The real estate news has not been looking good around the country. A lot of landlords are losing rent. We see some small businesses failing as well. Landlords on average have been reporting around 70% of rents collected.
In my personal real estate holdings I’ve been a little more successful. As of now I have 15 rental units in total. The gross income is as follows:
Quad: $800 each unit, $3,200 Total. With updating I believe I could get 1000/unit.
Duplex 1: $1000 each unit $2,000 Total. This is the duplex I wrote about before.
Duplex 2: $1000 each unit $2,000 Total.
Duplex 3: $1000 each unit $2,000 Total.
SFH 1: $1200
SFH 2: $1200
Condo 1: 1 Bed $1000 under market rent
Condo 2: 1 Bed $1850
Condo 3: Studio $1100
Gross Total: $15,550
100% of Rents Collected!
There are expenses, mortgage, tax escrow, insurance, small maintenance, HOA fees.
My debt on these properties is minimal though. The biggest expenses are tax and HOA fees.
How/why did all my tenants pay? The properties I own, I always make sure to buy in areas that I know are in demand and areas where I would like to live as well. My tenants all have good credit scores and most of them are young professionals. They’re not losing their jobs like a lot of unfortunate employees of bars and restaurants.
This is why when I see people on youtube saying they buy these $40,000 houses and they have a few dozen of them, I know they’re not in desirable areas and their tenants don’t have high credit scores. I generally wont buy a residential house/unit <100K and no more than 150K. Exceptions are always made when I see a great undervalued house in a desirable area. But thats generally what my units are going to be worth. Around 100K a unit.
To easily sum up my real estate strategy. I stick to a small easy to manage portfolio, low debt, desirable neighborhoods, and update the units.
When people buy cheap houses in a tertiary neighborhood they undoubtably will run into problems with their tenants, especially when we have a crisis like we do now. Do you think the tenants will be paying their rent during this pandemic. I don’t think so. I have a good feeling next month will be another positive month for me in real estate too. Then after that most states will be opened back up and hopefully people can return to some normalcy.
BOLD PREDICTION: This year the US stock market (S & P and/or Dow) could be positive.
As of May, 2020 the nasdaq is already positive for the year. I really think that as states open up and people get back to work the market will slowly recover. There is so much pent up demand for goods and services people are going to be shopping for many things, including buying real estate. Yes, there will be foreclosures especially from these 40K house landlords, but people want to shop. It’s the summer and prime real estate season.