Small Landlords are choosing to sell
Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
The DIY Landlord Book4.7248 Reviews
Small Landlords are choosing to sell
Most Popular Reply
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
- Rental Property Investor · North Palm Beach, FL · Member since 2018 · 2k+ posts · 1k+ votes5y
A perfect example of why you should have ample reserves when investing into real estate.
- 5yBjorn AhlbladPro MemberInvestor · Shelton, WA · Member since 2017 · 6k+ posts · 6k+ votes
@Nathan Gesner If that really is the case how come I can't find anything to buy? What's most likely being sold is properties with non paying tenants! Buyer beware!!
- Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes5y
Originally posted by @Bjorn Ahlblad:
@Nathan Gesner If that really is the case how come I can't find anything to buy? What's most likely being sold is properties with non paying tenants! Buyer beware!!
It's the same in my market. Everything that gets listed is under contract in a week.
The DIY Landlord Book4.7248 Reviews - Rental Property Investor · Red Bank, NJ · Member since 2017 · 1k+ posts · 1k+ votes5y
@Charles Carillo I agree. But as this drags on there is another big component- proper vetting.
Here in NJ I think it will be unlikely to see the eviction moratorium lifted for several more months. Even the most conservative investor could have found themselves in trouble.
As to the inventory- I believe there are a lot of spotters out there for large institutional investors.
- Rental Property Investor · Red Bank, NJ · Member since 2017 · 1k+ posts · 1k+ votes5y
To my point, this quote stuck out
With so many still waiting for relief, however, about a third of landlords said they will be forced to tighten standards when evaluating future rental applications
hmmm. Little too late to realize that.
Some heart breaking stuff in that article, I don't know how a landlord is supposed to sell a property with a tenant who refuses to communicate.
But they are right about one thing- it doesn't bode well for the renter.
- NJ, NJ · Member since 2014 · 63 posts · 88 votes5y
Yep, i gave my tenants cash for keys and my last property just got listed last week. Sunday open house had 17 showings and 6 or 7 more today. Cash offer at asking with no contingencies already received.
So why the hell do we want to be small landlords in NJ anymore? Risk and effort has to be worth the reward. Some people can keep blaming screening but you're just fooling yourself and playing roulette till catastrophy strikes.
- Rental Property Investor · Centreville, VA · Member since 2019 · 1k+ posts · 799 votes5y
“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.
- Rental Property Investor · Los Angeles, CA · Member since 2017 · 2k+ posts · 5k+ votes5y
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.
- 5yMatthew Irish-JonesBusiness MemberReal Estate Agent · Buffalo, NY · Member since 2017 · 2k+ posts · 2k+ votes
@Nathan G. It’s really sad. Being in the PM business we are taking more and more calls from owners asking what we are going to do about non payments.
When I tell them there is nothing we can do besides continue to attempt to get the tenant in board for signing up for assistance or asking them nicely to pay rent, they are in shock.
It’s pretty heart breaking explaining to someone who put their life savings into a rental that their tenants are not paying and there is nothing I can do.
I then try to console them but explaining I am owed over $35,000. What a time to be alive.
Irish Jones Realty4.947 Reviews - Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes5y
This is the unfortunate thing about the intentions of eviction moratoriums and the like:
1. It discourages active efforts by the tenant and landlord to conclude a partial pay/no pay situation. If an eviction moratorium is in place, the redress avenue has been removed which also removes the incentive for the tenant to work with the landlord.
2. It discourages investment into rental property by landlords who are losing money by not collecting rent. Things don't get fixed because there's little financial incentive to make repairs and upgrades.
3. It removes rental stock from the marketplace by encouraging existing landlords to sell, especially in a high real estate market. This not only exaggerates affordable housing scarcity, it increases costs for the remaining renters who are in greater competition for the diminished supply of housing.
4. It increases the costs to the government of providing housing assistance, which now becomes irrelevant unless it offers assistance at the increased market prices.
The bottom line is that unless we are going to abandon any kind of free market and attempt to control housing and prices a la Soviet Russia & the former Eastern bloc, these kinds of efforts are only making things worse for renters.
There's a false dichotomy out there that what's good for tenants is bad for landlords and vice versa. This is a lie. My tenants succeed when I succeed, because my properties are maintained, I don't feel pressure to raise rents, I don't consider selling properties. We are the best rental property company in my small market (yes, that may sound arrogant but it is true and I don't mind saying it). If laws are put into place that diminish the enterprise to the point of break-even or unprofitability, I would sell out and my tenants would either be forced to leave as owners took possession or deal with landlords that are almost guaranteed to be worse than me.
Skyline Properties - Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes5y
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.
The DIY Landlord Book4.7248 Reviews - Investor · Saint Louis, MO · Member since 2016 · 72 posts · 65 votes5y
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.
This is exactly right... It is sad for tenants however as many marginal applicants will be unable to find quality housing in the future.
- Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes5y
Originally 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.
- Rental Property Investor · North Palm Beach, FL · Member since 2018 · 2k+ posts · 1k+ votes5y
Yes, landlords need to start evaluating a potential tenant like they are giving them a mortgage. Years back we would let some tenants rent with less than perfect credit and possibly a brush with the law but today you need to really vet potential tenants. Great credit, great income, clean background etc. Similar to every time the government gets involved, it ends up hurting the regular person since they are now unable to rent if they have any blemishes on their records.
- Rental Property Investor · Syracuse, NY · Member since 2017 · 156 posts · 72 votes5y
@Joe Splitrock - HA! You're exactly right...that IS the way to handle this ridiculous situation! 😆
If you run for office, let me know, I'd love to be your campaign manager! 🤣
- 5yJohn MorganPro MemberRental Property Investor · Grand Prairie, TX · Member since 2018 · 2k+ posts · 2k+ votes
I got screwed with this moratorium on 1 out of 10 of my properties and consider myself lucky. Fortunately, I was eventually able to get them out and it only cost me 24k out of pocket. I have reserves as do most of us. However, some people are having multiple situations like this and don’t have 50-70k plus in savings sitting there for reserves for things like this. I really feel for landlords in this situation.
- 5yJoe S.Pro MemberInvestor · San Antonio · Member since 2020 · 3k+ posts · 3k+ votes
Originally posted by @Charles Carillo:
A perfect example of why you should have ample reserves when investing into real estate.
How can landlords plan for a year plus of Politician backed anti landlords bills? How many houses do you control to make that kind of blanket statement?
- Rental Property Investor · North Palm Beach, FL · Member since 2018 · 2k+ posts · 1k+ votes5y
Originally posted by @Joe S.:
Originally posted by @Charles Carillo:
A perfect example of why you should have ample reserves when investing into real estate.
How can landlords plan for a year plus of Politician backed anti landlords bills? How many houses do you control to make that kind of blanket statement?
Over 300 units. Most lenders require several months of reserves and agency lenders are usually requiring 9-12 months of reserves, so most property owners should have a reserve of some sort from the beginning which is mandated from their lender.
- 5yJoe S.Pro MemberInvestor · San Antonio · Member since 2020 · 3k+ posts · 3k+ votes
Originally posted by @Charles Carillo:
Originally posted by @Joe S.:
Originally posted by @Charles Carillo:
A perfect example of why you should have ample reserves when investing into real estate.
How can landlords plan for a year plus of Politician backed anti landlords bills? How many houses do you control to make that kind of blanket statement?
Over 300 units. Most lenders require several months of reserves and agency lenders are usually requiring 9-12 months of reserves, so most property owners should have a reserve of some sort from the beginning which is mandated from their lender.
Yes sir. :-)
- Real Estate Broker · Huntsville, AL · Member since 2019 · 1k+ posts · 872 votes5y
A lot of off market transactions happening recently in our area. It's the only way to find a good deal. Most sellers are asking way more than what it's worth too.
- Rental Property Investor · Los Angeles, CA · Member since 2017 · 2k+ posts · 5k+ votes5y
Originally posted by @Carl Mathis:
As for Mr. This-is-actually-good, you are either very bad at humor or, incredibly naive, or just a terrible person. I am going to guess its all 3 - a rising tide lifts all boats. Millions drowning is good because it makes my boat more valuable is the perspective of a sociopath. I wish this site had a block feature.
A rising tide lifts all boats is one of the dumbest sayings ever. It's used to signify that everyone is better off. However, every boat (person) is in the same position as before. Inflation removes any benefit.
And yes, millions of units being removed from the market does increase the value of my unit. That's awesome. I'm an investor. People won't be homeless because of this. They will just have to spend more on rent and less on other stuff, or move to a slightly less desirable area.
- 5yDan H.Pro MemberInvestor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
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.
- North Texas · Member since 2019 · 14 posts · 13 votes5y
@JD Martin except the purpose of the moratorium (at least originally) wasn’t to help tenants avoid paying rent, the purpose was to prevent evictions at a time when increased mobility would potentially accelerate COVID’s spread, not to provide blanket tenant relief.
- Rental Property Investor · Phoenix, AZ · Member since 2013 · 919 posts · 911 votes5y
@Dan H., the 'end' will be ALL renters will pay a premium for LL increased costs/risks. Exactly what that looks like, I'm not sure. Why can't LL pass a 'covid inconvenience' fee like they do at diners?
But someone is gonna pay for it & it won't be the LL. It will be the renters/tenants. - Investor · Millburn, NJ · Member since 2018 · 141 posts · 100 votes5y
I wonder in the situation where owners are selling their properties with tenants in place, would they be honest about the tenants not paying rent? If the lease is still in effect, how can the new owner be sure that these are not non-paying tenants? Estoppel really doesn't mean much, correct?
I have seen some LL paying their tenants to move out, and when the next LL call for reference, the existing LLs would give these tenants fabulous review just so they can reclaim their properties. So in a sense, the current LL is screwing the next one.....
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