Who wants to be a landlord now?

User Forum Topic
Submitted by scruffydog on September 11, 2020 - 6:58pm

What .gov has done at all levels - and is planning to do - in response to the covid thing is unprecedented. Tenants not having to pay rent until Jan 2021. Can't evict anyone. Why do landlords have to bear the full financial brunt? Sure there is *some* relief offered to landlords with certain criteria but it is inconsequential. Sure people need a place to live but for free?! Sure you can chase down tenants in the courts for rent payment after covid ends...good luck. Tenants need to eat - why can't they go to Ralphs and get free food? Tenants need transportation for their jobs - why can't they go to the nearest car dealership and get a free car.
Tenants need free phones too! Explain to me why .gov can eliminate legal contract agreements and take my property (income) without compensation! And check out Prop 21...sheech! Guess the only way out is to sell my rentals and get killed with taxes. SDR? Rant off.

Submitted by Coronita on September 11, 2020 - 10:29pm.

have you had any tenants not pay you during covid?

Just curious.

anyone have any tenants not pay full amount? Also curious

Submitted by svelte on September 11, 2020 - 8:48pm.

As I recall flu you have tenants on H1-B visas...those folks are probably pretty likely to keep paying because (a) they still have jobs and (b) they don't want any blemish on their record that would give cause for being ousted. On this side of the pandemic your decision seems pretty wise.

I would also imagine that lower cost rentals have a higher chance of no-pays right now, probably south of 8?

It will be interesting to hear what the landlords on this site say.

Submitted by Escoguy on September 11, 2020 - 10:32pm.

Mine are all paying, but I did cut two a break.

One went out and bought a new car. :)

Had the impression the other one didn't need it either.

I'm upper mid tier. 5 SFHs: avg $3600 per month.

Submitted by Coronita on September 11, 2020 - 10:40pm.

So far, all 4 properties here have made full rent payments.

3 condos are under $2000/month.
1 sfh@ $4300/month

knock on wood

Submitted by Reality on September 12, 2020 - 12:46am.

So impressed by you fucking tycoons.

Submitted by Escoguy on September 12, 2020 - 10:25am.

LOL

Submitted by SDNative2 on September 12, 2020 - 3:25pm.

As an owner of a "south of 8" SFR in the College Area north of EC Blvd, my tenants have been paying $2350 without so much as a peep.

Submitted by Coronita on September 12, 2020 - 4:29pm.

So basically , despite the fear of a rent strike, no one here so far has had to deal with a non paying tenant.

That or folks that have don't want to talk about it

Submitted by flyer on September 12, 2020 - 4:51pm.

Have many rentals in San Diego County and elsewhere in areas where demand has remained very high. No problems to report so far.

Submitted by Escoguy on September 12, 2020 - 6:37pm.

I'll admit I'm feeling a touch adventurous.

I close on a new rental in 4S in about a week and have another one under contract, as the seller is in a BK, might take a few months.

So far, every time I have one open up, I have a strong qualified tenant with a good solid job come in within days. I may have to make a minor compromise and allow a dog but we know how to deal with that.

For all the talk of isms', we don't have the choice to shut things down, interest rates are being held down, there is limited new inventory and new construction. A relative of mine used to work in the Treasury dept in Washington, he explained basic policy to me about 15 years ago. The government wants consumers to feel "wealthy" with rising home equity so they will borrow and spend. They don't want a high savings rate and austerity for fear of a contraction.

So combine that and we have the effect of housing inflation, rent inflation but now many underutilized people, unemployment fortunately not too high here but regardless of who wins, they have to keep the game going.

Submitted by svelte on September 12, 2020 - 8:09pm.

Escoguy wrote:

So combine that and we have the effect of housing inflation, rent inflation but now many underutilized people, unemployment fortunately not too high here but regardless of who wins, they have to keep the game going.

And that's the problem. Sooner or later, the music has to stop.

I keep thinking about Japan who played that game very successfully for a long time...but as with every game of musical chairs, sooner or later someone's butt is not on a seat when the needle left the groove.

Submitted by flyer on September 12, 2020 - 10:25pm.

Agree.

Don't blame people for wanting to get into the game, but we would not feel comfortable with our RE investments unless we had gotten in years ago. We started very young, and were buying SFH's etc., in LJ and CV, and other similar locations when they were under $500K, so, everything is paid off.

Hard to tell right now if the country will be able to float a real recovery or not. Hope for the best, but plan for the worst.

Here's an interesting article:

https://www.npr.org/sections/money/2019/...

Submitted by Coronita on September 13, 2020 - 7:50am.

Plenty of people are doing fine without being given a silver spoon , a far more impressive feat. I mean as the saying goes the best way to make $1million is to be given $990,0000 first hardly impressive or a challenge...how many toys can you possibly get before one wakes up and realize it's a big game and a big joke...Far better people who started with a lot less making a much bigger impact on this world. Elon Musk is awesome.What a remarkable accomplished person.....and the great thing about this country . Rich or poor, eventually everyone ends up the same way ... Dead....

Submitted by The-Shoveler on September 13, 2020 - 8:35am.

new housingnew housing

Submitted by ltsddd on September 13, 2020 - 9:35am.

Escoguy wrote:
So far, every time I have one open up, I have a strong qualified tenant with a good solid job come in within days. I may have to make a minor compromise and allow a dog but we know how to deal with that.

Escoguy,
Do you manage the rentals or do you use an agent? What do you think a 5/3 @3500sf SFH in 4S would go for? Thanks.

BTW., my 4/2s in MM are rented out so cheap (at 2300 or less) that I don't think the tenants would want to prove that they are the bigger idiots than the landlord (me) by making a fuss about payments.

Submitted by Coronita on September 13, 2020 - 12:33pm.

ltsddd wrote:
Escoguy wrote:
So far, every time I have one open up, I have a strong qualified tenant with a good solid job come in within days. I may have to make a minor compromise and allow a dog but we know how to deal with that.

Escoguy,
Do you manage the rentals or do you use an agent? What do you think a 5/3 @3500sf SFH in 4S would go for? Thanks.

BTW., my 4/2s in MM are rented out so cheap (at 2300 or less) that I don't think the tenants would want to prove that they are the bigger idiots than the landlord (me) by making a fuss about payments.

4/2 in Mira Mesa is ridiculously cheap. I have a 2/1 and it's close to $2k lol.

So.. no massive rent strike to speak of. I think this was probably exaggerated in as much people who took forbearances. st least here in SD.

Submitted by gzz on September 13, 2020 - 1:22pm.

Calculated Risk is tracking this. Large complex on time rent payment declined from
81 to 76% year over year.

The business model of these larger complexes to get people with weaker credit and charge more and have aggressive collections. So small landlords probably have an even smaller decrease in payments.

Being choosy with tenants and not raising rent has probably cost me about $10,000 over many years, which is very little compared to the financial and mental health stress cost of a single really bad tenant who has nothing to lose, is judgement proof, and knows how to work the courts and will lie.

I think the set of such people, and the set of people with 750+ credit scores and a reference from prior landlords, barely overlaps.

Submitted by Escoguy on September 13, 2020 - 2:18pm.

Itsddd

I manage everything myself: purchasing, refinancing, tenant screening.
I also work.

My wife manages repairs, does painting herself where possible, landscaping as needed. But I wouldn't want to give the wrong impression, most years, it is very manageable, but we did spend like 30K on our oldest home (built in 2000) two years ago, and now it's like a brand new house again.

A 5/3 in 4S, at 3500 sf would be about $4600-$7000, depending on upgrades etc. I personally probably wouldn't plan on more than $5500 but there are clearly those who can and will pay at the higher range of that number.

I've been reviewing rental list prices and it seems like 4S has a few categories:

1) 3BR+ detached, the detached condo types which are 1400-1600sf and go for $3000-$3500.

2) The next level is often in the $4500+ range and usually 4BR plus.

Our new one is about to hit the market in about two weeks at 1900 sf with 3 full sized bedrooms plus one small bedroom which can be an office. Plan to ask about $4000.

I spoke to a few managers last week who had some of the smaller condo sized units still on the market and they wouldn't take pets, some of them had approved an applicant but something changed.

3) Dream home, Santaluz category: With some individual listings of 7-10K per month. But you're usually out of 4S proper at that point. Would need to do the math a few times before jumping on anything like that.

As far as MM, it's a very different demographic, school district, you may be a touch light at $2300 but if everyones happy why not.

I tend to make small changes with current tenants, usually in the $50-$90 per year range, more often $50. Usually wait for a tenant to leave to make a bigger jump. If I don't have a qualified person within a week or two, I'm mis-pricing it. There appears to be too much pent up demand.

Submitted by Escoguy on September 13, 2020 - 3:10pm.

Flyer

Admit buying in this environment is new for me. Easiest path is to let everything I have run and take long vacations in Europe with the kids.

First SFH bought in 2000, second 2003, then 3 in 2013 and one in 2104.
Two are paid off, four with loans have 60% equity and rates avg 2.75%.

Glad all yours are all paid off, that is plan B for me.

I think I can do 15-17 annual% ROE vs the 2.75% cost of mortgages (both pretax) by buying a new one. Given market dynamics, we are walking into a day one equity of 35K which has given us a buffer.

Baseline plan was 1% appreciation for 10 year period. I've now upped it to 1.5%. But still project 175% return over 10 years with 1.5% annual appreciation and approx 150K of principal pay-down. If we see a 20% price collapse, then of course these assumptions go out the window, but still hard for me to see a scenario where I lose money over 10 years.

Submitted by ltsddd on September 13, 2020 - 4:18pm.

Escoguy wrote:
A 5/3 in 4S, at 3500 sf would be about $4600-$7000, depending on upgrades etc. I personally probably wouldn't plan on more than $5500 but there are clearly those who can and will pay at the higher range of that number.

Thanks for that first-hand info. That's a staggering figure. We were thinking of renting ours out for around $3,500. I am not cut out to be a landlord. May be I should hire either you or FLU to manage my rentals. Even for the 10% fee, I think I still would come out ahead.

Submitted by flyer on September 13, 2020 - 6:13pm.

Coronita wrote:
Plenty of people are doing fine without being given a silver spoon , a far more impressive feat. I mean as the saying goes the best way to make $1million is to be given $990,0000 first hardly impressive or a challenge...how many toys can you possibly get before one wakes up and realize it's a big game and a big joke...Far better people who started with a lot less making a much bigger impact on this world. Elon Musk is awesome.What a remarkable accomplished person.....and the great thing about this country . Rich or poor, eventually everyone ends up the same way ... Dead....

Totally agree that many are doing well in this environment. Just said I wouldn't be comfortable getting in right now, as I responded to another post that alluded to the same.

Laud all the remarkable people in the world, most of us will never be them, but, as you said, no one beats death. To put it more bluntly, as Snoop says in his latest commercial, "Down the hole we all go." Still, it's fun to watch Silicon Valley spending billions on projects that will try to beat death.

We're very grateful for our lives, and for the ability to help our family, and others, as my family's worldwide charity efforts have been doing for decades.

We couldn't be happier, and wish the same for others.

Submitted by flyer on September 13, 2020 - 6:15pm.

Escoguy wrote:
Flyer

Admit buying in this environment is new for me. Easiest path is to let everything I have run and take long vacations in Europe with the kids.

First SFH bought in 2000, second 2003, then 3 in 2013 and one in 2104.
Two are paid off, four with loans have 60% equity and rates avg 2.75%.

Glad all yours are all paid off, that is plan B for me.

I think I can do 15-17 annual% ROE vs the 2.75% cost of mortgages (both pretax) by buying a new one. Given market dynamics, we are walking into a day one equity of 35K which has given us a buffer.

Baseline plan was 1% appreciation for 10 year period. I've now upped it to 1.5%. But still project 175% return over 10 years with 1.5% annual appreciation and approx 150K of principal pay-down. If we see a 20% price collapse, then of course these assumptions go out the window, but still hard for me to see a scenario where I lose money over 10 years.

Congratulations on all of your acquisitions. It's definitely a challenging environment, but it sounds like you have a solid plan, and I wish you all the best.

Submitted by 42nate1 on September 13, 2020 - 7:05pm.

I've replaced 3 tenants in the last 12 months.

-had to file an eviction & tenant left in January & new tenant moved in early February before COVID. No rent price change. Did lose a month rent & some damage. Very lucky to get that tenant out just before COVID.

-tenant got divorced. Moved out in March. I had a huge volume of interest during COVID and was able to increased rent $200. Surprisingly very easy.

-Tenant lost job due to COVID & left San Diego in August. I listed on Zillow after he gave notice. Received maybe 50-60 inquiries within days, and 12 applications without any tours. Tenant left on Tuesday, cleaned Wednesday, and new tenant moved in on Thursday. This was a long-term tenant & I increased rent $600.

Lack of adequate supply in SD means demand is strong. We were really unsure how long the house would be vacant with the divorced tenant.

Zillow is wonderful. It does the applications, credit check, background check & collects rent. I do chose my tenants carefully.

All tenants have paid every month during COVID.
We will see what the fall/winter brings as we move into traditional flu season.

Submitted by Coronita on September 13, 2020 - 8:15pm.

42nate1 wrote:
I've replaced 3 tenants in the last 12 months.

-had to file an eviction & tenant left in January & new tenant moved in early February before COVID. No rent price change. Did lose a month rent & some damage. Very lucky to get that tenant out just before COVID.

-tenant got divorced. Moved out in March. I had a huge volume of interest during COVID and was able to increased rent $200. Surprisingly very easy.

-Tenant lost job due to COVID & left San Diego in August. I listed on Zillow after he gave notice. Received maybe 50-60 inquiries within days, and 12 applications without any tours. Tenant left on Tuesday, cleaned Wednesday, and new tenant moved in on Thursday. This was a long-term tenant & I increased rent $600.

Lack of adequate supply in SD means demand is strong. We were really unsure how long the house would be vacant with the divorced tenant.

Zillow is wonderful. It does the applications, credit check, background check & collects rent. I do chose my tenants carefully.

All tenants have paid every month during COVID.
We will see what the fall/winter brings as we move into traditional flu season.

So even with adversity, most tenants were not an asshole about things during covid, despite what some politicians paint the picture to be. My faith in Americans has been restored.

Submitted by svelte on September 14, 2020 - 6:00am.

42nate1 wrote:

Zillow is wonderful. It does the applications, credit check, background check & collects rent. I do chose my tenants carefully.

Wow so Zillow may be an even better tool for renters/landlords than buyers/sellers. I didn't know that!

Submitted by svelte on September 14, 2020 - 6:01am.

Coronita wrote:

So even with adversity, most tenants were not an asshole about things during covid, despite what some politicians paint the picture to be. My faith in Americans has been restored.

San Diego is a market with way more demand than supply.

It may not be the same in areas of California where that is not true - if there are any in California right now.

My faith won't be fully restored until I see what happens in November.

Submitted by Coronita on September 14, 2020 - 6:53am.

svelte wrote:
42nate1 wrote:

Zillow is wonderful. It does the applications, credit check, background check & collects rent. I do chose my tenants carefully.

Wow so Zillow may be an even better tool for renters/landlords than buyers/sellers. I didn't know that!

it's way better than Craigslist

Submitted by ltsddd on September 14, 2020 - 6:53am.

svelte wrote:
42nate1 wrote:

Zillow is wonderful. It does the applications, credit check, background check & collects rent. I do chose my tenants carefully.

Wow so Zillow may be an even better tool for renters/landlords than buyers/sellers. I didn't know that!

Thanks Svelte. I actually missed that para from 43nate1's post.

Submitted by sdrealtor on September 14, 2020 - 9:51am.

svelte wrote:
42nate1 wrote:

Zillow is wonderful. It does the applications, credit check, background check & collects rent. I do chose my tenants carefully.

Wow so Zillow may be an even better tool for renters/landlords than buyers/sellers. I didn't know that!

Yes Ive been using it for several years and reccomending it to clients for their rentals. Back in the day, Craigs List was the go to for rentals but it got very scammy quickly. Zillow is the de facto market leader for searching for rentals and for self managing them

CL is still good for market research as you can do so anonomously.

Submitted by sunny88 on September 15, 2020 - 9:04pm.

In my case 5 out of 23 asked for a reduction of rent and I granted them a 20% discount for 3 months. 4 tenants asked for rent deferment and 14 have been paying on time.

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