Exactly, stimulus checks are going towards cell phones, gaming consoles, video games, and flat screen TVs.
Eviction Moratorium Ruled Unconstitutional
- Thread starter IowaHawkeyeFBnBB4Life
- Start date
Exactly, stimulus checks are going towards cell phones, gaming consoles, video games, and flat screen TVs.
Actually, people do, when you have two or three, you should be able to count on having only one vacant for any length of time. This takes away income from an already paid for unit, and the unit that is leveraged at the same time. So yeah, it can **** you.
Genius, your explanation is as ridiculous as you are. Renters know there is a risk of vacancy. However, when a unit is empty and a new renter is found, the landlord can rent the unit and get paid. But when you essentially have a squatter with the government's blessing, there is no chance to get rent money.
Just by the snap of your fingers you ALWAYS get a tenant right away huh? There is never a risk of not having a tenant for a year unless the big bad govt steps in huh? Shoot, I should be buying up a bunch of rentals if it was that easy. No need to worry about swallowing money. Zero risk huh?
Correct me if I"m wrong, but I heard/read somewhere that the moratorium only applies to houses with a Federal mortgage, like VA, FHA etc.
Read my explanation again, I never said tenants were always available. I said if one were to be found you would be screwed because you are stuck with a squatter.
You quite simply are clueless. You calculate risk such as vacancy into what you are doing the same as you calculate the unforseen costs of maintenance or replacement. Roofs wear out.
The government telling your tenants they are not required to pay you? That isn't a thing. If you doubt that simply look at this ruling
There should be aid available, but it‘s a different situation. People need shelter and anyone evicted needs another place to live. Coming out of all this, some businesses may not make it and remote work will remain more popular than pre-COVID because companies have seen they can go remote and still get productivity. This will have impact on commercial real estate and that industry is going to take a big hit.
It’s the same thing. No payment from your property being vacant is the same as no payment from tenants staying there for a period of time.
You have a pretty good idea when a roof is going to wear out when you buy the place. You cannot correctly predict how long or short it’s gonna sit vacant between tenants.
You guys really think it’s ok for a person to buy a rental property when they ar living paycheck to paycheck? That’s what you are seemingly arguing. My point is that you should have enough disposable income to cover the cost of that mortgage before buying. Otherwise, you’re a moron and taking a HUGE risk.
I’m guessing there is a disconnect between what I’m trying to say and what you guys are reading. Probably my fault. My very first point was that you’re an idiot if you buy a rental home or two and don’t have enough disposable income to cover the mortgages for a period of time. You don’t buy when you’re paycheck to paycheck.
No one buys rental homes without vacancy calculated into their model. Banks aren't in the business of lending to rental home owners without due diligence. Some landlords get in over their heads as do some banks. This isn't what happened. It is a forced loss by the government. Their product is being used but they aren't allowed to collect nor are they allowed to sell to someone else willing to pay. That you don't seem to grasp this is a bit strange
There's always a period of time factored into the investment, just as you would forecast expenses of turning the unit. Nobody is saying someone assumed there would be no vacancy. - tenants come and go. What the government is doing is turning an assumed amount of vacancy into an INDEFINITE amount of vacancy.
You aren't an idiot for taking a calculated risk in an effort to build your real estate portfolio, then having your income taken away by the government.
This is true, but I believe some states have enacted their own eviction moratoriums that go above and beyond that.
I have some rental houses none with federal lending. I could of evicted tenants last month for being a month+ behind on rent. That said I didn't take that action because of Covid-19. I am not sure if I will make the same decision if the units get 2+ months behind on rent.
I have some tenants making partial payments, some making none at all. The ones making at least some partial payments will get more leeway than people not paying anything.
I’m totally grasping that. But what is the difference between 6 months of a vacant house and 6 months of no rent from the hiatus? Other than it being used.
Typically a rental house sits empty about 2-3 months depending on needed work upon vacancy. Also my rental properties typically stay rented 3+ years before turn over.
We have gone so far down this rabbit hole that I’m pretty sure my original comment and point is lost. If you buy a rental home or two with close to zero disposable income, you’re an idiot and I don’t feel bad if your wife divorces you for the hardship. If you can’t afford 6-12 months of no income from those properties, that’s a risk that 100% should not be taken.
A bank would not give the person you are describing the money to buy said second or third properties so it is kind of a mute point. That same person would not have the means to purchase a rental property without bank financing.
How long could you go without receiving rent before you’d have to sell? When you first started deciding if it was going to work, what was the maximum amount of time you figured you could go without rent?
Agree. I either posted that earlier or had been thinking it but people kept defending the notion that it wouldn’t be dumb to do it if a bank allowed.
Not a fair comparison. When I started houses usually cost around 10-15k each.
I always factor in a certain amount of vacancy in all places I evaluate. We also built in a lot of sweat equity into every property we purchased. Sweat Equity is doing work yourself without hiring outside professionals, thus saving lots of money on renovations.
So if we purchased a home at 10k put in 5k on materials it would likely be worth 20k after renovations. This would give us 5k extra equity that we would then use to purchase another home without putting any money down. We did this over and over till we had over a dozen homes.
This is not my primary business anymore, but it is what we did to start off over 25 years ago.
Awesome. I’m hoping to get into a couple rentals in about 5 years. We completely renovated the house we are in now and have enough equity in the five years we’ve been here to buy a rental outright. But we decided to add an attached garage first.
When we were searching for a home in our small town, we came across a few that were pretty dang cheap but needed work. That’s my specialty. The problem is that there is stiff competition for those homes here.
This trade has increased in popularity a lot over the last decade. But there are still good deals to be found out there. One of our partners took the classes to become a realtor which gives us access to the listings as soon as they are posted, and saves us on commissions when purchasing property. Plus we can setup our own showings pretty much any time we want. It is not difficult to pass the Real Estate Exam.
You got burnt being dumb with rentals too huh? Seems to be the only reason people are taking it so personal on here.
Oh no. But you’re way off in your analysis.
I won’t explain because it wouldn’t do any good.
The only analyzing I’ve done is to say don’t buy rental properties if you can’t afford a hiatus from making money on them. That’s literally all I’ve said. Seems like common sense to me.
The hiatus for some is going on a year.
The article says Sept? I stand by my comments that if you can’t go an extended amount of time with no rent, then you took too big of a risk and reap what you sow.
Some states did moratoriums last March. The CDC extended it nationwide in September. Also, would you be cool with not collecting rent for a year?
Then they wouldn't be cheap relative to value.
I think you are misunderstanding the business model of rental homes. In all seriousness if you want to truly get into the business you should probably step back and understand more on what people are saying in this thread. .
I’m sure he’ll reply that his “strong portfolio” could weather this storm.
I wouldn’t put myself into the situation that I couldn’t afford it. Which is my point.
Except, I know what those houses brought for rent once bought and upgraded. They made a killing. I know the market here. No one has said anything I don’t understand or ultimately agree with. Pure obviously going to understand the risk and calculate what is going to make you money or put you on the street. To me, not receiving a rent check for a year isn’t going to put me out when I pull the trigger.
Most people didn’t put themselves in a situation to go a year without any money coming in. Hence why see so many businesses shutting down. This lack of income isn’t just rental businesses.
There are indeed many layers to struggling financially. Which is why you should Ben damn sure you can pay all mortgages with no income from those properties for quite a while. Again, I’m talking the guy who has rental home or two. I could get involved with renting now, but I’ve got goals I need to hit before I’m comfortable not putting my family at financial risk.
Again, not exclusive to rentals. No business could survive with no income for a year.
Let me ask you this, if your clients stopped paying you for a year, what would you do. Not talking rentals. Just your day job.
