Small Landlords are choosing to sell
Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
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Small Landlords are choosing to sell
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Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
5yOriginally posted by @Nathan Gesner:
Originally posted by @Aj Parikh:
“So if you happen to be in a jurisdiction that allows you as the property owner to work on behalf of your resident, to be an advocate, to get those funds into their hands as quickly as possible, then you’re going to be much more successful,” said Robert Pinnegar, president and CEO of the National Apartment Association. “If you’re in jurisdictions that have taken an approach that is not so customer service friendly, then it’s going to take longer.”
I am in Fairfax County, VA and we have a landlord assistance program but the requirement is that the tenant has to sign a form and submit pay stubs. I don't know how any tenant who has not been paying rent would help out a landlord to get funds. For example, my tenant has not paid rent in the past 3 months and has refused to answer calls, texts or emails and has not followed any of the notices we have posted on her front door.
That's exactly it. The current system requires the Tenant to participate. Since a large percentage of them are capable of paying rent but simply refusing to do so, this doesn't help the Landlord.
Simple fix: Create a government affidavit that must be filled out by the Tenant to show they are suffering a hardship due to COVID. They attach any supporting documentation and authorize the Landlord to use the information to apply for assistance. Landlord uses the form to apply for assistance. Any renter failing to pay rent and failing to fill out an affidavit is still subject to eviction.
Problem solved.
Slow down, we can't actually solve problems. We sure can't solve a problem with one paragraph. Here is the better approach:
1. Have politicians debate it for months.
2. Pay people to study the issue.
3. Have politicians debate the issue more.
4. Draft a gigantic bill to address the issue and include a thousand unrelated things in the bill. (Mostly payoff for political supporters).
5. Allocate billions to the solve the problem.
6. Repeat steps 3-5.
7. Have the media write articles about how the problem is evil business owners. Make people argue with each other, so they don't see the real problem. This prevents the naïve masses from realizing the politicians are the problem.
8. Politicians run for re-election and offer to solve the problem. They blame the other party for not solving it and offer to fix all your problems.
9. Go to step 1 and repeat the cycle.
132 Replies
Originally posted by @Greg M.:
Originally posted by @Jim K.:
Originally posted by @Greg M.:
Originally posted by @Brian Garlington:
"Yawn"......(This is me getting ready to sound like a broken record....here it goes.)
That is exactly why I love to have PROPERLY SCREENED Section 8 tenants in my properties.
Did I mention the rent money is guaranteed?
Your business model works well with S8. S8 can work great in some areas, but it's not viable for a lot of areas. I just checked. They'll pay me $1765 a month for a unit I currently rent (a few hundred under market) for $3200. Where do I sign up? 😏
Come on, Greg. Your posts are usually among the best on this site, but come on.
Median renter's income in this country is $37,300, compared with $73,100 for homeowners. Nobody twisted your arm to rent out 3-grand-plus units and think of yourself as occupying a long-term viable market segment. Yeah, the gubmint is holding the ax, but you stretched your neck out on the block for them and called their momma not-so-nice names.Only trying to point out that S8 isn't a viable business option in every area. FYI, the $3200 unit isn't that nice. It's just in an extremely desirable area.
I've checked S8 rents over the years and they always seem to be behind. I don't know if it is because LA is so big that they average it out from awful areas to the nice areas or they are just clueless, but it always seems to be 10%-30% below the current rents in the decent (not great) areas. Probably why there are so few units that S8 people can rent.
At the same time, I see people from other states that say that S8 pays more than average rent.
Viable business model for some, but not others...
I understand what you're saying completely when you put it that way. We have exactly the situation you describe here. Real money in low C-class, if you're willing to put up with the headaches, is most definitely in Section 8 here. A/B-class rental properties in Southern California...not so much, I'm sure.
Originally posted by @Shawn L.:
Originally posted by @Greg M.:
Originally posted by @Jim K.:
Originally posted by @Greg M.:
Originally posted by @Brian Garlington:
"Yawn"......(This is me getting ready to sound like a broken record....here it goes.)
That is exactly why I love to have PROPERLY SCREENED Section 8 tenants in my properties.
Did I mention the rent money is guaranteed?
Your business model works well with S8. S8 can work great in some areas, but it's not viable for a lot of areas. I just checked. They'll pay me $1765 a month for a unit I currently rent (a few hundred under market) for $3200. Where do I sign up? 😏
Come on, Greg. Your posts are usually among the best on this site, but come on.
Median renter's income in this country is $37,300, compared with $73,100 for homeowners. Nobody twisted your arm to rent out 3-grand-plus units and think of yourself as occupying a long-term viable market segment. Yeah, the gubmint is holding the ax, but you stretched your neck out on the block for them and called their momma not-so-nice names.Only trying to point out that S8 isn't a viable business option in every area. FYI, the $3200 unit isn't that nice. It's just in an extremely desirable area.
I've checked S8 rents over the years and they always seem to be behind. I don't know if it is because LA is so big that they average it out from awful areas to the nice areas or they are just clueless, but it always seems to be 10%-30% below the current rents in the decent (not great) areas. Probably why there are so few units that S8 people can rent.
At the same time, I see people from other states that say that S8 pays more than average rent.
Viable business model for some, but not others...
Yeah, not sure why you're being called out for renting a unit at market rate. Not that I have any clue where in LA your units are but a $3200 non-lux apartment is not something that surprises me in the least. $750 apartments are generally not prevalent in the coastal metro areas.
Shawn, I'm not calling Greg out. I am pointing out that there's a ceiling on what high-priced residential rentals can bring in and still be viable over the long haul in a variety of economic conditions. You invest in more modest properties, you have a higher chance of riding out the unstable fluctuations of the economy. You invest in expensive residential properties, you have a higher chance of the economy riding you during those unstable fluctuations.
Riding you hard and putting you away wet.Originally posted by @Jim K.:
Originally posted by @Shawn L.:
Originally posted by @Greg M.:
Originally posted by @Jim K.:
Originally posted by @Greg M.:
Originally posted by @Brian Garlington:
"Yawn"......(This is me getting ready to sound like a broken record....here it goes.)
That is exactly why I love to have PROPERLY SCREENED Section 8 tenants in my properties.
Did I mention the rent money is guaranteed?
Your business model works well with S8. S8 can work great in some areas, but it's not viable for a lot of areas. I just checked. They'll pay me $1765 a month for a unit I currently rent (a few hundred under market) for $3200. Where do I sign up? 😏
Come on, Greg. Your posts are usually among the best on this site, but come on.
Median renter's income in this country is $37,300, compared with $73,100 for homeowners. Nobody twisted your arm to rent out 3-grand-plus units and think of yourself as occupying a long-term viable market segment. Yeah, the gubmint is holding the ax, but you stretched your neck out on the block for them and called their momma not-so-nice names.Only trying to point out that S8 isn't a viable business option in every area. FYI, the $3200 unit isn't that nice. It's just in an extremely desirable area.
I've checked S8 rents over the years and they always seem to be behind. I don't know if it is because LA is so big that they average it out from awful areas to the nice areas or they are just clueless, but it always seems to be 10%-30% below the current rents in the decent (not great) areas. Probably why there are so few units that S8 people can rent.
At the same time, I see people from other states that say that S8 pays more than average rent.
Viable business model for some, but not others...
Yeah, not sure why you're being called out for renting a unit at market rate. Not that I have any clue where in LA your units are but a $3200 non-lux apartment is not something that surprises me in the least. $750 apartments are generally not prevalent in the coastal metro areas.
Shawn, I'm not calling Greg out. I am pointing out that there's a ceiling on what high-priced residential rentals can bring in and still be viable over the long haul in a variety of economic conditions. You invest in more modest properties, you have a higher chance of riding out the unstable fluctuations of the economy. You invest in expensive residential properties, you have a higher chance of the economy riding you during those unstable fluctuations.
Riding you hard and putting you away wet.I hear what you're saying, but these things are market dependent. Comparing what Greg gets for rent in a highly desirable location in LA to the median income of those who rent for the entire country is like comparing apples to bowling balls. That was more my point as it does not really provide an accurate picture. A $3,200 apartment in a nice part of LA looks drastically different than a $3,200 apartment in the vast majority of the US. The median income will as well.
@JR M. I am also baffled why the feds are continuing this nonsense. They’ve essentially put the responsibility of housing citizens to landlords, and left landlords to “figure something out”. Time figuring out local assistance/mortgage restructuring for landlords, costs money. Lawyers and accountants costs money. I get that many people might have not been able to pay rent for a month or two- but up to this point is just insane. I’m lucky that my units are rented by military folks, but I read these stories and shudder. I don’t think I have the reserves to cover $100s of thousands of loss like some ppl who posted here. The hardest hit are the mom and pop ops who are often not even full time REInvestors.
- 5yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @Jim K.:
Originally posted by @Shawn L.:
Originally posted by @Greg M.:
Originally posted by @Jim K.:
Originally posted by @Greg M.:
Originally posted by @Brian Garlington:
"Yawn"......(This is me getting ready to sound like a broken record....here it goes.)
That is exactly why I love to have PROPERLY SCREENED Section 8 tenants in my properties.
Did I mention the rent money is guaranteed?
Your business model works well with S8. S8 can work great in some areas, but it's not viable for a lot of areas. I just checked. They'll pay me $1765 a month for a unit I currently rent (a few hundred under market) for $3200. Where do I sign up? 😏
Come on, Greg. Your posts are usually among the best on this site, but come on.
Median renter's income in this country is $37,300, compared with $73,100 for homeowners. Nobody twisted your arm to rent out 3-grand-plus units and think of yourself as occupying a long-term viable market segment. Yeah, the gubmint is holding the ax, but you stretched your neck out on the block for them and called their momma not-so-nice names.Only trying to point out that S8 isn't a viable business option in every area. FYI, the $3200 unit isn't that nice. It's just in an extremely desirable area.
I've checked S8 rents over the years and they always seem to be behind. I don't know if it is because LA is so big that they average it out from awful areas to the nice areas or they are just clueless, but it always seems to be 10%-30% below the current rents in the decent (not great) areas. Probably why there are so few units that S8 people can rent.
At the same time, I see people from other states that say that S8 pays more than average rent.
Viable business model for some, but not others...
Yeah, not sure why you're being called out for renting a unit at market rate. Not that I have any clue where in LA your units are but a $3200 non-lux apartment is not something that surprises me in the least. $750 apartments are generally not prevalent in the coastal metro areas.
Shawn, I'm not calling Greg out. I am pointing out that there's a ceiling on what high-priced residential rentals can bring in and still be viable over the long haul in a variety of economic conditions. You invest in more modest properties, you have a higher chance of riding out the unstable fluctuations of the economy. You invest in expensive residential properties, you have a higher chance of the economy riding you during those unstable fluctuations.
Riding you hard and putting you away wet.I agree there is ONLY so high rent can go in areas of stable mid level or service industry jobs.. just B/C a landlord is upset and is going to show them who is boss by raising the rent substantially I dont see how that works I see that unit sitting vacant and then as you have vacancy rents start to fall back to the mean of what people can truly afford I mean if you use the 800 rent and the standard 3X rent that leaves someone what 1600 a month to live on .. income stays the same and move the rent up to 1k now they either have very little to live on or simply dont qualify since they now need 3k a month ..
This also in a way reminds me of the GFC when U had all those strategic foreclosures.. in states with no deficiency judgement possible people did this in droves although there were always 1099C threat but then govmit came out and put a moratorium on that.. So you had owners able to walk with the only thing that harmed them was Fico and what equity they put into the home up front which in many cases of the no down lending times was not much.
Originally posted by @JD Martin:
Originally posted by @James Swindle:
My question is how are your local courts viewing the CDC directive? There are many jurisdictions who recognize the CDC has no authority to keep an eviction from occurring.
The whole thing almost certainly ends up at the Supreme Court, but by the time it gets there it will be over and a moot point. Only good for future reference. It is an important constitutional question, however, and I would just about guarantee it will be heard. This is a huge 5th amendment issue in both the takings clause (government appropriation of private property without compensation) and due process (the rights of the citizenry to a fair legal process).
True. However, this would in fact prevent this from happening again. Not trying to make this political, and in no way did I support the former Presidential admin (I'm a reg democrat), but the powers that be wanted him out. Thus, a worldwide pandemic was a big enough coup to remove him. We now have an admin that is going to throw money at the symptom, but not cure the issue. We will have to hang tough for a year and things will improve for land holders (we're not really landlords anymore since the gov't took financial possession of our rents en masse). I figure it will be very tough for any tenant with below average credit to rent in the future without a gov't guarantee. The people en masse just think of today, not tomorrow.
Originally posted by @John Pray:
@Greg M.
"Rising tides lifts all boats" means that everyone is above water, and in a better position to live. Your comments suggest that you would only feel successful if your boat is higher than the others.
It makes no sense. It completely ignores that resources are limited. You can change who is in a better position, but it's going to be a zero sum gain. As long as we're referring to limited resources, the tide can rise as high as you like, but there will always be people at the low end that will be unable to obtain those resources.
And I don't measure my success against others. Life's too short to concern yourself with what others have. I set personal goals and work to achieve them.
- Rental Property Investor · Phoenix, AZ · Member since 2013 · 919 posts · 911 votes5y
@Mike A., gonna be longer than that if the moratoriums aren't stopped. Personally, I thought this (March 31) was it. Obviously the govt has other ideas.
Don't they understand ALL the real estate eviction attorneys they put back on the bench, waiting for their turn?
Housing, at least in my area, has experienced significant inflation. Both on the sales and the rent side. I can't help but think the rent side is more of a 'covid surcharge' like we now find at our diners.
I've seen some super crazy rental requirements that I didn't see a year ago. Example: 3x rent = income AND 680+ FICO. If you don't have 3x rent, deposit doubles. If you don't have 680, then they have a sliding scale based on DTI. If you don't meet those requirements, security deposit is increased. Yikes!
Renters are ALMOST having to have buyer-like qualifications for RENT! And the longer the moratorium lasts, the worse that is going to get, IMHO.
I can't even imagine what is like in NY or Chicago where the moratorium has been abused by tenants.
Originally posted by @Shawn L.:
Originally posted by @Jim K.:
Originally posted by @Shawn L.:
Originally posted by @Greg M.:
Originally posted by @Jim K.:
Originally posted by @Greg M.:
Originally posted by @Brian Garlington:
"Yawn"......(This is me getting ready to sound like a broken record....here it goes.)
That is exactly why I love to have PROPERLY SCREENED Section 8 tenants in my properties.
Did I mention the rent money is guaranteed?
Your business model works well with S8. S8 can work great in some areas, but it's not viable for a lot of areas. I just checked. They'll pay me $1765 a month for a unit I currently rent (a few hundred under market) for $3200. Where do I sign up? 😏
Come on, Greg. Your posts are usually among the best on this site, but come on.
Median renter's income in this country is $37,300, compared with $73,100 for homeowners. Nobody twisted your arm to rent out 3-grand-plus units and think of yourself as occupying a long-term viable market segment. Yeah, the gubmint is holding the ax, but you stretched your neck out on the block for them and called their momma not-so-nice names.Only trying to point out that S8 isn't a viable business option in every area. FYI, the $3200 unit isn't that nice. It's just in an extremely desirable area.
I've checked S8 rents over the years and they always seem to be behind. I don't know if it is because LA is so big that they average it out from awful areas to the nice areas or they are just clueless, but it always seems to be 10%-30% below the current rents in the decent (not great) areas. Probably why there are so few units that S8 people can rent.
At the same time, I see people from other states that say that S8 pays more than average rent.
Viable business model for some, but not others...
Yeah, not sure why you're being called out for renting a unit at market rate. Not that I have any clue where in LA your units are but a $3200 non-lux apartment is not something that surprises me in the least. $750 apartments are generally not prevalent in the coastal metro areas.
Shawn, I'm not calling Greg out. I am pointing out that there's a ceiling on what high-priced residential rentals can bring in and still be viable over the long haul in a variety of economic conditions. You invest in more modest properties, you have a higher chance of riding out the unstable fluctuations of the economy. You invest in expensive residential properties, you have a higher chance of the economy riding you during those unstable fluctuations.
Riding you hard and putting you away wet.I hear what you're saying, but these things are market dependent. Comparing what Greg gets for rent in a highly desirable location in LA to the median income of those who rent for the entire country is like comparing apples to bowling balls. That was more my point as it does not really provide an accurate picture. A $3,200 apartment in a nice part of LA looks drastically different than a $3,200 apartment in the vast majority of the US. The median income will as well.
Yeah, I get that. But you're imagining that expensive markets have a rigidity they don't really always have. The smaller the geographical area we're discussing, the more likely potential renters will be willing to go out of the area and drive further to find lower rent in the event of a major market disruption.
Let's say you're a grad student, and your regular rental is in downtown Pittsburgh within walking distance from Dusquesne University. It's going to cost $1600/month to rent a two-bedroom there, more for two one-bedrooms, the apartments are tiny, there is coin-operated laundry in the basement, the apartment buildings are run by professional management that care deeply about cutting corners and maximizing the take per unit.
A pandemic comes along. Your mom is going to want you to be living in a less populated location, in an apartment or house less exposed to COVID, yet with services in place if things go wrong. So, since she's in real estate and knows the area rather well, she looks six miles out along the main travel arteries and finds this spacious 2-bedroom apartment in a duplex run by an on-site landlord. Snaps it up for her daughter and her friend, at a price that would be a steal if the apartment was next to the university.
COVID threw a wrench into the walking-to-campus-every-day plan. The market changed suddenly and drastically.
Now the 1-bedroom sky-high student rentals downtown with the grudging service are hurting while the students six miles out are discovering it's much nicer living over a handyman on call who obligingly wires their apartment for ethernet. By January of that academic year the two students are locking down occupancy for next year.
Yes, this is exactly what happened to me. What were thought to be normal market conditions downtown next to a small, private school died a quick death last year, and I suspect I'm going to be renting my upstairs out to Duquesne grad students who spread the word to their friends for the rest of the time I own this duplex.Originally posted by @Charles Carillo:
A perfect example of why you should have ample reserves when investing into real estate.
Yeah, you should have ample reserves because you never know when you're property might be confiscated by the government by force and you end up not being compensated for it.
More like this is a perfect example why we need a second amendment and if this happens again we need to protect our property rights against a tyrannical government with force.Originally posted by @Aj Parikh:
“So if you happen to be in a jurisdiction that allows you as the property owner to work on behalf of your resident, to be an advocate, to get those funds into their hands as quickly as possible, then you’re going to be much more successful,” said Robert Pinnegar, president and CEO of the National Apartment Association. “If you’re in jurisdictions that have taken an approach that is not so customer service friendly, then it’s going to take longer.”
I am in Fairfax County, VA and we have a landlord assistance program but the requirement is that the tenant has to sign a form and submit pay stubs. I don't know how any tenant who has not been paying rent would help out a landlord to get funds. For example, my tenant has not paid rent in the past 3 months and has refused to answer calls, texts or emails and has not followed any of the notices we have posted on her front door.
*don't take my advice* but what I, in theory of course, might do is kick in their door, grab their crap, throw it in the street, change the locks, and take my chances.
Of course, this is landlord fan fiction so
Originally posted by @Account Closed:
Originally posted by @Greg M.:
Actually, this isn't a bad thing. For those of us who planned, have adequate reserves, and can ride out this short-term screw job, we will have a lot less rental competition, be able to be much more selective on our new tenants, and be able to increase the rent significantly. What, your credit score is only 715 and your income is just 5X rent. Sorry, but you don't meet our minimum qualifications.
"
There will still be renters, but they shouldn’t have to bear the burden of your revengeComments like this need to be forwarded on to elected officials and regulators so they can take active steps to prevent this kind of thing. Probably a good idea to share this with news media as well.
I get you all are angry because there are some people taking advantage of the situation but there’s no need to be petty. If the end result of this is that more people end up owning their homes instead of renting them, that’s not a bad thing. There will still be renters, but they shouldn’t have to bear the burden of your revenge"There will still be renters, but they shouldn’t have to bear the burden of your revenge"
The renters are bearing the burden of a RATIONAL response to the government saying "we may opt to allow tenants to stay without paying rent". If that's the message they're sending, to "help" marginal tenants, then wtf do they think? That there wont' be any downside? People will NATURALLY tighten standards.In many of our properties we offer 'second chances'. People with bad credit, evictions, etc. We do so because we know if they don't pay we can evict them. If it were hard to evict them, then there is NO WAY we'd take a chance. So if you want to help people with bad credit and rental history then you need to -- ironically -- make it easier to boot them when they fail to pay.
How is this not clear?
Originally posted by @Dan H.:
Originally posted by @Account Closed:
Originally posted by @Greg M.:
Actually, this isn't a bad thing. For those of us who planned, have adequate reserves, and can ride out this short-term screw job, we will have a lot less rental competition, be able to be much more selective on our new tenants, and be able to increase the rent significantly. What, your credit score is only 715 and your income is just 5X rent. Sorry, but you don't meet our minimum qualifications.
Comments like this need to be forwarded on to elected officials and regulators so they can take active steps to prevent this kind of thing. Probably a good idea to share this with news media as well.
I get you all are angry because there are some people taking advantage of the situation but there’s no need to be petty. If the end result of this is that more people end up owning their homes instead of renting them, that’s not a bad thing. There will still be renters, but they shouldn’t have to bear the burden of your revengeI did not look at it as revenge. I look at it as adjusting to the new/increased risks. As risks increase or new risks are identified, steps are taking to minimize those risks. These steps can include higher income criteria and higher credit scores.
Do you believe as new risks are identified that the LL should do nothing to minimize the risks?
I do believe this will make it harder for some marginal tenants to find quality housing. Blame the policies that lead to the issue and not the LL who is reacting, in an appropriate manner, in response to the new/increased risks.
We will be definitely raising our tenant criteria. We also expect rents in relation to market property value to increase over time. In our market the property prices rose significantly in 2020, but rents were flat. A reason rents were flat was due to not wanting to increase risk of a non-paying tenant when there has been minimal recourse. After the various evictions occur and the vacancy recovers to historical normal, I expect we will see increased rents; rents that will raise the 2019 rent/value ratio. It has to happen. Increased risk. Decreased return. Produce a Result of increased rent.
It is not revenge; it is reacting to new/increased risks.
Prefect reply. If I saw this first I'd have not bothered to chime in. You're 100% correct.
Originally posted by @Jim K.:
Originally posted by @Shawn L.:
Originally posted by @Jim K.:
Originally posted by @Shawn L.:
Originally posted by @Greg M.:
Originally posted by @Jim K.:
Originally posted by @Greg M.:
Originally posted by @Brian Garlington:
"Yawn"......(This is me getting ready to sound like a broken record....here it goes.)
That is exactly why I love to have PROPERLY SCREENED Section 8 tenants in my properties.
Did I mention the rent money is guaranteed?
Your business model works well with S8. S8 can work great in some areas, but it's not viable for a lot of areas. I just checked. They'll pay me $1765 a month for a unit I currently rent (a few hundred under market) for $3200. Where do I sign up? 😏
Come on, Greg. Your posts are usually among the best on this site, but come on.
Median renter's income in this country is $37,300, compared with $73,100 for homeowners. Nobody twisted your arm to rent out 3-grand-plus units and think of yourself as occupying a long-term viable market segment. Yeah, the gubmint is holding the ax, but you stretched your neck out on the block for them and called their momma not-so-nice names.Only trying to point out that S8 isn't a viable business option in every area. FYI, the $3200 unit isn't that nice. It's just in an extremely desirable area.
I've checked S8 rents over the years and they always seem to be behind. I don't know if it is because LA is so big that they average it out from awful areas to the nice areas or they are just clueless, but it always seems to be 10%-30% below the current rents in the decent (not great) areas. Probably why there are so few units that S8 people can rent.
At the same time, I see people from other states that say that S8 pays more than average rent.
Viable business model for some, but not others...
Yeah, not sure why you're being called out for renting a unit at market rate. Not that I have any clue where in LA your units are but a $3200 non-lux apartment is not something that surprises me in the least. $750 apartments are generally not prevalent in the coastal metro areas.
Shawn, I'm not calling Greg out. I am pointing out that there's a ceiling on what high-priced residential rentals can bring in and still be viable over the long haul in a variety of economic conditions. You invest in more modest properties, you have a higher chance of riding out the unstable fluctuations of the economy. You invest in expensive residential properties, you have a higher chance of the economy riding you during those unstable fluctuations.
Riding you hard and putting you away wet.I hear what you're saying, but these things are market dependent. Comparing what Greg gets for rent in a highly desirable location in LA to the median income of those who rent for the entire country is like comparing apples to bowling balls. That was more my point as it does not really provide an accurate picture. A $3,200 apartment in a nice part of LA looks drastically different than a $3,200 apartment in the vast majority of the US. The median income will as well.
Yeah, I get that. But you're imagining that expensive markets have a rigidity they don't really always have. The smaller the geographical area we're discussing, the more likely potential renters will be willing to go out of the area and drive further to find lower rent in the event of a major market disruption.
Let's say you're a grad student, and your regular rental is in downtown Pittsburgh within walking distance from Dusquesne University. It's going to cost $1600/month to rent a two-bedroom there, more for two one-bedrooms, the apartments are tiny, there is coin-operated laundry in the basement, the apartment buildings are run by professional management that care deeply about cutting corners and maximizing the take per unit.
A pandemic comes along. Your mom is going to want you to be living in a less populated location, in an apartment or house less exposed to COVID, yet with services in place if things go wrong. So, since she's in real estate and knows the area rather well, she looks six miles out along the main travel arteries and finds this spacious 2-bedroom apartment in a duplex run by an on-site landlord. Snaps it up for her daughter and her friend, at a price that would be a steal if the apartment was next to the university.
COVID threw a wrench into the walking-to-campus-every-day plan. The market changed suddenly and drastically.
Now the 1-bedroom sky-high student rentals downtown with the grudging service are hurting while the students six miles out are discovering it's much nicer living over a handyman on call who obligingly wires their apartment for ethernet. By January of that academic year the two students are locking down occupancy for next year.
Yes, this is exactly what happened to me. What were thought to be normal market conditions downtown next to a small, private school died a quick death last year, and I suspect I'm going to be renting my upstairs out to Duquesne grad students who spread the word to their friends for the rest of the time I own this duplex.You’re talking about what happened during a pandemic that caught everyone by surprise. Not really fair to compare that to your typical downturn which your other responses reference.
Anyways I have no dog in this fight and I’m not trying to argue with you. Simply pointing out that rent in one market has little correlation to rents in other parts of the country. I know you know that. And we all know that ultra lux A+ apartments tend to have higher effective vacancies/ loss to lease in a down market but it does not sound like that describes Greg’s unit based on his post.
- Member since 2021 · 1 post · 1 vote5y
@Bjorn Ahlblad I want to sell with paying tenants. I want to 1031 into something different.
- Rental Property Investor · Phoenix, AZ · Member since 2013 · 919 posts · 911 votes5y
I think this is when you become 'friends' with the local biker gang. Free beer, pizza & food on Saturday night, since there is no longer any 'squatting' law enforced.
I wonder how fast your non-paying tenant would move in those circumstances? Yikes!
We used to be a country of laws, but we are quickly become lawless. I wonder how they think this would turn out?
- 5yBjorn AhlbladPro MemberInvestor · Shelton, WA · Member since 2017 · 6k+ posts · 6k+ votes
Originally posted by @Barbara Bingham:
@Bjorn Ahlblad I want to sell with paying tenants. I want to 1031 into something different.
We think alike. I have a duplex in a 1031x great tenants; but I'd like to roll it into something larger. I have a 12 unit that is a wonderful performing property. Unfortunately they are in short supply-like most decent properties today.
- Rental Property Investor · Phoenix, AZ · Member since 2013 · 919 posts · 911 votes5y
@Bjorn Ahlblad, you may want to 1031 sooner than later. Our new president is considering getting rid of the 1031 exchange or massively modifying it.
- 5yAlecia LovelessPro MemberMember since 2019 · 3k+ posts · 2k+ votes
@Nathan G. I bought a house in good shape last May. Due to personal reasons it is only now done being renovated. I realized a month ago it would take me 35 years of renting it to make what I can get flipping it. I plan to do a 1031 and buy a multi that will recover its value faster. It only makes sense to sell.
Originally posted by @Alan Grobmeier:
I think this is when you become 'friends' with the local biker gang. Free beer, pizza & food on Saturday night, since there is no longer any 'squatting' law enforced.
I wonder how fast your non-paying tenant would move in those circumstances? Yikes!
We used to be a country of laws, but we are quickly become lawless. I wonder how they think this would turn out?
My uncle used to be a hang-around for the Hell's Angels. Back in the 80s, it was commonplace for all kinds of people, including law enforcement, to hire them to harass people they didn't like.
I think in this day and age, you do that and the feds knock on your door. That has happened to me ONCE. You will feel mighty small when they get you down in the federal courthouse answering an Assistant US Attorney's questions. Zero sense of humor, these people, believe me.- Member since 2020 · 36 posts · 18 votes5y
@Brian Garlington this is EXACTLY why I’m going This route! Section 8 is the rent that keeps on giving through all the storms!
Originally posted by @Jim K.:
Originally posted by @Alan Grobmeier:
I think this is when you become 'friends' with the local biker gang. Free beer, pizza & food on Saturday night, since there is no longer any 'squatting' law enforced.
I wonder how fast your non-paying tenant would move in those circumstances? Yikes!
We used to be a country of laws, but we are quickly become lawless. I wonder how they think this would turn out?
My uncle used to be a hang-around for the Hell's Angels. Back in the 80s, it was commonplace for all kinds of people, including law enforcement, to hire them to harass people they didn't like.
I think in this day and age, you do that and the feds knock on your door. That has happened to me ONCE. You will feel mighty small when they get you down in the federal courthouse answering an Assistant US Attorney's questions. Zero sense of humor, these people, believe me.That's when you go with a lawyer and just repeat the following: I am sorry, but I just do not recall. You cannot be convicted of anything if you say, you just do not recall.
- 5yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @Alan Grobmeier:
I think this is when you become 'friends' with the local biker gang. Free beer, pizza & food on Saturday night, since there is no longer any 'squatting' law enforced.
I wonder how fast your non-paying tenant would move in those circumstances? Yikes!
We used to be a country of laws, but we are quickly become lawless. I wonder how they think this would turn out?
this one hits home.. my dad bought a 1200 acre ranch in Northern Ca CIRCA 1969 I think he paid about 150k for it.. and over the course of owning it 7 years we / family split it into 20 acre parcels and slowly sold it all off. Its where I spent my formative years :) But the problem we had is when we would leave town to drive back home on Sunday night ( lived in Cupertino) the locals would raid the ranch .. Mainly poachers. So in Cupertino just a few blocks up from my grade school was the club house for the Gypsy Jokers.. My dad waltz's in there and says hey guys I own this ranch I have multiple houses on it and you guys are welcome to one of them.. in exchange for using it for free I want you to keep the locals off our property.. IT worked. no one screwed with our property after that.. My Dad was so Cool I mean who would do that. LOL
@Greg M Yes my issue with Section8 Also. My one S8 is the lowest Rent of all of all my Rents and I have not been able to raise it historically at the same rate as other similar units. I only raise rents once a year anyway but I have to ask S8 for approval and so the ask always needs to be something I believe they will approve. I inherited the tenant and have honored the contract but I feel I can do better on the open Market. Recently the S8 amount dropped to $0 for a month and previously S8 was only paying about 20% anyway. I called S8 and asked how to terminate since they were not offering aid anyway and they said I needed to put in a 45 to 60 day notice even though S8 wasn't paying anything at all! They recently did go back to the 20% . Plus over time I actually go out of my way to improve properties anyway and since the last inspection I had put in all new Vinyl windows and brand new linoleum in the Bathroom, Dining, Kitchen, and Entry way which had cost Thousands of dollars. Then S8 had the gall of writing the unit up for a small carpet tear which cost almost nothing to fix but after spending thousands on voluntary improvements the write up totally irritated me to be honest. I just don't appreciate the control S8 has over the landlord. Anyway, I have stayed in the program for the sake of tenant who has been very diligent in the rental relationship. However I have come close to withdrawing and I will not accept future S8 if I can help it!
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