Should I Get My First Rental During a Pandemic?

Question

Convince me why I should take the plunge and become a landlord at this time. With the #CancelRent movement, the eviction moratorium, and unemployment benefits either expiring or being attenuated, I have a hard time seeing how now is a good time to start being a landlord?

I live in Central MD and thought this might be the year I delve into the real estate market, acquiring at least one (my first) rental this year - hopefully two. But then the pandemic hit. And then with all the #CancelRent protests, eviction moratorium, and expired/attenuated unemployment benefits, I'm quite unsure now is a good time.

BJ Marshall · Answer

I'll be sure to double-down on tenant screening. That's good advice; it seems that the critical piece at times like this.Just today, I was browsing several local listings and found one where the numbers looked terrific. I drove there (only three miles away), and as I was walking around, one of the neighbors asked if they could help me. I mentioned I was looking at a property for sale, and we had a great conversation (ten feet away) about what the neighborhood is like!

Vilfreda Hoagland · Answer

@ BJ Marshall, Your post kind of scared me, because I'm doing that right now.  I just got under contract for my first rental/ first investment ever.  I did it because I'm in a good place right now.  I have a stable job that pays me enough to cover my costs and have some money left over.  I have enough for a down payment and closing costs. But, I haven't actually been paying attention to rental stuff and all the things you mentioned, I've been reading investment books, and analyzing properties. I'm working on one step at a time, and now that I'm under contract I started coming to these forums to prepare for listing and renting the property.

Your post made me realize that there are issues I haven't considered.  Your post made me kind of reconsider what I am doing.  But, my thought is that there is always something going on that makes it a bad time if I'm looking for a reason.  I can try to "convince" you by talking about low interest rates, but no one can convince you, this is your life, your choice.  You have all the risk and all the rewards.  Whatever you decide, best of luck to you.

Lindsay Davis · Answer

The real estate market tends to do well during crises and it’s a buyer’s market right now. Find a historically strong market and consider looking at OOS opportunities beyond your home turf. Look to where the jobs have been and where they are likely to stick around, as well. An economy like Huntsville, AL, for example, has significant employment levels in the aerospace sector and, more importantly, a highly educated workforce that has diverse employment opportunities available to them.

Anthony Wick · Answer

@BJ Marshall

If I lived in your area, I’d convince you to not invest. Then, all the deals would be left for me.

Pandemic. No pandemic. A deal is a deal.

Kenneth Garrett · Answer

@BJ Marshall

If you find a good deal and you understand your market you should be fine.  I continue to fill vacant unit’s during this time. My state has a moratorium on evictions.  Every month the moratorium gets extended.  Screening is very important at all times even more so now.  The president just approved the $400 a week additional unemployment payment.  It had expired on July 31 (was $600).  This will help tenants make there rent payments.  If you think about it $400 a week is 1600 a month.  This generally covers most monthly rents.  This is in additional to the regular unemployment benefits.  There is always going to be risk associated with investing.

Michael Henry · Answer

@BJ Marshall. I believe it depends on the location where you will be buying the property. If you are thinking low-end probably not I would wait but if I find a deal in a good neighborhood and good school district I buy it. I right now, at least where I live, the market is hot so it might be hard to find something worth wild anyway.

Robert Williams · Answer

I'm currently a rental property investor.  Look at this guide to get a good idea of how to do valuations:https://problems.com/resource/real-estate-investing/As long as you see better deals that meet your criteria, with enough safety, you will feel more confident in pulling the trigger.

Alex Olson · Answer

@BJ Marshall If you have a great deal go get it! Run the numbers and have contingency if they do not work. If it is only a good deal, still consider it but have others look at it. Take the plunge now on great deals as no matter the market it will still work. Hope that helps - hardest part is getting that first deal.

Matt Ziegler · Answer

Checking the numbers to be sure you have a deal, and then establish good rental criteria, then  screening, screening, screening. That is what is important, I believe. There are always risks and yet people will always need a place to live.

Best of luck on your adventure!

Maryanne Cameron · Answer

I closed on my second rental, a duplex, on March 16th. I'm in Upstate New York so it might not be the same market but people will always need to find a place to live. Someone on this forum told me people that own their own home might be foreclosed on, they'll need an A/B type value rental, people that live in A/B might need to downsize their rental costs so will move down the scale accordingly. If you've done the math, have some cushion there's no reason to sit on the sidelines...at least that's what I told myself as I signed the paperwork as the world was grinding to a hault!! PS - it's going okay so far! Can't wait for my next deal!

Should I Get My First Rental During a Pandemic?

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