Increased Risk for Landlords?

Risk reward is still good. But let us see how 2021 plays out.

A lot of the comments do sound a bit like when none stock investor people say "The stock market is just gambling. I would never put my money in there."

I think most people who actually own rentals are worried about the new risk but still understand the potential long term benefits.

Including rental income, appreciation, paying down the loan and other tax advantages rentals have been worth around 20% per year over 12 years from my experience.

My only regret is not buying more earlier.
 
If our government imposes an eviction moratorium the taxpayers should cover any costs of the moratorium - not landlords. Ideally the renters would pay back any rent owed, but that wouldn't happen in many cases. I've never been a landlord, but can imagine what a burden this mandate could be.
 
Yes. I said earlier if the government tells the landlords what to do (no evictions) then they should cover the landlords losses for that imposed decision.

If the government helps renters with money for the rent then the eviction moratorium should not be necessary.
 
captain3d said:
Risk reward is still good. But let us see how 2021 plays out.



A lot of the comments do sound a bit like when none stock investor people say "The stock market is just gambling. I would never put my money in there."



I think most people who actually own rentals are worried about the new risk but still understand the potential long term benefits.



Including rental income, appreciation, paying down the loan and other tax advantages rentals have been worth around 20% per year over 12 years from my experience.



My only regret is not buying more earlier.
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Until you are ready for freedom from managing the rentals and wont use a property management company(I’ve found them to be universally bad) and must sell. The tax hit is massive (recapture depreciation, federal and state capital gains, net investment tax) and negates a lot of the benefit you list. There’s also a massive effort involved in divesting out of rentals. I’ve been renovating and selling which is a pain but if you don’t renovate and upgrade, real estate investors aren’t willing to pay what the properties are worth.
 
Letj said:
Until you are ready for freedom from managing the rentals and wont use a property management company(I’ve found them to be universally bad) and must sell. The tax hit is massive (recapture depreciation, federal and state capital gains, net investment tax) and negates a lot of the benefit you list. There’s also a massive effort involved in divesting out of rentals. I’ve been renovating and selling which is a pain but if you don’t renovate and upgrade, real estate investors aren’t willing to pay what the properties are worth.
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And you don't get paid for all the hours you put into doing repairs or upgrades when you do them yourself.
You do get to deduct the expense, so spend 4 hours painting a room, and deduct $40 paint, $2 brush, $2 rollor, $1 tape, total deduction: $45
Means a tax savings of $9 (if in 20% taxable range). So worked for $2/hr savings.
Loss of 4 hours of life :eek:
 
Sunset said:
And you don't get paid for all the hours you put into doing repairs or upgrades when you do them yourself.
You do get to deduct the expense, so spend 4 hours painting a room, and deduct $40 paint, $2 brush, $2 rollor, $1 tape, total deduction: $45
Means a tax savings of $9 (if in 20% taxable range). So worked for $2/hr savings.
Loss of 4 hours of life :eek:
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Yes that’s absolutely true. All in all real estate was good for my net worth but it didn’t come without risk and hard work (read a lot of sweet equity).
 
Letj said:
Until you are ready for freedom from managing the rentals and wont use a property management company(I’ve found them to be universally bad) and must sell. The tax hit is massive (recapture depreciation, federal and state capital gains, net investment tax) and negates a lot of the benefit you list. There’s also a massive effort involved in divesting out of rentals. I’ve been renovating and selling which is a pain but if you don’t renovate and upgrade, real estate investors aren’t willing to pay what the properties are worth.
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I do not manage them. All remote property managers. I do appreciate the selling issue for the future. As I do with taxable stog gains and any other gain for that matter.
 
Not Yet

While we have had a few late payments, we have

1) helped tenants find local programs to get current
2) made it very easy to pay in small batches
3) kept communication lines open
4) have seen some tenants just leave after a few months of non-payment, while this would usually bother me, I think they are doing to best they can to be fair by not occupying the unit that we could otherwise generate revenue on.

All in all, this whole period has been pretty smooth.
 
Sunset said:
So far no affect, keeping my fingers crossed.
Have in the pre-Covid days, had late rental payments, but tenant warns me, and does pay maybe a week late.

Reality is, now that we are retired, I'll be happy to sell off my rental property as I don't need the mental hassle and mental worry. I'll put the money into an ETF and take long vacations without thinking someone may email me about a plugged toilet.
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We are thinking the same thing, I am targeting my kids graduation to wind down the properties. I have found that the tenants are great, but there are many forces against landlords and we are definitely isolated.
 
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