On one end you have landlords that want to welcome a property crash so they can add more properties to their portfolios. A declining market for an ambitious landlord is like a moist armpit for bacteria- tranquil beauty. We can call those landlords the fat cats. On the other end you have another breed of landlords that are content with the one or two properties they currently have, and see no real reason to embrace a crash.
The fat cats are greedy (and rich), so fuck them. But the humble landlords that want the simple life, such as moi, may suffer if a housing crash occurs, especially if they have decent tenants. I’m not really worried about a loss in equity as a consequence of a crash because my game plan is to taste the fruits 20years from now. I’m in property investment for the longterm, so a crash wouldn’t really hinder my plan of action. I’m not saying that a housing crash will occur, but it is a hot topic right now, so I’ve been thinking about what my situation would be “if shit happens”.
I feel like I’m in a strong position right now because I have built up equity in my properties (due to a generous market), I have nice properties in good locations and most importantly, I have excellent tenants. What makes my tenants awesome?
- They pay their bills
- They don’t give me unnecessary shit E.g request for every little thing to be fixed
- They have personality
- They’re clean
- They send me Christmas cards (and vice versa)
- They ask me before making any changes to the property
Now, why would I want to lose tenants like that? Good tenants are rare, but awesome tenants are one in a million, trust me on that. A good tenant will pay the bills, but an awesome tenant will treat your property like a home. The fact is, if house prices drop significantly, my tenants maybe put into a situation where they can consider to get their foot on the property ladder. If that happens, i’ll have to go through the agonising pain of finding new suitable tenants, and that’s not even in the similar realms of finding a four leafed clover, it’s more on the same par as diamonds falling out of my asshole. Unfortunately, the consequences of a property crash goes beyond equity loss. A landlord is also exposed to losing something equally as precious…
Am I being selfish and inconsiderate to the rest of the population that can’t afford to get onto the ladder? Perhaps. But I like my tenants and I want to keep them. Sue me? Granted, i can’t keep my tenants forever and they’ll eventually move out regardless of a crash, but that doesn’t mean I want additional incentives to crop up for my tenants to ship out…
Anyone else in a similar position?
I think a lot of landlords underestimate the value of good tenants. Good tenants should be precious to a landlord, just as food should be precious to a chef. Granted, there are a lot of shitty landlords out there that only care about one thing- the paper…
But don’t worry, those parasites will be reborn in their next life as a toilet brush cleaner. Good landlords will appreciate the value in good tenants and that’s why they’ll be slightly concerned about losing their precious cargo “if shit happens”
If you’re a shit landlord with good tenants and you know it, perhaps it’s time to make a change…Be Good To Your Tenant. Don’t be a victim of, “you don’t know what you got ’til it’s gone…”
Disclaimer: I'm just a simple landlord blogger; I'm not qualified to give legal or financial advice. Any information I share is my opinion based on my personal experiences as an active landlord, and should never be contrued as legal or professional advice. For more information, please read my full disclaimer.