley I have never seen tax's differed in any state unless it was a certain abatement type / or redevelopment or the state had taken the property by escheatment.   Property tax's for rentals in my mind are a major item to look at when deciding to buy a rental in the first place.

We are all going to get through this.. I know we will. hang in there .. tough times dont last but tough people do.

@Jay Hinrichs

Thanks for the feedback about the insurance.  Taxes are a factor in where to buy RE, that is true.  But that is weighed against the rental revenue, sir.  It's balance on the books.  Right now, NY is looking to absolve renters from paying/owing any rent for 90 days, but we all have those other expenses.  If the state government REALLY wanted to assist the renters, they would provide a stimulus check and pay their rent during this time.

Here in NY it has become complete class warfare and I don't like it one bit.  They are trying to stick the landlords with the bill, here.  We provide an essential service (housing).  This is our JOB and how we provide for our own families.  No one is advocating that the hard working guy whom owns the corner deli provide cold cuts for free for the next 3 months.  Even if his own rent is forgiven, he still to pay his taxes, insurance, employees, payroll taxes, materials, supplies, the GOODS he is giving away, city permits and fees, etc. etc.

I have been a good soldier, keeping my head down and paying my ridiculously high taxes to this state for my entire life.  I've never said, "boo."  I provide safe, well-maintained homes for my tenants in exchange for a fair rent that is determined by external local market factors.  This, in turn, provides my household with income.  Again, no one is looking to pass legislation to force other businesses to provide services without any remuneration.

I get it that it's a crisis and we are all suffering.  But I am completely resentful at being singled out to take the bullet.

Originally posted by @Wesley W. :

@Jay Hinrichs

Thanks for the feedback about the insurance.  Taxes are a factor in where to buy RE, that is true.  But that is weighed against the rental revenue, sir.  It's balance on the books.  Right now, NY is looking to absolve renters from paying/owing any rent for 90 days, but we all have those other expenses.  If the state government REALLY wanted to assist the renters, they would provide a stimulus check and pay their rent during this time.

Here in NY it has become complete class warfare and I don't like it one bit.  They are trying to stick the landlords with the bill, here.  We provide an essential service (housing).  This is our JOB and how we provide for our own families.  No one is advocating that the hard working guy whom owns the corner deli provide cold cuts for free for the next 3 months.  Even if his own rent is forgiven, he still to pay his taxes, insurance, employees, payroll taxes, materials, supplies, the GOODS he is giving away, city permits and fees, etc. etc.

I have been a good soldier, keeping my head down and paying my ridiculously high taxes to this state for my entire life.  I've never said, "boo."  I provide safe, well-maintained homes for my tenants in exchange for a fair rent that is determined by external local market factors.  This, in turn, provides my household with income.  Again, no one is looking to pass legislation to force other businesses to provide services without any remuneration.

I get it that it's a crisis and we are all suffering.  But I am completely resentful at being singled out to take the bullet.

All good points. I suspect one issue is that mom and pop land lording is so fractured and there is no lobby or association for them. Like there is in MF .. ? you know the squeaky wheel. At least I am unaware of any associations that deal with land lords in the SFR space

Although the reality of the situation is we were all living our lives 40 days ago and it was like someone threw the switch.. pretty hard to appease every one in such a short time. When literally every single industry in the US has been affected expect maybe Amazon :).

Lastly lets just be thankful its ONLY 90 days if that's what your state comes up with.  

 

Originally posted by @Miguel Sanchez :

@Heather Frusco I guess it depends on your state. In New York rent and mortgages are suspended for 90 days.

You are wrong sir their is no suspension of rent in NY, that is a bad rumor being spread. 

Originally posted by @Wesley W. :


 In NY there is a bill working through the Senate to FORGIVE 90 days of rent payments.  They are "balancing" that with mortgage forgiveness.  Sadly, my mortgage payments are less than half of all my monthly expenses for my properties.  Ironically, my TAXES are higher than my mortgage payments, and the state government is not currently entertaining any type of relief from me having to pay "the man" whilst permitting my tenants to live rent-free.

"We'll take 100% of your income away, but you only have to pay 60% of your expenses.  Cool?"




Hopefully that bill wont pass..... that is unfair to tenants and landlords....  disallowing evictions for tenants affected by the coronavirus makes sense to me given the relief funds that are available.....   would be calling my representatives and letting them know loud and clear this is not a good solution ( i cant believe it will pass, esp with the funding available soon)

 

@Jay Hinrichs there are many lobbying groups for rental owners.... they do have a voice..


Also, just to clarify, if a LL has no reserves then they may not be able to help their tenant, but my main point is that tenants should not carry the burden of this alone, we all need to help so we all can be back on track With as little pain as possible. 

also, i may own my rentals free and clear, but I am right in the middle of a 1031 where that will no longer be the case..... 

@Miguel Sanchez

Not true.

Eviction is stopped. Rent is not.

Some mortgages for some property is skippable. But its not all mortgages.

Im not against working with the tenants, but get the facts correct.

Originally posted by @Dan Heuschele :
Originally posted by @Gary L Wallman:
Originally posted by @Dan Heuschele:
Originally posted by @David King:
Mary the state school taxes can't be paid late. The state will evict and take my houses. I have to collect over $400 per month to cover a $5,000 school tax on each of 10 properties. That's around $50,000. I am retired so this income is all I have. Please explain how your math works for me? Please don't tell me about how the tenants are going to come to my rescue when they get their jobs back I have way more experience than that. My houses are paid off. I have tried to refinance and they say I don't make enough to pay a mortgage. If you're going to tell me about a fairy tale organization that is going to come to my rescue please post their phone number so I can call them. My wife and I will be out of money if the rent doesn't come in.

Originally posted by @Mary Mitchell:

@Greg M. you left off utilities, mortgage companies, credit cards, banks.....etc.... and all of those are allowing payments to be delayed or added to the back of the amortization... utilities etc take amount owed and split it up over x months...
 

 4 people voted for this post???   You are a LL.   LL is a business.  A well run business has reserves and performs risk management.  Any financial planner would have told you to have 6 months reserve.  Clearly you should not have purchased property #10 (especially for all cash) that left you with zero reserves.  Likely you should not have purchased property #9 (again all cash).   You are the definition of over extended due to property acquisition.  This is something that is warned about everyday on BP and probably about once a week by yours truly.

You have risk due to over leverage.  Now that the risk has become a problem, you act like you played no role in creating the risk.  The reality is you created this high risk situation.  A situation that every financial planner would have pointed out is high risk.  A situation that was pointed out daily on BP as being risky.

I am not saying the tenants are coming to your rescue.  I do suspect that somehow you will be rescued, but your worse than the tenants that have no reserve.  Why?  Because you chose to invest in RE rather than maintain the reserve.  Versus many of the tenants are in their situation not due to having chose to invest the reserve, but because their living expenses do not allow them to create a reserve.

 Dan,

I couldn't disagree with you more (no offense). I have virtually no leverage and lots of reserves. But no amount of reserves is sufficient to offset a huge number of tenants in default. Make no mistake about it it is their default even if it's not entirely their fault.

When one invests in RE we plan (or should plan) for vacancies, cap-ex, taxes and other contingencies. The low rate of return we experience is based on the notion that RE is, by its very nature, a conservative investment. No one should or would expect the contingencies required to offset a large percentage of non-performing tenants. If that were entered into the equation, no one would invest in RE as the returns would be too small for the capital invested.

Let's face it, the government is the only entity large enough too create a buffer for the working folks. They should and that burden will be spread over the entire tax-paying populace.

Gary

 Our rents, including the STRs, are ~$45k.  I do as I preach.   We are in a position to handle an extended period of little/no rent.   We already know our STRs will have $0 rent.   That is ~$16k/month of lost rent. 

Do I want to lose thousands of dollars in lost rents? Of course not! I hope and expect to collect on most of any LTR deferred rent. I also am not expecting most of our tenants to not pay their rent, but I will not know until April 5th or so. I am projecting an 85% LTR rent payment. If I am correct, our rent, including the STR, will be just over $20k less than usual. That is a lot of money to be short in rent. Multiple similar months add up really fast. It will impact us by consuming reserves. It will not impact us by placing any of our RE in jeopardy or by making us not have money for essentials.

So similarly, I disagree with you.  It is possible to have reserves to handle a large number of tenants in default.   I know this because we can.  Certainly we do not want to consume our reserves.   You never know what reserves will be needed for and if they are consumed they should be replenished meaning less money available for vacations, toys, entertainment, and retirement. 

I also do not believe RE should be a low rate of return.   Because we do value adds extracting much of our initial investment, we have achieved outstanding RE returns.  Buy n hold RE is not passive.  If you are not obtain a return significantly better than the lifetime return of the S&P 500 (over 9% prior to this melt down), then you likely need to change something.  

Good luck

 Dan,

My average monthly rent collection is 3 times yours.  I only have 6 mortgages across 120+ doors, and those are ones I inherited through acquisition. I am closing on a 100k house today and a 140k one on the 31st. all cash. The point in this is that I have sufficient reserves to carry me for years and my returns have been excellent.

That being said, why would I want to give it all away now? I don't and I won't.

Good luck to you.

Gary

Originally posted by @Paul Dauffenbach:

@Jerry W. I am not going to read your post because it is too long. I don’t like rambling. However, to answer your question, I made that clear in my first post in response to @Heather Frusco.

And when you told @Jeff Cagle to "Google Me" please tell me you are making a reference to this scene

Originally posted by @Account Closed :

Credit card as method to pay rent auto qualifies as person recommending being Cold Hearted.

 If you were short on your rent/mortgage, would you put it on a credit card, or tell your landlord/bank.  Sorry, I can't pay it.

It's easy to paint the landlord as the moneybags bad guy(Because they're always rich, right?)  Landlords provide a useful service that others are not willing/able to provide for themselves (Otherwise they would be homeowners).  I agree putting the whole situation on the tenant is not the Christlike way to go, but painting the landlord as the bad guy for suggesting they use a credit card to pay their bills is a cop-out.  

The contractual responsibility is on the tenant.  The landlord should seek for a moral, positive solution to help as the specific situation demands.

Originally posted by @Heather Frusco :

I have had the opportunity to find and work with some of the best property managers (after many years) for our current properties. Over the years we have gone from me just treating them like just a service I hired to us working together toward a common goal and reaching a place of trust. So a few of our managers have reached out to us regarding their interactions with our tenants regarding the COVID-19 situation. So here goes: 

Rent is still due. Why? 

1 - Tenants should also have saved 'reserves' in place - so if they are already missing their rent payment come April just a few weeks into this, they are selectively deciding not to pay for their shelter in hopes of rent forgiveness - which is no different than shoplifting or any other use of a service with the knowing intention not to pay - no one to blame but one person.

2 - There are options available to Tenants: They can always put it on a credit card, which really already has a payment plan set up for them with their terms... a tenant can quite literally just pay the minimum until they get back on their fee, not suggesting anyone just may the minimum on a CC but that is an option, just like it is an option to put food, utilities and anything else on a credit card, shelter is no different. 

3 - There are loans available to Tenant: Applying for temporary loans to make ends meet are available and even more so now - and before anyone says you won't qualify - there's only one person to blame for that and yes... a CC is a type of loan when used - so if you have a CC... you can access to borrowed funds with a re-payment system. 

4 - Why does a tenant have to live in the current rental? - As if there aren't options...So if a single lady is renting a 4 bedroom waterfront rental for $3,000/mo. and then says she cant afford rent but continues to remain in place i.e. selectively choosing not to move out and just stay - wouldn't her moving out to 4 bedroom non-waterfront for $1,600/mo. make more sense? or better yet... downsize,  that is... if the tenant did really want to make it right. - so again selectively choosing to pass on the debt to someone else without taking 'sacrifice' for you situation under your own wing... is a choice. 

5 - One of our managers was trying to work out a deal with a tenant for deferred rent and contacted the employer to verify the situation before approving the deferred rent plan... The employer:

 'Yes unfortunately we had to lay him off due to this pandemic, but it just important you take that into consideration because everyone needs shelter, you should certainly let him stay'

---- Couldn't agree more everyone does need shelter just like everyone does need food and water, the baffling question is... if the this employer is worried about the employees than why not just continue to pay them a salary during this entire thing?.... oh yeah... because they want to pass the buck... essentially saying 'No, I cant afford to continue paying them because we have no customers but you should offer to continue paying for the mortgage on their rental even though your customer (tenant) is not paying you' - hypocrisy at its best. 

Albeit most that request assistance as it stands RIGHT NOW... only a few weeks into this situation... are unwilling to take on the responsibility for themselves onto their shoulders and find it just easier to put it onto someone else... which is why we have instructed our PM's to 1) verify the tenant's unemployment with connection to COVID-19, 2) allow them to take advantage of the options above, deffer rent for only those that truly absolutely need it, and file for eviction for all the rest to be in place when courts start the process... because as mentioned above options remain in helping tenants make ends meet but not paying for a product you are currently consuming is never going to be an option, if it is... next time you go to the grocery store for food... a first level necessity... try to walkout with a cart full of it without paying and see if they'll absorb the cost - the audacity of the manager even trying to stop you! 

 Yea but most people don't make enough to save very much for situations like this, and many live paycheck to paycheck. To be honest with you what you're saying technically makes sense. They signed an agreement, so they should honor it. However if people are losing their jobs and income because of this disaster you should just let them go.

You don't have to let them stay for 'free' but you don't have to make them rack up credit card debt and get in the hole because of a 'contract' either. Just let them choose to break the lease and go live with their parents/friends/family/etc. 

Originally posted by @Paul Gwilliam :
Originally posted by @Account Closed:

Credit card as method to pay rent auto qualifies as person recommending being Cold Hearted.

 If you were short on your rent/mortgage, would you put it on a credit card, or tell your landlord/bank.  Sorry, I can't pay it.

It's easy to paint the landlord as the moneybags bad guy(Because they're always rich, right?)  Landlords provide a useful service that others are not willing/able to provide for themselves (Otherwise they would be homeowners).  I agree putting the whole situation on the tenant is not the Christlike way to go, but painting the landlord as the bad guy for suggesting they use a credit card to pay their bills is a cop-out.  

The contractual responsibility is on the tenant.  The landlord should seek for a moral, positive solution to help as the specific situation demands.

I don't think someone telling a tenant to put the rent on a credit card is a good idea. Most people will have that debt for years later and not be able to pay it off. It will become a burden on them for years because most people don't make enough to pay it off quickly.

I think that landlords should make an exception for their tenants and NOT let them live for free but ALLOW them them to break the contract and leave the property to go live with parents/friends/etc.

I had a landlord tell a tenant that they should take the money out of their retirement account to pay rent. That to me is extremely selfish and beyond rude.

The truth is that the landlord (a professional investor) should have the reserves to cover situations like this.

Per Jerry W: "@John Clark , are you saying The Cheesecake factory not paying rent makes it ok for no one else to pay rent? I think the mall owners should be able to evict them if they choose, or not to. Suggesting someone is immoral for insisting upon them performing a contract they agreed to do is pretty judgemental."

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No, Jerry, I was not being judgmental. It was Heather Frosco who called non-paying tenants thieves (shoplifters to be precise). Likening non-paying residential tenants to thieves is what's judgmental. My point was that if residential tenants are thieves, what does that make commercial tenants who are behaving the same way? Heather Frusco wants to give corporations a pass, and I called her out on that.

So I am not saying that if corporations don't pay then no one has to pay. I'm saying that if one is going to label non-paying tenants as criminals, then you have to label all non-paying tenants as criminals.

Heather got the vapors.

I DO consider paying one's bills to be a moral obligation. Heather, for some unknown reason, wants to give corporations a pass. I refuse to give corporations a pass. I also think Heather is being inconsistent in her position, as she is refusing to condemn what she herself has labeledcriminal corporate behavior.

If Tenants refuse to put money aside for a rainy day and I have to use my rainy day funds, maybe it's time to raise the rent and I'll save it for them. 

Or

evict the tenants and put the homes up for sale. Cash out take my profits and move to a different business.

thats going to be my line to my tenants


One thing I’m surprised hasn’t come up in this thread: there is a public health reason for freezing evictions...if you want people sheltering in place you don’t want them moving if they don’t have to or packing courtrooms.

This may be less a socialist plot than one piece of as larger attempt to slow this thing. With forbearance and no evictions it is easier for landlords to cope and we should attempt to pass that along AS NEEDED

Everyone’s talking about responsibilities between landlords and tenants...we need to think about the responsibility of landlords to the larger public too.

@John Clark You seem to have a fixation on Cheesecake Factory and Heather Frosco.  I can see what you are trying to say, but I'm finding it difficult to see how her opinion (regardless of what it is) regarding Cheesecake Factory has any bearing on you.  I think in normal times it is a good idea to evict non-paying tenants as being a LL is a business and you have your own bills to pay.  These are not normal times, however.  As such people need to approach this situation accordingly.  If, like Heather, you will stick to your guns and attempt to evict non-paying tenants (or get them to go deep in debt to pay you) that is your prerogative.  If you want to give them a free-ride and absorb the hit on non-paying renters for the foreseeable future and 'share the pain' with them then that is also your prerogative.  In either case that is their business, their tenants, their rental contract, and their reputation as a LL on the line and not yours. 

I was in the middle of acquiring my first rental property but I have since backed out of that considering the financial landscape I see on the horizon.  As such I do not have tenants.  However, if I did I would handled them on a case-by-case basis.  It's difficult to place every person's situation in a convenient box and have a cookie-cutter response to it.  Sometimes people will take advantage of situations like this and not pay rent, that happens unfortunately as some people are users.  I believe that most will pay their rent if given some time to breathe as this whole event is unprecedented. 

I also believe that most renter's probably have little reserves and if they did they certainly wouldn't pay rent as food would rate higher than shelter (Maslow's Hierarchy of Needs). As such it is up to us to have such reserves and if we fail to have sufficient cash reserves than that blame is entirely on us as REI. Vacancy is factored into rents, so if a REI somehow does not have enough vacancy or capex, or other reserve saved up then they had weak financial planning and likely would get wiped out eventually. This calamity merely forced them to come to terms with their lack of finances far quicker than it would have taken normally, I think. Regardless of what everyone's situation is at this very moment one thing is clear; no one will underestimate having significant cash reserves from here onwards. I'll bet that those who survive this recession will likely boost their reserves considerably.

Originally posted by @Andrey Y. :
Originally posted by @Dan Heuschele:
Originally posted by @Jay Hinrichs Hinrichs Hinrichs:
Originally posted by @David King:
Mary the state school taxes can't be paid late. The state will evict and take my houses. I have to collect over $400 per month to cover a $5,000 school tax on each of 10 properties. That's around $50,000. I am retired so this income is all I have. Please explain how your math works for me? Please don't tell me about how the tenants are going to come to my rescue when they get their jobs back I have way more experience than that. My houses are paid off. I have tried to refinance and they say I don't make enough to pay a mortgage. If you're going to tell me about a fairy tale organization that is going to come to my rescue please post their phone number so I can call them. My wife and I will be out of money if the rent doesn't come in.

Originally posted by @Mary Mitchell:

@Greg M. you left off utilities, mortgage companies, credit cards, banks.....etc.... and all of those are allowing payments to be delayed or added to the back of the amortization... utilities etc take amount owed and split it up over x months.....

 

Your in great shape more landlords should be like you..  your solution is to just liquidate .. sell one to weather the storm.. or sell them all go to cash.. which should be significant redeploy into assets that pay you monthly. problem solved.. if you have a lot of appreciation and a tax burden you could 1031 into a different asset class ?  But to think your in dire straights when your portfolio is paid for.. not sure about that. I just congratulate you on having it paid for and being in great shape.

 

 A mostly disagree with Jay again.  Twice in one thread, I thought it would never happen.   @David King should have never placed himself into this situation.  He acquired without allocating for reserves.  He did the classic over extend to acquire RE.  He should have never purchased the 10th RE.

So my view is there should not be more LL like him.  He should have acquired while keeping reserves.  Do you really think he can sell now?  It will be tough?  I have preached in numerous posts to not over extend and my definition of over extend is not to be made insolvent (as you point out he is not going to go bankrupt), but to be forced to sell at an inopportune time (i.e. if you were forced to sell in the GR you were over extended).  This qualifies as an inopportune time to sell.

 I mostly agree with Jay.

I have 3 tenants in 2 rentals in Hawaii. One of my units is already in escrow and will close shortly. I saw this coming from a mile away but unfortunately I could only sell the unit that was vacant. That rental has made me many times my DP already.

I could afford to pay the mortgage for 6 months lets say. But why should I? Terrible business model. So far, two out of the three tenants are telling me April is good, and the 3rd one is going to make partial payments hopefully. I will do this for 2 months. If it doesn't work, I will sell all the units and 1031 into a passive Delaware Statutory Trust (as I am already doing with the unit in escrow).

My tenants are working with me and I am working with them. I have never been so optimistic, carefree, and motivated as I am now (big part of this is daily gym/cardio)

Being a landlord is NOT the job for someone who wants to make everything out of their time in this life (fitness, travel freely on your terms all over the world, time with family and friends, meditation/time to reflect, learn languages). All of the landlords I know are lacking in most if not all of those things

 My point must not have been clear because there is nothing in your post I disagree with. 

My point is we should not encourage people to purchase RE without having reserved to handle a $400/month total (between all properties) school tax.  So I do not want to encourage more LL to do the same.  He has virtually $0 reserve and may have to sell a property to cover a fairly small expense.  I want to encourage LL to have reserves to ride out situations like this.  

This is very different than the LL should be happy about having to use the reserves for this virus.  I am not happy about what this virus has already done to my net worth.  I’m not sure that covering expenses from rare events like this is a terrible business model but I do understand the sentiment.  

I also agree being an LL is not passive.  There are many investment options that are more passive (including Delaware trusts).  I believe most newbies underestimate the effort required. 

Good luck and stay healthy.