Passing the height of the pandemic, and now with eviction courts back open, there is a backlog of eviction cases and landlords applying to evict their tenants.
Just in this video alone the reporter states that the Sheriff’s office has conducted 40 evictions in the last 10 days.
What you can do to avoid
The landlord mentioned he was unable to discuss. He explained how it was an embarrassment saying “I’ve never discussed it…I look at it as an embarrassment.”
For new investors, the goal is to constantly seek help. Whether it is family and friends to start, you’ll need to continue to search for assistance from experts.
With that in mind, consider his next mistake, as he mentions, “…I’ll turn it over to the pros…” This means he was not leveraging the services All the real estate property manager. A property management company as well worth the fee. For only 8% to 10% of monthly rental income, the property management company would take the tenant through a series of background screening checks, manage the repairs during the tenants stay and should there be an eviction, the property management company would manage the entire process. Especially for a new investor, there are entirely too many rules and laws to follow.
Consider the opportunity cost. All the things that you have to do and learn versus fighting the next investment vehicle or rental property that could make you more money.
It’s Okay
Yes it’s bad. Everything that occurred is unfortunate. This will cost time, money, frustrations and other emotions. The hassle of the paperwork, turning over the unit, and finding the next tenant will be a lot.
What’s important to realize is the Gratitude these three landlords have in the article. They explained that they are Beyond thankful that they just have the property back. This allows them to move on to the next step and the next chapter of their Journey.
what’s most important is that they will recover. Let’s say, to keep the number simple, the rental income is $1,000 a month. Let’s also say that the tenants did not pay for one full year. 12 months at $1,000 per month = $12,000 of unpaid rent. Assuming a mortgage of $600 per month, there is an additional $7,200 of money spent out of the landlords pocket. Feel Free to include turnover costs of around $5,000. one could argue, the total cost of this tenant’s doing is $24,200.
Yes. That is a lot of money. But at the same time it’s not. Over the life of a 30-year loan, this rental property well earn a bare minimum of $360,000 (30 years * $12,000 of gross rental income).
There will come a time where he will recoup the $24,200 worth of expenses because of this tenant. Rental property investing is a long-term game and should be viewed as such. While there are short-term losses such as the one mentioned in this article, this is a long game and there will be time to make it up.
This also does not include the other benefits of real estate Investments such as: tax benefits, rental income appreciation, property value appreciation and mortgage paydown.
The article also mentions that they will not be receiving any back rent. There are money judgments one could apply for to potentially receive back rent. otherwise as we mentioned above it’s only a matter of time before the landlords recoup their funds.
Work with professional property management companies to vet tenants to avoid this happening to start. Purchase properties in good areas and appropriate amenities to attract high-quality tenants.
Mistakes will happen, but when they do know that real estate investing is a long-term game. continue to build your dream team and you’re supporting members to help you grow and build your portfolio.
Read the full article here: https://www.wbaltv.com/article/baltimore-landlords-evictions-covid-19-pandemic/39310712#
