Aren’t you in New York?
In New York City, but all of my investment properties are in Southern States and managed by property management companies that collect payments and take care of the day-to-day wear & tear issues.
I saw something on the news that said as many as 80% of the people in parts of NYC, including Manhattan, would default on their rent or mortgage this month. I think there is an expected exodus from the City to the suburbs of 7-10% this year. Home and rental prices in the suburbs should see a spike almost immediately.
The way we have done is as follows. We own 2 homes in NYC. One is a very humble/modest home in a beautiful suburbs area of NYC (in Queens). This is a home that was purchased in the late 90's and is fully paid off and has appreciated tremendously. We then own a condo in Tribeca that we have owned since circa 2009-2010 (right after the mortgage crisis when people were selling their homes for peanuts). We still have a mortgage on the condo, because it's just too damn expensive to pay off. We always keep about 6 months of living expenses saved away at the bank, call this our rainy day fund (covers principal, interest, taxes and insurance to our condo). We do this in case we hit the worst economic times of our lives (think 1928-1929 era). We also, as the market allows, have refinanced our mortgage a few times to slowly creep towards the interest rate we need to bleed less onto our mortgage and instead use any extra money towards other acquisitions and investments (properties, stock market, retirement funds, other ventures etc).
Once the people leave the City, but up the best of the empty properties and wait for the cycle to reverse itself in a few years.
We are not poor, but I wouldn't be so arrogant as to say we are rich. We are hard working people and need our jobs just like anyone else, in order to live well in NYC. Can we move to the South (Say Florida) and only have to keep up with monthly cost-of-living expenses (utilities for the house and food)? Of course, and that could be done with just returns on investments without ever having to work another day in our lives. But both my partner and I have too many ties to NYC (family, best friends, work, reputations at work etc), shit that in the grand scheme of things don't matter as much as we humans think it does, but it does help to define who and what we are to this world. Foolish in some ways, but it's the crazy shit that sometimes drives people.
What we won't do is invest in New York City real estate. We don't want to park our money in an expensive property with exuberant property taxes. Even once prices plummet, it won't be low enough to suggest that even a 10% down payment won't translate to 100's of thousands of dollars. We can't do it. We pick states that have lower costs of living, inexpensive price tags on properties with lower property taxes.
Anyhow, that's all I have to say.
"
1"
