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Updated almost 4 years ago,
Anybody trading cash flow for safety?
Readers Digest version: tightening requirements but making less because I'm scared of getting "rona-scammed.
I recently sold a property and 1031'd into two B+ class properties instead of the typical C class property that is usually the "sweet spot" for cash flow yet decent tenants in my area. I probably could have purchased 3 C class houses which would have cash flowed more per month, but I'm opting for what should be better tenants.
I'm also charging 2 months security deposit and only doing 6 month leases. I'm underpricing the units by 50-75$ to get lots of attention on my ads but laying out a pretty strict rental requirements (3x rent in salary, 650+ FICO, etc)
The shame is that I probably could have cash flowed more and helped 3 decent tenants find 3 decent place to live, but now I am only helping 2 great tenants rent 2 great houses. The government eviction bans, ostensibly designed to help tenants, are forcing me to play more defense and only rent to people who are probably on their way to be home owners in a few years anyways. Applicants who are "marginal" on paper, but might have been really good renters, are shut out of the game.