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
- Member since 2021 · 6 posts · 2 votes5y
@Joe Splitrock
EXACTLY, so glad you get it. can you explain that to Utopian @Eric Weldon-Schilling
- 5yJoe SeegersPro MemberInvestor · Appleton, WI · Member since 2011 · 29 posts · 29 votes
i thought of selling ,when this whole thing started.but now ,i think different,this covid made me a better landlord in the long run.i mean in profit,not in the way i took care of properties.before i did stuff without thinking of the cost.just spend it.now i really treat this as a business ,not a side hustle,now really checking out incoming tenants,more involved in landlord meetings and other stuff.in the long run will create more money .i was one of those softy landlords that would try to help out a trouble tenant, and then get bit in the ***.now if you do not meet qualifcations,that apt will sit empty and collect dust.so i took a hit money in the pocket like a lot of other landlords,but i see a brighter future,because alot of landlords will sell,and supply will become in short supply,creating rent increases which will let make make up my losses.and in the long way the tenant who cheated the system will be homeless.and the government ask us landlords for help, i way say call the cdc.
- Investor · Singapore · Member since 2013 · 1k+ posts · 3k+ votes5y
Originally posted by @JD Martin:
Originally posted by @Account Closed:
Isn't it ironic that all your proposed alternatives (and they are not bad ones) also depend on the government? Which you say shouldn't intervene in the first place or else we are suddenly all communists? The economy and society have never been a "free" market. Everyone wants the government to intervene in their favor but not charge them anything. There was a story of a guy on welfare who suddenly got a million dollar windfall and immediately starts whining about how California is taxing him to death! I hear much of this landlord whining in the same vein. We are happy to take low interest Fannie Mae loans (all government backed), deduct depreciation which is not even a real cost on an appreciating asset, do tax free 1031 exchanges etc etc but think we should have a free market.
And full disclosure, I have non paying tenant also so I am personally affected by these laws as well. But I just think you have to see the whole picture in balance. I have made orders of magnitude more money due to government polices towards housing than I have lost due to some misguided things like this blanket eviction moratorium.
I never said any such thing; hell, I worked in local government most of my life. I don't disagree with you that there is certainly a hypocrisy in looking for government support on one hand and eschewing it in the other. That doesn't mean that government can't screw it up - it does, and often, and often because of blanket, low-thought policies. Unless you have complete control of the economy like a Soviet-type system (and this isn't really true either, since a black market will always crop up in such situations), any lever you push with the force of government is going to cause a reaction. That reaction can be "good" or "bad" in the broad sense of the word but it's going to happen. The bigger the government handle on the lever, the greater the reaction is going to be.
So I'm not saying at all that the government shouldn't have become involved. It should have been more thoughtful, targeted, and strategized. If the goal was to keep people from being evicted for non-payment, then funds should have been made available specifically and strictly for that purpose. It shows a lack of understanding of basic human nature to think you can just send checks to people out of thin air and that many of those people will use the money responsibly (if you define responsibly as catching up on your obligations and using the funds for necessities). We need to get real here; a lot of people - not everyone - are renters because they do a poor job of handling their finances. They cannot move from renting>owning because they are unable to accumulate any kind of funds and wherewithal to follow the steps required to become a homeowner. To then expect that you can hand people in that situation money without any strings and that it will be used as it should - pay the rent, pay for food, pay the water bill - is laughable. There's a reason that Section 8 pays landlords directly; how much of that money would actually make it to the landlord if they just handed the tenant a fat check every month? Same thing with food stamp cards and a host of other benefits.
We already have the infrastructure in place to have been able to handle direct-to-landlord payments (Section 8). It would have been relatively simple to take 100 or 200 or 500 billion of that money, send it to HUD and allow tenants/landlords to certify loss of income and pay the tenants that way until the pandemic was over.
With this I fully agree. There were a lot better ways to get the same result.
- 5yKwadwo AsarePro MemberRental Property Investor · Sacramento, CA · Member since 2019 · 8 posts · 10 votes
@Charles Carillo I have to respectfully push back against your statement a little. I understand what you’re trying to say. Yes, in a normal world just having ample reserves would be enough.
However, we talking about a global pandemic. Because of this pandemic our politicians have changed the rules of the game. No evictions, no late fee, and no eta on how long this will go on for.
So for some landlords overcoming this situation will require more then just ample reserves. It’s going to require a high level of business savvy and access to capital.
- Handyman · Pittsburgh, PA · Member since 2018 · 5k+ posts · 13k+ votes5y
Originally posted by @Mike A.:
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.
Uh-huh. You know how you can use lemon juice as invisible ink? Well, if you rub lemon juice all over your face, did you know that cameras can't see you?
“I Wore the Juice”- The Dunning-Kruger Effect - Port Chester, NY · Member since 2016 · 210 posts · 157 votes5y
Originally posted by @Jim K.:
Originally posted by @Mike A.:
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.
Uh-huh. You know how you can use lemon juice as invisible ink? Well, if you rub lemon juice all over your face, did you know that cameras can't see you?
“I Wore the Juice”- The Dunning-Kruger EffectNot sure what you mean, but to each their own.
- Rental Property Investor · Red Bank, NJ · Member since 2017 · 1k+ posts · 1k+ votes5y
@Joe Seegers Exactly Brother!
- Rental Property Investor · North Palm Beach, FL · Member since 2018 · 2k+ posts · 1k+ votes5y
Originally posted by @Kwadwo Asare:
@Charles Carillo I have to respectfully push back against your statement a little. I understand what you’re trying to say. Yes, in a normal world just having ample reserves would be enough.
However, we talking about a global pandemic. Because of this pandemic our politicians have changed the rules of the game. No evictions, no late fee, and no eta on how long this will go on for.
So for some landlords overcoming this situation will require more then just ample reserves. It’s going to require a high level of business savvy and access to capital.
Yes, I understand all of this but this is why seasoned investors always stress reserves and investors with non-paying tenants should always be consulting their attorney. The rules did change but what are we going to do about it? Evictions are happening right now; even in states with statewide and nationwide moratoriums. If you have a nonpaying tenant how are you going to handle it? Find an attorney that has successfully evicted tenants in 2021, pay them to leave etc. Being savvy means thinking outside the box.
- Real Estate Agent · San DIego · Member since 2019 · 177 posts · 185 votes5y
Reserves are imperative to get property owners over bumps in the road, I don't think the intended meaning is to float nonpaying tenants for months or a year due to huge drops in income. I'd rather keep the income and outgo in balance. But in this instance, what are reserves, exactly? In my book, it's a way to say that you're using your savings to cover a loss of income/expected revenue/unexpected expenses. I don't think most people expected "reserves" to change their entire business income structure for long periods of time. The pandemic has caused (some landlords) catastrophic loss of income on a scope more similar to things we'd get insurance for. I have reserves, and I'm prepared to use them when necessary, but I'd far rather have no loss of income and call those reserves my money.
- 5yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @JJ P.:
Reserves are imperative to get property owners over bumps in the road, I don't think the intended meaning is to float nonpaying tenants for months or a year due to huge drops in income. I'd rather keep the income and outgo in balance. But in this instance, what are reserves, exactly? In my book, it's a way to say that you're using your savings to cover a loss of income/expected revenue/unexpected expenses. I don't think most people expected "reserves" to change their entire business income structure for long periods of time. The pandemic has caused (some landlords) catastrophic loss of income on a scope more similar to things we'd get insurance for. I have reserves, and I'm prepared to use them when necessary, but I'd far rather have no loss of income and call those reserves my money.
there is rental guarantee insurance not sure how easy it is to collect on those policies and i could see any insurer that would be liable to insure rental loss's in this pandemic could be Banko pretty quick
- 5yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @JJ P.:
Reserves are imperative to get property owners over bumps in the road, I don't think the intended meaning is to float nonpaying tenants for months or a year due to huge drops in income. I'd rather keep the income and outgo in balance. But in this instance, what are reserves, exactly? In my book, it's a way to say that you're using your savings to cover a loss of income/expected revenue/unexpected expenses. I don't think most people expected "reserves" to change their entire business income structure for long periods of time. The pandemic has caused (some landlords) catastrophic loss of income on a scope more similar to things we'd get insurance for. I have reserves, and I'm prepared to use them when necessary, but I'd far rather have no loss of income and call those reserves my money.
Or if you blow through all the reserves during this event.. how are you going to build them back up will take years and you would be in a pretty precarious financial spot if you then have Zero reserves after exhausting your current reserves.
- Investor · Grangeville, ID · Member since 2017 · 85 posts · 34 votes5y
@Nathan G.
I like your affidavit idea, unfortunately today a lot of politicians aren’t interested in doing whats right, they are more interested in lining their pockets and getting re-elected. For them it’s all about more bureaucracy as that keeps them employed!
- Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes5y
Originally posted by @Jay Hinrichs:
Gypsy Jokers used to "vacation" every summer east of my home on Highway 22. Our property was right on the highway, so we'd pull out lawn chairs and watch hundreds and hundreds of bikes drive past our property. Good times!
The DIY Landlord Book4.7248 Reviews - Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes5y
Originally posted by @Jay Hinrichs:
Originally posted by @JJ P.:
Reserves are imperative to get property owners over bumps in the road, I don't think the intended meaning is to float nonpaying tenants for months or a year due to huge drops in income. I'd rather keep the income and outgo in balance. But in this instance, what are reserves, exactly? In my book, it's a way to say that you're using your savings to cover a loss of income/expected revenue/unexpected expenses. I don't think most people expected "reserves" to change their entire business income structure for long periods of time. The pandemic has caused (some landlords) catastrophic loss of income on a scope more similar to things we'd get insurance for. I have reserves, and I'm prepared to use them when necessary, but I'd far rather have no loss of income and call those reserves my money.
there is rental guarantee insurance not sure how easy it is to collect on those policies and i could see any insurer that would be liable to insure rental loss's in this pandemic could be Banko pretty quick
I asked my agent about this early on (though I wasn't expecting any real effect on me, but I like to be forewarned) because I have loss of rent coverage. They looked into it and then showed me the clauses that would pretty much make it a force majeure event and deny the coverage, as no one could be expected to insure against a pandemic. I figured that was the answer - and I don't disagree with it - I just wanted to hear it from the horse's mouth, so to speak...
Skyline Properties - Member since 2020 · 13 posts · 8 votes5y
@Nathan G. I hope so, because I’m looking to purchase.
- Rental Property Investor · Lexington, KY · Member since 2021 · 7 posts · 3 votes5y
@Nathan G. I was closing today. The moratorium will end soon enough. I do feel bad for those who didn’t have enough cash reserve to make it work.
- Involved In Real Estate · Katy, TX · Member since 2009 · 35 posts · 24 votes5y
@Matthew Irish-Jones is it safe to assume that your PM fees are also not being paid? So you are forgoing your normal income because of the moratorium.
- Rental Property Investor · Phoenix, AZ · Member since 2013 · 919 posts · 911 votes5y
@Carl Mathis, in some instances it already has turned ugly. Have a look at the link below where the deadbeat tenants were kidnapped by their landlord & dumped into a cemetery in the freezing cold.
Deadbeat tenants are part of the risk when you get into this business. EVERYONE understands that part. But, prior to Covid, we had a process that dealt with these issues. Now the LL is responsible for housing ppl for FREE & still do maintenance AND pay property taxes. With ZERO help from the govt.
The govt can bail out fortune 500 companies, Wall Street, other countries, but NOT 'we the ppl'. Extremely sad.
AND it WILL get uglier. I'm already seeing it. Look at the requirements some new rentals have had. I have seen requirements such as a 680+ credit score, 3x rent = income AND DTI requirements. And this is on top of inflated rents! No LL is going to take a risk on anybody 'sketchy'. If you get evicted, your next stop is the 'barrio' or the street.
Not sure the govt's intent. It looks like they want to own it ALL & more!
There is no way a LL in NY or IL could have enough $$$ reserves when a vast majority of their tenants refuse to pay rent for over a YEAR.
Join the conversationCreate a free account to reply, vote on answers and follow this thread.