Can you make money being a landlord these days?
So Hill had taught himself the rules, researching on the internet about tenant rights, rent strikes in New York and the eviction moratorium. He read that almost 1 million other renters in New York state were behind on payments and that 80% of those renters had also reported having lost income during the pandemic. Hill watched online as Cuomo said: “The number one issue that people talk to me about probably is rent and fear about being able to pay their rent. And this just takes that issue off the table.” He listened during the presidential campaign as Joe Biden said: “There should be rent forgiveness … Not paid later — forgiveness.”
And so when Hill finally received some small unemployment payments and a four-figure stimulus check from the government, he used the money to fix the engine in his broken-down minivan, buy a little extra food, purchase some basic furniture, pay down his credit card, and surprise his daughter with a decent laptop for her virtual classes, because why would he spend what little money he had on rent that he didn’t actually have to pay?
Comments
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I would feel too vulnerable as a landlord
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In red states where rules are enforced and insane laws are not being enacted, like "Just Cause termination" and rent control, yes, you can make money.
Most landlords in Seattle-area are making money because of the equity they have in their property when they go to sell thanks to market appreciation. The only people making any half-ass money on the monthly rent are those who bought 10 years ago, those who own the property outright, and those who are generational in the business and inherited property. -
This article sums up how difficult the landlord hustle has become. I have been renting out residential real estate in Seattle for more than 20 years.
It is easy to look back and see that it has been a solid investment strategy, but what is more difficult to figure out is where do you go from here? This last year has been bumpy for sure. I managed to sidestep one bum at the beginning of the plandemic to get him out of his lease early in May of last year voluntarily before he was far enough behind to eclipse his last month and security deposit. I replaced him with group that have been great so far and also managed to raise the rent a little. So all good on that front. That is what I would call some standard level landlord bullshit.
I think one reason why people say that they would never want to be a landlord is that they look at it the wrong way. It isn't like buying berkshire hathaway and sitting back and watching it grow. You need to think of it as a side job. Like any job it requires work.
Speaking of which:
The backstory:
The place that is giving me trouble today had been a great investment. I bough in 2013 for $675,000. This was listed and on the open market for probably 60 days or so. I am in the money changing business and the house appealed to me at the time because as a SFR I could get a 30 year fixed right up to what was at the time the FNMA max of $506,000. I negotiated for the seller to pay all my closing costs and hooked up the loan at 3.625% which at the time seemed like as low as it would ever go. My plan was simple rent that baby out until I pay it off and the husky from Huston is right about inflation so that I can quit my job at Money Tree and live off the rent.
Present day problems:
I think you can guess where I am going with this. Tenants started dragging ass on rent about 5 months ago and it has been a pretty quick downhill slide from there. A developer is willing to cash me out 12 months from now for good money but the contract gives him a 30 day feasibility before he has any skin in the game. The tenants have agreed that they will move out and I told them I would forgive the rent owed if the house is not trashed. The term comes up June 1 so stay tuned for more updates. -
@Number1AtNumber2 was the income of the tenants significantly affected by Covid, or did they just start dragging ass because government edicts allowed them to do so?Number1AtNumber2 said:This article sums up how difficult the landlord hustle has become. I have been renting out residential real estate in Seattle for more than 20 years.
It is easy to look back and see that it has been a solid investment strategy, but what is more difficult to figure out is where do you go from here? This last year has been bumpy for sure. I managed to sidestep one bum at the beginning of the plandemic to get him out of his lease early in May of last year voluntarily before he was far enough behind to eclipse his last month and security deposit. I replaced him with group that have been great so far and also managed to raise the rent a little. So all good on that front. That is what I would call some standard level landlord bullshit.
I think one reason why people say that they would never want to be a landlord is that they look at it the wrong way. It isn't like buying berkshire hathaway and sitting back and watching it grow. You need to think of it as a side job. Like any job it requires work.
Speaking of which:
The backstory:
The place that is giving me trouble today had been a great investment. I bough in 2013 for $675,000. This was listed and on the open market for probably 60 days or so. I am in the money changing business and the house appealed to me at the time because as a SFR I could get a 30 year fixed right up to what was at the time the FNMA max of $506,000. I negotiated for the seller to pay all my closing costs and hooked up the loan at 3.625% which at the time seemed like as low as it would ever go. My plan was simple rent that baby out until I pay it off and the husky from Huston is right about inflation so that I can quit my job at Money Tree and live off the rent.
Present day problems:
I think you can guess where I am going with this. Tenants started dragging ass on rent about 5 months ago and it has been a pretty quick downhill slide from there. A developer is willing to cash me out 12 months from now for good money but the contract gives him a 30 day feasibility before he has any skin in the game. The tenants have agreed that they will move out and I told them I would forgive the rent owed if the house is not trashed. The term comes up June 1 so stay tuned for more updates.
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Yes you can, buy it only takes one bad tenant to take it all away. Commercial real estate is much more expensive, but you aren’t grabbed by the balls with regulations like in residential real estate.
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They all say it is because of covid... but you know those fuckers got unemployment and Biden bucks just like everyone else. The first guy was a tenant for almost 5 years and was probably late on rent 30% of the time. It was minimum $100 extra for his late fee but it would still bug me. It only took him about a week into covid to tell me he didn't have rent which first off: if your rent is $4800 how do you have zero of that in the first week of the month? Second off, who thinks it is a sound strategy to pay that much for rent for 5 years in a row?
The people who are late now gave me all kinds of BS about it being COVID related and that they aren't getting unemployment but I believe they are just taking advantage of the situation. I mean, like the quote in the story says: "Why pay rent you don't have to pay." well shit, I dunno maybe because you agreed to pay the rent when you signed your lease? -
The best rental investment strategy is to own self-storage or mobile home parks.greenblood said:Yes you can, buy it only takes one bad tenant to take it all away. Commercial real estate is much more expensive, but you aren’t grabbed by the balls with regulations like in residential real estate.
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greenblood - This would have to go on for years for the one bad group to take all my chips off the table.
and bleached anus is right about people making money that bought a long time ago on equity appreciation but mobile home parks and self storage seem like you are setting yourself up to be dealing with the same poor smucks like the guy in the article. -
No property tax vacations I assume
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BleachedAnusDawg said:
The best rental investment strategy is to own self-storage or mobile home parks.greenblood said:Yes you can, buy it only takes one bad tenant to take it all away. Commercial real estate is much more expensive, but you aren’t grabbed by the balls with regulations like in residential real estate.
This guy owned a large portion of downtown Seattle and didn't even need buildings. We worked with the kids and grandkids when they started changing parking lots into commercial real estate residence and office
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You are correct Race I still pay the property tax while comrade Sawant talks about housing as a basic human right. Like they talked about in the article that a property tax protest withholding would help the local officials figure out to knock it off with the moratoriums. Personally I think: yea right. The federal government is backfilling these decisions for now.
also most people have a mortgage and pay taxes through that. -
Funny, I know the kids in that family fairly well. They made a mint off of slabs of concrete.RaceBannon said:BleachedAnusDawg said:
The best rental investment strategy is to own self-storage or mobile home parks.greenblood said:Yes you can, buy it only takes one bad tenant to take it all away. Commercial real estate is much more expensive, but you aren’t grabbed by the balls with regulations like in residential real estate.
This guy owned a large portion of downtown Seattle and didn't even need buildings. We worked with the kids and grandkids when they started changing parking lots into commercial real estate residence and office -
I've come across the parents in my RE career. Suffice to say, they aren't hurting.BleachedAnusDawg said:
Funny, I know the kids in that family fairly well. They made a mint off of slabs of concrete.RaceBannon said:BleachedAnusDawg said:
The best rental investment strategy is to own self-storage or mobile home parks.greenblood said:Yes you can, buy it only takes one bad tenant to take it all away. Commercial real estate is much more expensive, but you aren’t grabbed by the balls with regulations like in residential real estate.
This guy owned a large portion of downtown Seattle and didn't even need buildings. We worked with the kids and grandkids when they started changing parking lots into commercial real estate residence and office
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Herb Mead had some interesting stories in regards to his business dealings with Joe Diamond.RaceBannon said:BleachedAnusDawg said:
The best rental investment strategy is to own self-storage or mobile home parks.greenblood said:Yes you can, buy it only takes one bad tenant to take it all away. Commercial real estate is much more expensive, but you aren’t grabbed by the balls with regulations like in residential real estate.
This guy owned a large portion of downtown Seattle and didn't even need buildings. We worked with the kids and grandkids when they started changing parking lots into commercial real estate residence and office -
Not paying rent when you have the funds to do so is theft and it's immoral as I once opined to @RaceBannon . I mean what's the fucking point of giving folks the generous UI checks only to have them not pay rent. I guess Big Tobacco and Big Booze are happy to take the money, but the landlord class if getting it up the ass.Number1AtNumber2 said:They all say it is because of covid... but you know those fuckers got unemployment and Biden bucks just like everyone else. The first guy was a tenant for almost 5 years and was probably late on rent 30% of the time. It was minimum $100 extra for his late fee but it would still bug me. It only took him about a week into covid to tell me he didn't have rent which first off: if your rent is $4800 how do you have zero of that in the first week of the month? Second off, who thinks it is a sound strategy to pay that much for rent for 5 years in a row?
The people who are late now gave me all kinds of BS about it being COVID related and that they aren't getting unemployment but I believe they are just taking advantage of the situation. I mean, like the quote in the story says: "Why pay rent you don't have to pay." well shit, I dunno maybe because you agreed to pay the rent when you signed your lease?
We? need to bring back debtor's prisons for the extra special deadbeats. Could help solve the homelessness crisis too. -
The thing that is really bullshit about the eviction moratorium is that nobody is getting rich evicting people. I never want to participate in an eviction... but I want to be able to threaten eviction if people stop being reasonable. Every landlord I have talked to says the same thing.
If the unemployment was flowing (and I am not talking about all the money siphoned off to Nigeria) and the extra $600 and all those stimulating checks than why do you need to halt evictions? -
When I was at the abyss I tried the novel approach of being honest with our landlord and we worked it out where for a few months I paid it in two or three installments and when were back I paid all the late fees
They really don't want to evict you. Just be a man about it -
Novel concept, right?RaceBannon said:When I was at the abyss I tried the novel approach of being honest with our landlord and we worked it out where for a few months I paid it in two or three installments and when were back I paid all the late fees
They really don't want to evict you. Just be a man about it -
The moratorium creates all sorts of bad incentives for renters to be unreasonable.Number1AtNumber2 said:The thing that is really bullshit about the eviction moratorium is that nobody is getting rich evicting people. I never want to participate in an eviction... but I want to be able to threaten eviction if people stop being reasonable. Every landlord I have talked to says the same thing.
If the unemployment was flowing (and I am not talking about all the money siphoned off to Nigeria) and the extra $600 and all those stimulating checks than why do you need to halt evictions?
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I’m no behavioral economist, but this right here is the heart of the problem. I can certainly understand people using the stimulus/unemployment money on food, fixing up an old car, and even a laptop for a kid’s online classes (assuming they’re K-12 and had no other access to education)...but furniture and repayment on credit card debt should’ve come after rent.Number1AtNumber2 said:https://www.seattletimes.com/business/a-landlord-a-tenant-and-the-battle-for-1042-cutler-st-in-upstate-new-york/
And so when Hill finally received some small unemployment payments and a four-figure stimulus check from the government, he used the money to fix the engine in his broken-down minivan, buy a little extra food, purchase some basic furniture, pay down his credit card, and surprise his daughter with a decent laptop for her virtual classes, because why would he spend what little money he had on rent that he didn’t actually have to pay?
As the man said, there’s no incentive to pay rent. Credit cards, while they have offered deferred payments, temporary lower interest rates, etc., can still have people sent to collections and have their credit score impacted (which could hurt your chances with renting again), right?
I don’t know what the answer to all of this is, but it seems like non-housing debt repayment is, like Cal, ranked too high. -
We've had some sketchy renters over the years in Seattle, but over all it has been good. Since getting out (covered in other threads), moving, and getting back in, it has been very good. Right now, after mortgages, we clear about $2500 a month, which goes back into mortgages. When we retire (5-6 years, praying doog GIF), we will be free and clear mortgage-wise, upping the take to about 5k per month, for 2 rentals at current rates. The key, which we found by accident, is we only rent to military / professional people, who will pay rent on time, and not tear the shit out of everything. We couldn't do that in Seattle. We are currently shopping for a couple more...
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Fishpo You and I sound like we were running similar angles on a few things. I have also rolled all profits back into the rentals. First to fix and next to pay down debt. I pulled myself out of Seattle to live in Kitsap about two and a half years ago. I think I remember you saying you were on this side of the water. As long as you aren't fish police we are cool.
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And Out the door I went?RaceBannon said:When I was at the abyss I tried the novel approach of being honest with our landlord and we worked it out where for a few months I paid it in two or three installments and when were back I paid all the late fees
They really don't want to evict you. Just be a man about it -
Self storage seems pretty straight forward and while you’re dealing with shit bags like the guy in the article, there isn’t an eviction moratorium for storage units, rent is fairly low so you’re not dying over even a couple deadbeats, and when they finally lose the unit, auction the shit off to the freaks you see on those auction reality shows.Number1AtNumber2 said:greenblood - This would have to go on for years for the one bad group to take all my chips off the table.
and bleached anus is right about people making money that bought a long time ago on equity appreciation but mobile home parks and self storage seem like you are setting yourself up to be dealing with the same poor smucks like the guy in the article. -
Self-storage you can boot people easy. The thing about mobile home parks and self storage is that you have very limited maintenance expenses, almost no worry about wear and tear and damages - most parks you are just renting the dirt.CFetters_Nacho_Lover said:
Self storage seems pretty straight forward and while you’re dealing with shit bags like the guy in the article, there isn’t an eviction moratorium for storage units, rent is fairly low so you’re not dying over even a couple deadbeats, and when they finally lose the unit, auction the shit off to the freaks you see on those auction reality shows.Number1AtNumber2 said:greenblood - This would have to go on for years for the one bad group to take all my chips off the table.
and bleached anus is right about people making money that bought a long time ago on equity appreciation but mobile home parks and self storage seem like you are setting yourself up to be dealing with the same poor smucks like the guy in the article. -
I like these ideas. I got a good look into a guys finances that did very well with self storage so you make a good point about there being money there. And that is a good point about eviction for non payment.
Rural self storage could also be a play that is similar to Diamonds move with the parking lots. If you put them in small towns that end up blowing up you can make money on the land being worth more. -
Did you listen to the BP episode with the guy whose been killing it with self storage?BleachedAnusDawg said:
Self-storage you can boot people easy. The thing about mobile home parks and self storage is that you have very limited maintenance expenses, almost no worry about wear and tear and damages - most parks you are just renting the dirt.CFetters_Nacho_Lover said:
Self storage seems pretty straight forward and while you’re dealing with shit bags like the guy in the article, there isn’t an eviction moratorium for storage units, rent is fairly low so you’re not dying over even a couple deadbeats, and when they finally lose the unit, auction the shit off to the freaks you see on those auction reality shows.Number1AtNumber2 said:greenblood - This would have to go on for years for the one bad group to take all my chips off the table.
and bleached anus is right about people making money that bought a long time ago on equity appreciation but mobile home parks and self storage seem like you are setting yourself up to be dealing with the same poor smucks like the guy in the article.
That made me very curious about that kind of property. -
No, haven't heard that, but I know several landlords who are selling their properties in King County and shifting their business model to self-storage.CFetters_Nacho_Lover said:
Did you listen to the BP episode with the guy whose been killing it with self storage?BleachedAnusDawg said:
Self-storage you can boot people easy. The thing about mobile home parks and self storage is that you have very limited maintenance expenses, almost no worry about wear and tear and damages - most parks you are just renting the dirt.CFetters_Nacho_Lover said:
Self storage seems pretty straight forward and while you’re dealing with shit bags like the guy in the article, there isn’t an eviction moratorium for storage units, rent is fairly low so you’re not dying over even a couple deadbeats, and when they finally lose the unit, auction the shit off to the freaks you see on those auction reality shows.Number1AtNumber2 said:greenblood - This would have to go on for years for the one bad group to take all my chips off the table.
and bleached anus is right about people making money that bought a long time ago on equity appreciation but mobile home parks and self storage seem like you are setting yourself up to be dealing with the same poor smucks like the guy in the article.
That made me very curious about that kind of property. -
If you’re thinking self storage, it’s a good pod to listen to. The guy said something like 80% of all multi family buildings are owned by major corporations but 80% of self storage are still mom & pops type businesses.BleachedAnusDawg said:
No, haven't heard that, but I know several landlords who are selling their properties in King County and shifting their business model to self-storage.CFetters_Nacho_Lover said:
Did you listen to the BP episode with the guy whose been killing it with self storage?BleachedAnusDawg said:
Self-storage you can boot people easy. The thing about mobile home parks and self storage is that you have very limited maintenance expenses, almost no worry about wear and tear and damages - most parks you are just renting the dirt.CFetters_Nacho_Lover said:
Self storage seems pretty straight forward and while you’re dealing with shit bags like the guy in the article, there isn’t an eviction moratorium for storage units, rent is fairly low so you’re not dying over even a couple deadbeats, and when they finally lose the unit, auction the shit off to the freaks you see on those auction reality shows.Number1AtNumber2 said:greenblood - This would have to go on for years for the one bad group to take all my chips off the table.
and bleached anus is right about people making money that bought a long time ago on equity appreciation but mobile home parks and self storage seem like you are setting yourself up to be dealing with the same poor smucks like the guy in the article.
That made me very curious about that kind of property. -
You god damned money changers sure do get nosey about the finances these days. I feel like I had to download 30 documents the last time I changed some money.Number1AtNumber2 said:I like these ideas. I got a good look into a guys finances that did very well with self storage so you make a good point about there being money there. And that is a good point about eviction for non payment.
Rural self storage could also be a play that is similar to Diamonds move with the parking lots. If you put them in small towns that end up blowing up you can make money on the land being worth more.
