Commercial Real Estate Pro Network

J. Darrin Gross

I'd like to ask you, Tom Cruz, What is the BIGGEST RISK?

Tom Cruz  

I would say the biggest risk in not even section eight housing, but just investment house air rental properties is going to be the tenant selection, because if you think about it, buying the property is very low risk, you can always refinance it, you can always sell it, you can always rent it, you'll always have that demand there, especially if you're buying affordable housing under 100. Grand right. But with a tenant, depending on where you're buying, the risk can be can be huge. I mean, if you're buying in the Northeast, and you put a wrong tenant in there, you could be waiting months to get the tenant out. Obviously, if you're buying in North Carolina, in the southeast, it's a lot more landlord friendly laws. So we can get a tenant out for 150 bucks in three weeks, and they're out by the sheriff. So and also you have the tenant the the damages from the tenant. So if you don't screen the tenant properly, or if you're lazy on that part, me, it could cost you 1000s of dollars, a lot of which, you know, you're gonna be out of pocket for because your security deposit won't handle it, Section Eight is surely not going to come in and handle the damage that a tenant calls independently. So I would say the biggest risk in rental properties is putting the wrong tenant in your asset. Um, and the best way to mitigate that, like I said, is through screening.