Rental Property Investor · Pittsburgh, PA · Member since 2018 · 17 posts · 5 votes
With the new extension to the eviction moratorium my wife is having a hard time getting on board with buying rental properties. I have spent the past 2-3 years reading a learning about investing in real estate and I finally got my wife on board (for the most part) but now she is questioning if we should buy now with the moratorium extension.
What can I tell her to help ease her mind? I know it’s a risk to take but damn I think the reward can far out way the risk if you do it right.
How common is it out there to have tenants take advantage of the moratorium?
Is there any assistance for landlords dealing with it?
Rich Dad Poor Dad is definitely a good place to start for the mindset side of things. I can understand her hesitations now that life is pretty good. Remind her that the biggest thing that keeps people from having a great life is having a good life.
Another thing that may help quell her fears would be having large cash reserves. If you can say even if the tenants don’t pay and we lose our jobs, we still have x months/years in savings to cover our living expenses and mortgage on the other property, this usually puts things into perspective. Because if everything goes wrong and you still have months of runway before disaster, the downside looks much more manageable and becomes a tangible measuring stick.
If she's worried, wait a few months and hope the government comes to their senses. During normal times, winter is a good time to buy and aim for a spring closing as it will be easier to get tenants.
Real Estate Agent · Sandwich, MA · Member since 2014 · 974 posts · 636 votes
5y
@David Hollenberger
It sounds like she has reservations about investing in general and the eviction moratorium is just a recent thing she can point to as a reason not to invest. What is it she’s really worried about that has taken so much convincing on your part?
Rental Property Investor · Pittsburgh, PA · Member since 2018 · 17 posts · 5 votes
5y
@Mason Hickman
I think she’s hesitant because she grew up not having much and now that we have a family and are living a good life and having success at it she is afraid to lose it by a deal going bad. She’s afraid we will buy a place and rent it out and the tenant will not pay because of the covid crap. It’s a work in progress with getting her on board but she is reading rich dad poor dad now and I think the mind set is starting to click for her.
Rich Dad Poor Dad is definitely a good place to start for the mindset side of things. I can understand her hesitations now that life is pretty good. Remind her that the biggest thing that keeps people from having a great life is having a good life.
Another thing that may help quell her fears would be having large cash reserves. If you can say even if the tenants don’t pay and we lose our jobs, we still have x months/years in savings to cover our living expenses and mortgage on the other property, this usually puts things into perspective. Because if everything goes wrong and you still have months of runway before disaster, the downside looks much more manageable and becomes a tangible measuring stick.
Real Estate Agent · Atlanta, GA · Member since 2020 · 1k+ posts · 1k+ votes
5y
@David Hollenberger I would take all the eviction moratorium chaos with a grain of salt. Majority of landlords I have spoke with informed me that their tenants have continued to pay on time. If you do decide to take action, I highly encourage that you invest in a landlord friendly state. For instance, New York has already passed a law in which you cannot discriminate an applicant based on previous evictions. I must say, it is frustrating that the moratorium continues to be extended. At the end of day, I think you're spot on, the rewards certainly outweigh the risks if done correctly.
With the new extension to the eviction moratorium my wife is having a hard time getting on board with buying rental properties. I have spent the past 2-3 years reading a learning about investing in real estate and I finally got my wife on board (for the most part) but now she is questioning if we should buy now with the moratorium extension.
What can I tell her to help ease her mind? I know it’s a risk to take but damn I think the reward can far out way the risk if you do it right.
How common is it out there to have tenants take advantage of the moratorium?
Is there any assistance for landlords dealing with it?
Hi David, first, congrats on all you've done at this point.. Having read all of the responses, the people here are giving you great advice. To me, it would seem your wife has just used EM as the latest "excuse" to not move forward so there really is an overall general hesitancy that you/she needs to get past.
If it's any consolation, my wife also was hesitant for much the same reasons you provided. This was 10+ years ago when we were just starting our RE venture. Now, she's the biggest cheerleader! And, we've been able to retire based on the RE ventures. But, like someone else suggested, we had significant cash reserves which helped quell her fears as she saw we could "ride the storm out" if necessary. Thankfully, the storm never materialized and we used those reserves to double/triple down once she saw how well the rentals were working out.
I would also say make sure the first one or two are either Class A or B which will attract tenants that most likely will be "aspirational" (want to get to point they can buy their own house so they will go above and beyond to make sure you get paid). Once you do your first one or two successfully, your wife will most likely be pushing you to do more and the roles might become reversed :)
Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
5y
@David Hollenberger What if your first investment goes totally wrong - what does that do to your financial situation? Do you have reserves to weather it?
It can take a long time to start working with an agent, find your first property, purchase and close, get it ready to rent, have prospective tenants apply, etc. If "buying now" means "starting the process," you are 60, 90 or more days out from actually having tenants.