THE PANDEMIC IS CAUSING A RENT CRISIS, IS NOW THE TIME TO BECOME A LANDLORD?
TODAYS GUEST AUTHOR: Robert Dell’Osso
I’d like to introduce today’s guest author, Robert Dell’Osso who is the President of MasterKey Property Management located in North Carolina. Robert manages my rental properties in Raleigh and Durham, NC. Of the more than a dozen property managers I have worked with in multiple states, Robert is the ONLY manager I recommend to family and friends.
IS NOW THE TIME TO BECOME A LANDLORD?
There is no doubt that COVID-19 has caused an economic crisis in our country. However, it has not affected some parts of the country in the same ways that it has affected others.
Certain cities are more impacted than others depending on what their local economies are primarily driven by. Take the Raleigh-Durham market for instance. We haven’t seen any real impact for the homes we manage other than a few tenants who temporarily went on payment plans but are back to paying full rent each month and actively paying their balances off. Other property managers in the area who rent mid-range homes and up ($1100+) have told me the same.
In Raleigh-Durham our local economy is driven heavily by jobs in the IT, pharma, biotech, medical, state government and to a degree the financial services sector. There hasn’t been much job loss in those fields around here compared to other sectors and other parts of the country.
I think one thing to watch out for is homeowners who took forbearance, whether they really needed it or not. Americans tend to spend every penny they get. If they went on forbearance and have been on it for 4-6 months of not having to pay a mortgage payment they have adjusted their lifestyle and see those funds are discretionary now. When forbearance ends the bank is going to want their money and if they can’t pay they will either foreclose or involuntarily modify their loans which means they won’t be able to get a new loan of refinance for 3-5 years.
Many investors are currently waiting for what they believe is an upcoming foreclosure crisis. I think that’s the bigger issue versus the rental market. In my opinion, the rental industry is about the closest thing you can get to that is recession proof. People always need a place to live and if they can’t buy they rent. The pool of renters could increase quite a bit over the next 12 months if there is a wave of foreclosures.
I believe (and so do many of our clients) that this is still a great time to buy rental properties. Most of the clients we work with are long term buy and hold investors. Several are actively looking for additional properties to add into their portfolio.
What about people who want to be landlords and don’t yet have that first property? Yes, it is true that you typically need 20-25% down if you are buying a property to hold as a rental. You can do that or another option is purchasing a home, living in it for a year and then turning it into a rental and moving on to your next house, live in that for a year and then turning that into a rental, etc, etc. With this method you can buy homes sometimes for as little as 3% down. Commonly this is referred to as house hacking and is becoming very popular with landlords who don’t want to go the 20-25% down payment route. A lot of people think you have to be “rich” to be a landlord. If you “house hack” that is not the case. Within a few years you can have a few rental homes in your portfolio setting you up nicely for some great monthly income and get you on a nice track for that income to help support your financial goals.
About US – Masterkey Property Management
Masterkey Property Management strives to become the premier property management and real estate brokerage company in the Raleigh / Durham area. We provide full end-to-end residential property management for single-family homes, condos, townhomes, and apartments throughout the region. We also manage small commercial properties. By treating every property like our own, we’re able to maximize growth and revenue and build a positive reputation. As a locally owned and operated company, we communicate with our clients and customers every step of the way and are always available to help.
Real Estate Brokerage
As a full-service real estate brokerage, we help buyers, sellers, and investors for all types of projects and transactions. We’ll leverage our vast experience and knowledge of the local market to help you get the best deal.
Our Management Areas
We provide rentals, full-service property management, and real estate brokerage services in Wake County (includes Apex, Cary, Fuquay-Varina, Holly Springs, Morrisville, Raleigh, and Wake Forest), Eastern Durham County, Chatham County, RTP, and Western Johnston County, North Carolina.
Please feel free to contact us to learn more about how we can help you achieve all your property-related goals.
Masterkey Property Management
Robert Dell’Osso has been involved in real estate and property management for most of his life. Having grown up in the industry, he sees both sides from an owner perspective and a property manager prospective. Robert founded MasterKey Property Management in 2015 and has since grown the company successfully since then. He has resided in the Triangle since 2000 and has come to be a knowledgeable resource on all types of investment properties in the area. He has a North Carolina Real Estate Brokers License and is also the Broker In Charge of MasterKey Property Management.
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I am a proud nerd (as my beautiful wife and daughter have told me) investment and finance blogger, with a NC State, Chemical Engineering, University Rutgers, MBA and Harvard University, Advanced Management education.
I left a corporate career because I had a desire for making a difference as a speaker and writer, to help others. I was blessed to be coached and mentored by strong women and men in both my family and professional life. It is my time to serve and give back.
I started my first business at ~13 years of age (small but brilliantly created plant nursery). I am a successful investor in stocks, options, real estate and happy to share my personal finance and investment lessons learned with you.
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