High Rent City Exodus: Pivot Guide For Real Estate Investors

A common mistake most real estate investors make is that they get married to an asset class. Or a particular strategy. And never change when the market conditions change.

I know that real estate is one of the best passive income-producing assets to own on a risk-adjusted basis.

The pandemic has resulted in the acceleration of technology trends. More and more people continue to work from home.

Urban centers: Rent drops and outward migration

Some states are more tenant-friendly, and some are more landlord-friendly.

Eviction moratoriums: Federal and state government

The recent CDC moratorium on eviction meant that even landlord-friendly states were not immune.

Refinance

The Federal Reserve has been lowering interest rates. Today we have low real yields comparable to high inflation periods and yet; a stable core CPI and low inflation expectations.

Refinance any debt to lower interest costs. Although rates are not expected to rise, it might be better to lock any variable interest loans to the lower fixed-rate loans.

Have a meeting with your CPA to explore additional tax saving strategies. A lot has changed in the tax code with the passage of the Tax Cut and Jobs Act from Opportunity Zones to QBI deduction for rental property.

Out-of-state rentals

Investors who have assets in high rent urban centers should consider the changing market dynamics.

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