What Does a Recession Look Like?

[Paul Anglin]

I have started investing in SFH rentals as a means to diversify my retirement income. I'm probably a decade or more away from retirement, but one of the major items I'm trying to plan for is a recession. My current business plan is highly leveraged as I'm trying to add properties as quickly as possible.

I am very new to this, and reading everything I can get my hands on, but this is a topic I haven't run across yet. That in mind, what does a recession look like for a rental portfolio? Making an uneducated guess, I can see one of two things happening. 

1. The first would be a major economic downturn will force lots of people out of jobs, and it will suddenly become very difficult to find tenants. Worst case, properties go unrented and I have to find a way to pay the mortgage on a portfolio of unrented homes. This would make rentals a high risk with regard to recession planning.
2. The second would be that same economic downturn forces people to lose their homes, and they are then driven to look for rentals to live in. Which would make rental properties a very safe hedge against a recession.

I'm sure I'm way oversimplifying this, but I'm hoping someone with experience can give me some ideas about how a recession would affect a rental property portfolio.

Thanks in advance!