What Markets Are the Best & Worst Positioned For Coronavirus?

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Rental Property Investor 路 New Castle, DE 路 Member since 2017 路 95 posts 路 102 votes
6y

I personally think Section 8 regardless of market is gonna come out of this recession in a new light. Yes, you will deal with lower quality tenants and higher turnover, but the bright side is at least 70% of your rent is covered. Might mess up your cash flow but they won't have to worry about missing a mortgage payment at least. 

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  • Account Closed
    Rental Property Investor 路 New Castle, DE 路 Member since 2017 路 95 posts 路 102 votes
    6y

    I personally think Section 8 regardless of market is gonna come out of this recession in a new light. Yes, you will deal with lower quality tenants and higher turnover, but the bright side is at least 70% of your rent is covered. Might mess up your cash flow but they won't have to worry about missing a mortgage payment at least. 

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  • Solomon Morris
    Rental Property Investor 路 MD 路 Member since 2018 路 287 posts 路 205 votes
    6y

    @Account Closed commits to will be bullet proof during a shake up in the economy.  Some voucher tenants are paying pennies on the dollar to keep a roof over their heads in comparison to market renters 

    1Reply
  • Scott Mac
    Austin, TX 路 Member since 2019 路 5k+ posts 路 5k+ votes
    6y

    Seems too early to tell. There are still so many variables. Such as what will the Federal, state and local Governments do to offset it, (some areas take steps to uplift their residents lives, and some areas give only lip service to it steering money to certain things that do little but continue the suffering as a profit center--such as some areas helping the homeless by giving them shopping carts vs really helping them).

    Also the underlying industry base will play into it, for instance Houston makes chemicals that are used worldwide in other industries, is that a positive or a negative---(and for how long) time will tell.

    2Reply
  • Russell BrazilBusiness Member
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    Real Estate Agent 路 Washington, D.C. 路 Member since 2012 路 17k+ posts 路 30k+ votes
    6y

    @Spencer Cornelia & @Alexander Felice what do you guys think about Las Vegas and the situation. Im assuming Vegas will be slammed pretty hard.

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  • Spencer Cornelia
    Investor 路 Las Vegas, NV 路 Member since 2017 路 321 posts 路 524 votes
    6y

    @Russell Brazil I've been asked by one tenant to reduce rent. And I reduced rent for another two great tenants. Want to get ahead of it. My opinion: the rental supply is about to increase as people who just got laid off will all of a sudden not have their mandated "can't live with roommates" first world living mindset removed.

    Add in Airbnb market potentially forcing owners to get some rent.

    This isn't based on numbers or anything, just my hunch.

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  • Robert C.
    Investor 路 San Francisco, CA 路 Member since 2016 路 338 posts 路 444 votes
    6y

    @Russell Brazil, You know... it sounds as if Trump may be unwilling to continue the social distancing and economic restraints beyond a month or so. If that ends up being true, and the federal government opens everything up again early, this question could get pretty "interesting". You'll end up having some states that will try to keep quarantine procedures going, and then you'll have other states that will try to go back to business as usual. You could have very different results as to which locations become economically resilient sooner even if local healthcare systems are a mess. 

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  • Jack Seiden
    Real Estate Agent 路 Washington DC 路 Member since 2016 路 847 posts 路 654 votes
    6y

    I would think cities that rely on tech, government and actually manufacturing will do ok relatively speaking. More touristy places (Vegas, Orlando, Miami,New Orleans etc) so actually similar to 08 could take a beating. But I also think it鈥檚 worth seeing which areas get hit worst with their virus itself as that could move markets. I also think depending on how long and devastating this virus is you could actually see some trends of people moving back to suburbs and rural areas and away from cities if cities are hit disproportionately and that scar鈥檚 people.

    0Reply
  • Manaia Alalamua
    Contractor 路 San Antonio, TX 路 Member since 2019 路 80 posts 路 70 votes
    6y

    @Russell Brazil 

    It's pretty early to tell, but I'm based in Hawaii and we literally just shut-down, i.e. no public places, mandatory stay @ home orders from the Mayor and Governor, etc. I believe we are going to hurt pretty bad b/c our state economy is hugely reliant on Tourism, and that has pretty much halted. We just implemented (or soon-to-be) a 14-day mandatory quarantine for all visitors coming into the State. In Kauai, they have implemented a curfew for all residents on the island. It appears to me that things will take some time to settle down.

    I just hope we can take care of it soon. Aloha.

    0Reply
  • Kirk R.
    Peoria, IL 路 Member since 2013 路 967 posts 路 383 votes
    6y
    Originally posted by @Spencer Cornelia:

    add in Airbnb market potentially forcing owners to get some rent.This isn't based on numbers or anything, just my hunch.

     think you're right.  glut of empty rentals.  families moving in together.  no travel for air bnb = look for renter.  hotels need people to stay.  one of our hotels offered rooms for cv positive.  if cv cured today.  maybe 3 month ramp up for travel industry?

    if there are many cv deaths :(.  more vacant housing.

    0Reply
  • Josue Vargas
    Real Estate Agent 路 San Antonio, TX 路 Member since 2017 路 814 posts 路 466 votes
    6y

    Interesting question.  Apart from properties that Government back up as subsidiaries, the usual trend governs.... 

    I could expect class C or below markets going up in demand due to negative factors (due to COVID-19), which of course is not a good thing to happen this time for landlords.  Class C/D population will likely be with higher unemployment, higher debts, higher risks of conglomeration, among others.  Your new Class C/D tenant will likely be affected by one of these things among other, not counting evictions.  

    Best markets now, Class A/B, strong communities, stable jobs, usually good savings account, constant good-excellent credit scores, could back-up rent if needed.  One of my units is going up for rent on April, is a class A/B, and so far I had no issues at all, many people have inquire about it (mostly from California thought).  I like my current tenants, they pay on time, adhere to contract, nothing less, nothing more.  

    Class A/B a winner this case.  

    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant 路 Summerlin, NV 路 Member since 2014 路 45k+ posts 路 66k+ votes
    6y
    Originally posted by @Spencer Cornelia:

    @Russell Brazil I've been asked by one tenant to reduce rent. And I reduced rent for another two great tenants. Want to get ahead of it. My opinion: the rental supply is about to increase as people who just got laid off will all of a sudden not have their mandated "can't live with roommates" first world living mindset removed.

    Add in Airbnb market potentially forcing owners to get some rent.

    This isn't based on numbers or anything, just my hunch.

    I closed on a flip i had here in Vegas on Friday.. buyer first time home buyer FHA price point 235k East of the strip.. She was laid off by Casino she had to get letter from Casino that she would be back to work after the 30 day shut down.. She got that letter and the loan funded and she moved in over the weekend.

    I have also seen the Mayor at odds with Governor about the 30 day shut down.. so there is pressure to go no longer than 30 days.. Question will be will the public come back.. probably take some time but think they will.. people will be really tired of being couped up and want a fun weekend etc. 

    Plus in Vegas cant discount the flight from Hi tax states CA OR to name two.. Folks that can work from home that move for the tax and weather benefits .  

    other benefit for owning in Vegas is property tax's are very low  cap ex low  stucco building tile roof desert landscape does not get much cheaper to own compared to other parts of the country.

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  • Nick Gann
    Real Estate Agent 路 Murfreesboro, TN 路 Member since 2019 路 194 posts 路 181 votes
    6y

    @Manaia Alalamua

    My wife and I got back from there two weeks ago, right before all this really set in. Luckily got our skydive in as I hear thats shutting down in June? And got our free dive with sharks in as well. May be a good time purchase property there for the eventual recovery?

    0Reply
  • Nick Gann
    Real Estate Agent 路 Murfreesboro, TN 路 Member since 2019 路 194 posts 路 181 votes
    6y

    @Russell Brazil

    Anything with manufacturing, shipping, refining of raw materials will hold value and recover best. But then producing anything is where real value is made.

    0Reply
  • Alexander FelicePro Member
    Guy with Great Hair 路 Austin, TX 路 Member since 2013 路 2k+ posts 路 4k+ votes
    6y

    @Russell Brazil 

    I can't speak for Vegas much since I'm not there anymore, I find it likely that it'll be a highly volatile market since it's main source of income (tourism) has basically been turned off. The total amount of damage will be a product of how long things are shut down, and that I can't know. 

    The town I live in now, Fayetteville NC is next to a very large military base. So far we haven't noticed much of the lock down. Restaurants and bars are closed and a good portion of our economy is based on that service income so I don't want to say there is no effect, but in many ways it's business as usual here. During the last crash this town was highly insulated as well, simply because the military makes up about 15% of the total population here and they won't have any negative job ramifications and that stability trickles into the market. 

    We have a close relationship with the section 8 office, I think that program and other housing programs will be expanded during this. Lower income assets will increase in demand and availability to subsidies. 

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  • Nicole Heasley Beitenman
    Investor 路 Youngstown, OH 路 Member since 2017 路 2k+ posts 路 2k+ votes
    6y

    STL's will get pummeled. 

    1Reply
  • Alex KhanPro Member
    Specialist 路 Southeast Michigan 路 Member since 2015 路 300 posts 路 244 votes
    6y

    I can only speak for my Market which is Detroit and the surrounding suburbs in Michigan. 

    Detroit Michigan will rise and shine once again! 

    Known as democracy of Arms in ww2 (educate yourself why they received that name) 

    Number 1 for Manufacturing in USA 


    Infrastructure of Detroit and even surrounding suburbs is built for manufacturing, trucking and import/export. 

    Port of Detroit and Great Lakes! Fresh water in a hunger games society! 

    Plenty of farm land and livestock in the state of Michigan. 

    Take a close look at your bottled water and see where the water comes from. 

    Prison industry is big business in Michigan with over 17 facilities and many of them are old naval and military bases which can easily be used for hospital facilities. (Beds) 


    Michigan鈥檚 governor is already using prisoners and prison factories to produce masks and medical supplies

    Michigan has produced over 1.25 billion barrels of oil and more than seven trillion feet of natural gas since the discovery of the Saginaw Field in August 1925. ...

    Michigan has more than 14,000 producing wells of oil and natural gas. 

    Michigan is the only state that has current oil and gas production from beneath the Great Lakes.

    Michigan      has a large amount coal mines and reserves for energy if needed. 

    Detroit Salt mine industry, one of the oldest industries in Detroit before the automobile industry. 

    Michigan has an abundance of Limestone, copper, And many other essential resources for production, manufacturing and development of societies. 

    If production and manufacturing is brought back to The United States Of America 馃嚭馃嚫; Detroit and Michigan will be a winner! 

    If we go to a hunger games society(hopefully not) Michigan will be a winner! 

    Other markets that are highly inflated lacking natural and manufacturing resources will be in for a reality check and deflation at its finest!

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    • Account Closed
      Member since 2018 路 16 posts 路 9 votes
      6y
      Originally posted by @Spencer Cornelia:

      @Russell Brazil I've been asked by one tenant to reduce rent. And I reduced rent for another two great tenants. Want to get ahead of it. My opinion: the rental supply is about to increase as people who just got laid off will all of a sudden not have their mandated "can't live with roommates" first world living mindset removed.

      Add in Airbnb market potentially forcing owners to get some rent.

      This isn't based on numbers or anything, just my hunch.

      If you take a look at the AirBnB subreddit, they are all freaking out. A lot of them have lost a lot of their bookings.

      0Reply
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