285 - How Landlords Go Broke

Many say that inflation estimates are unreliable. This theory can be proven by simply watching just about any press conference involving Fed Chairman Jerome Powell as he struggles not to squirm when asked questions relating to inflation. The US Department of Labor recently reported a 4.2% increase in the annual consumer price index which means the cost of goods we purchase has increased by almost 5%. That's ninja super secret code for INFLATION A recent Wall Street Journal article mentioned that economists feel that during inflationary periods, real estate far outperforms the stock market since its a known fact that stock valuations often suffer as inflation increases (which may be why Washington is supporting Wall Street Denial). The problem is that far too many landlords are afraid to raise their rents because they feel they will lose a tenant if they do. When a tenant leaves it means rehab is needed between tenants and for cash-strapped landlords, this presents a real problem. The reality is that if you don't raise rents to outpace inflation, you will likely become a victim of inflation. Being a landlord is tough enough, so why make it harder on yourself? One strategy that's becoming popular is a change of use. This means changing the type of tenant you serve which most commonly means conversion from a long term to a short term tenancy. Opportunities to accomplish this exist in virtually every market across America. Some properties can be converted from commercial to residential if the market supports them. Previous warehouses, mills, and other such commercial assets are being converted to multi-family niche housing in many markets. Robert Kiyosaki teaches that there are three sides to every coin...Heads, Tails, and the edge...Learn to examine all sides. Are you an accredited investor interested in growing your nest egg? If so head on over to KeyWestCashflow.com/Call to schedule time with Michael Marino and I as we build our Key West Investment Syndicate.