Warning - Risks of Rental Demand Declining When Investing in Real Estate

There are risks associated with investing in real estate where rental demand declines resulting in lower rents and poor cash flow.

Show Notes

Warning - Risks of Rental Demand Declining When Investing in Real Estate

Risk, risk, risk... Life is full of risks.

To a limited degree, we get to choose which risks we voluntarily take on.

For example, if you choose to invest in real estate, you choose to take on some additional risks that you might not—directly—face if you opt to invest in something else with its own set of risks.

One risk when investing in real estate is the risk that the property you buy as a rental experiences a decline in rental demand, which often leads to a reduction in the rent you are getting.

What are some things we can do to eliminate or mitigate this risk in advance of seeing possible rental market demand declining, and what are some things we can do after demand softens?

That’s what James will cover in this mini-class.

In this class, James discusses:

• A George S Patton quote about fear, risks and making decisions.
• More/Less speculative returns and why cash flow is more speculative than most people believe
• Buying properties that have mass appeal
• Buying better quality properties
• Modifying Warren Buffett's quote: Buying wonderful properties at fair prices versus buying fair properties at wonderful prices.
• Two opposing thoughts: discount for protection or quality to avoid selling
• Lower rent, hold on and absorb lower income
• Reserves and cumulative negative cash flow
• Change use
• Improve cash flow
• Sell
• Give property back
• Refi and/or recast
• Bring in partner
• Plus much more...

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What is San Mateo Real Estate Investing & Real Estate Financial Planning™ Podcast?

Learn all about investing in real estate in San Mateo, California with a combination of real estate financial planning and modeling with numbers specific to San Mateo plus syndicated, more generalized recordings of live and pre-recorded real estate investing classes (not all specific to San Mateo).