Anyone concerned about a pandemic sequel?

Question

So I really like STRs and thinking about how much to put into it.

Hopefully nothing like COVID happens again but it could. Regular properties are probably in a better position because people always need a place to stay, and if I'm not mistaken back during COVID if you had a tenant who couldn't work you could call your bank and pause the mortgage.

Like it'd be awful to build up a nice base of STRs and then something like that happens and everything is empty.

Michael Baum · Answer

Hey @Alex Silang, personally I don't think that we will see another COVID19 situation in the near future.

One thing, there really wasn't much in the way of mortgage pauses as far as I know.

For example, in Seattle, you as the owner were on the hook. They forced all landlords to not charge tenants at all. Period. This went on for almost 20 months. You simply had to eat the costs.

They made no effort to require tenants to repay anything. This was pretty much all of WA state, but Seattle was the worst.

Here in Olympia one of our city council persons decided to just stop paying her rent. She was doing it in "solidarity" with those that couldn't make their rent. She was working. Making well over 100k a year. Just didn't pay it.

There were hundreds of stories like this across the western WA area.

The moral of this story is to look where you invest and make sure you don't have to deal with crap like this.

Chris Seveney · Answer

Unless you are in a vacation area, I would never buy a STR that does not work as a LTR.

Regarding another pandemic, we have one like every 100 years, so I am playing the odds that we are not going to have another covid lockdown situation anytime soon. Just my 2 cent opinion. I also do not think the people will allow themselves to be locked down again based on the post covid review which this is not political.

Colleen F. · Answer

@Alex Silang   You are at greater risk from the legislature than any pandemic event. I would make sure your rental works as long term. One change I made during the pandemic was all new tenants were month to month and people accepted it. The conversation was pretty simple it is a pandemic and if you stop paying I am going to ask you to move.

Bruce Woodruff · Answer

What @Chris Seveney said. Make sure they work both ways. Also, pick a city/location that  is likely to be desirable anyway. I had 2 STRs during Covid and they were both slammed with people wanting to get out of the big cities with the hordes of people, and away from all the mask regulations, restaurant closures and all that.

John Underwood · Answer

I'm not concerned, but it's always a good idea to have cash reserves.

Our Lake House was perfect as an escape and still have fun stuff to do while staying away from people.

Mike Dymski · Answer

The issue is not the issue.  The biggest thing we have to worry about is government intervention, and the actions of 2020's have been unprecedented.

Sarah Kensinger · Answer

I could not begin to list the amount of people that started building a STR portfolio in 2019 and never went under. Not only that but they have continued to grow, and a few have masterminds or coaching groups they offer to those interested in starting! The trick to real estate is not panicking over the downturns and all the things that life throws at us. It's staying calm and thinking "what can I do in this situation", because there's usually a way out if you're willing to think outside the box. I'm not sure what all these negative posts about STR are about, but if you get in the right room with the right people, it'll change how you think on the current STR real estate environment.

Matthew Paul · Answer

No , not at all concerned .  I am more concerned with inflation , rising property taxes , increases with insurance , and going bald .

Eric Gerakos · Answer

I’m a respiratory therapist. Not concerned at all.

Jon Martin · Answer

What @Michael Baum said. Switching to a LTR would be the last thing I would do if a situation like that were to resurface. I also agree that most people are not going to go along with the charade again. If it is something truly catastrophic, then owning a few extra properties will be lesser on my list of concerns.

From what I recall, most people who asked for mortgage pauses were given them. It's all government money backing the loans anyway.

Anyone concerned about a pandemic sequel?

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