I wanted to ask what some of you are doing to defend your real estate investments and ensure that you are stabilizing or continuing to grow your real estate income during the economic downturn:
Are you diversifying the type of real estate or the segment that you invest in?
Are you modifying or adding perks or benefits to close the deal or get or retain tenants?
Are you doing more creative deals using what may have once been considered creative financing?
What changes in strategy or new tactics are you undertaking to continue to remain profitable?
The biggest change I made after the real estate bubble burst was to insist on getting a bigger discount at purchase. During the bubble, I would pay up to 70% of the market value if the cash flow was at least $100 per unit per month. Post-bubble, I won’t pay more that 50% of the current market value. Obviously, a bigger cushion is needed in uncertain times.
Herman,
We are listening more to our customers, who are our tenants in our fully-furnished rental homes. We have given a 2-week notice period for move-out to two of our largest medical agency tenants. This is instead of 30-days notice.
We are jumping through hoops to keep our tenants happy, so they extend their work contracts and stay longer. This keeps their agencies happy. The agencies send us those big rent checks.
Yesterday we agreed to change out a tenant’s loveseat for a longer couch so she could lay down and watch TV better. And also her son could visit and have a place to sleep. She is extending her contract 8 more weeks.
TLC for the tenants equals more retention. If someone is paying the rent do everything you can to keep them happy.