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re: Should I cash out refinance my home, and use the money for an income property?
Posted on 5/14/20 at 7:00 am to AndyJ
Posted on 5/14/20 at 7:00 am to AndyJ
Yeah, you’re missing the part where people aren’t paying their rent right now. How would your plan look if you can’t collect rent on your rental for 3-6 months and at the same time you need to put a roof on it? In other words, what do things look like when Murphy and his law decides to give you an arse kicking?
Posted on 5/14/20 at 7:59 am to Dawgfanman
You’re right that this is not the right moment... but maybe in a year or so I’ll be able to see where things are
Posted on 5/14/20 at 8:51 am to Dawgfanman
quote:
Yeah, you’re missing the part where people aren’t paying their rent right now.
This surprisingly isn't really true. Collections have been surprisingly strong across the country.
With that being said, if you own a SFR rental, if your one tenant isn't able to pay rent you're hurting the same regardless of how "overall" collections are.
To OP, my prediction is that you'll see lower real estate values in the fall/winter of this year than we're seeing right now. Like I said, collections aren't down much despite high unemployment because of increased unemployment benefits and Trump bucks. The increased unemployment benefits end in July/August, at which point I think you'll start to see some "pain". There is a disconnect between buyers and sellers right now because buyers think there should be lower prices due to COVID and changes in financing requirements but sellers don't think prices should be lower since their property performance (rents, etc.) has remained fairly stable. The disconnect is probably not as significant in single family but it is still there. Buyers are not motivated to sell right now and accept that their property is worth less than it was in February. Once their property has been on the market for six months and we get to September, I expect they'll think differently.
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