biden tax changes impact on real estate investors

So… an hour after we broadcast, the Biden Administration reversed course and extended the eviction moratorium through October 3, 2021.

For full details, read the latest eviction moratorium news here.

Video Broadcast Version

Audio Podcast Version

Also available on iTunes, Stitcher, and wherever else you listen ๐Ÿ™‚

Resources Mentioned in This Podcast & Video:

live off rents podcast transcript

Brian Davis: Don’t want to work forever, once you can cover your living expenses with passive income, your day job becomes optional and you reach financial independence, you then have complete control over your time, your money, and your life in general. SparkRental founders Deni Supplee and Brian Davis, me are here to help you build rental income, ditch your day job, and do what matters most to you. So on that note, let’s jump into today’s episode, which, like all of our episodes, was recorded live.


Deni Supplee: Hi, everybody, and welcome to SparkRental’s Facebook Live and podcast, both Brian and I are on together!


Brian Davis: And it seems like the first time in a while.


Deni Supplee: It does, it’s been an interesting summer. Last week, Brian, you interviewed and Andy Kolodgie from the Houseguys, and that was a great interview. We’re getting feedback on that. And this week, with the lifting of the ban on evictions, we’re going to do an evictions post moratorium. What you landlords all need to know about this because it is going to cause a little upheaval. Let’s start with just a brief description on exactly what this eviction moratorium was.


Brian Davis: Sure, and as you guys join us, let us know where you’re tuning in from and let us know what your questions are. This is an interactive broadcast, unlike your typical podcast series. So the federal eviction moratorium started back in spring 2020 with the Cares Act. And then that actually expired last summer, and then the CDC went in and created their own moratorium that was more extensive. That was originally scheduled to expire at the end of last year and of 2020. And then it kept getting pushed back and pushed back and pushed back.


Deni Supplee: Which is crazy and it’s stuff that the CDC would even get involved in this, to begin with.


Brian Davis: Right, A lot of people felt that it was an overstep of their boundaries and their mission. It was a pretty comprehensive nationwide eviction ban. There was an income cap for tenants, but it was pretty high. Tenants could single tenants could earn as much as ninety-nine thousand dollars. Married tenants could earn as much as one hundred ninety-eight thousand dollars for their adjusted gross income for the previous year and still fall under this ban and not be allowed to be evicted. And the rules for qualifying were pretty easy, things like having to experience a, quote, substantial loss of household income. But the documentation required was not very extensive. So most tenants fell under this eviction moratorium. That was nationwide. Now, with this nationwide moratorium ending as of July 31st, a couple of days ago, there are still some states that impose their own eviction moratoriums or moratorium. I’m not sure what the proper plural of that word is. A lot of them have kind of quirky rules. Some of them are simple and straightforward, but a lot of them, it’s not really clear whether you can evict and landlords in some cases, they can technically file for eviction, but they have to jump through a bunch of hoops in order to do it. So, for example, in four states in Massachusetts, Nevada, New York, and Oregon, landlords can’t file to evict tenants if those tenants have a pending application for rental assistance,


Deni Supplee: With that being said, there is a backlog of these applications. So technically, these tenants or the landlords are kind of stuck until they catch up which who knows when that’ll be.


Brian Davis: Precisely. So the federal government, surprise, surprise, has done a terrible job rolling out the money that is earmarked for rental assistance. Then, of course, states have bungled it to various degrees as well. So there’s money that has been set aside for rental assistance and has rolled out, but most tenants and landlords don’t actually have access to it because the process of applying for that has been delayed and in many cases been extremely confusing, both for tenants and for landlords. So, in these states where landlords can’t file for eviction, if there’s a pending application for rent assistance like you said, Deni, that could be months and months from now. It could be a year from now, depending on how slowly and inefficiently these governments roll out the benefits.


Deni Supplee: Julian, from D.C., is saying, and we were going to talk about that a little further on in the broadcast, but that evictions in DC against tenants for nonpayment have been extended through October 12th. And I’m going to be putting a link in the chat that will take you to more detailed information about each state and their standards and what they’re allowing and not allowing. But D.C., that’s a tough one.


Brian Davis: Know, this is very tenant-friendly, very tenant-friendly, so we’ll quickly walk through some of these states that still have eviction moratoriums in place since Julian pointed out D.C., we can start there. So there is a rule that landlords who had filed for eviction before the pandemic, but whose tenants were given a stay by the time of the nationwide moratorium, can file for eviction as early as August. Twenty-sixth. But of course, that’s not most landlords in D.C. with tenants who are behind on rent. So like Julian said, for most tenants, it’s October 12th is when they can start filing again. And D.C. did put a 60-day notice requirement in place for filing an eviction for nonpayment of rent. So very onerous on the landlord. Very restrictive, but not surprising at all for a very tenant from the jurisdiction. So Hawaii, their moratorium ends in just a couple of days. That ends on August 6th, assuming that it’s not extended in Maryland, right next to D.C. They have an eviction moratorium in place that ends on August 15th. Again, if it’s not extended, Maryland is also very tenant-friendly. My home state and I no longer invest there because of that. Illinois has an eviction moratorium in place that is scheduled to end on August 31st. New York has a moratorium that is also scheduled to end on August 31st. But they have some other quirky rules involved. And, you know, landlords have to you know, if tenants submit a hardship letter, then there are extra hoops for the landlord to jump through. California has an eviction moratorium in place through September 30th. New Jersey has a really long moratorium in place from the end of this year, through the end of 2021.


Deni Supplee: It’s not surprising at all.


Brian Davis: No, not surprising at all. New Jersey, very blue, very tenant-friendly, not a great place to be a landlord. And then there are a couple of states that have, you know, some more quirky rules about when landlords can file for eviction when they can’t. So, for example, Washington State right now are they are not allowing most evictions for rent that’s owed between April 2020 and June 2021. In Oregon. Again, we talked about how in Oregon, landlords can’t evict if tenants have a pending application for rental assistance, but there are some additional rules there. So landlords have to give tenants until the end of February 2022 to make up those rent payments that were owed from what they consider the height of the pandemic. That’s April 2020 to June 2021. So, you know, landlords are supposed to give tenants a what they say, reasonable rent payment plan option to make up those payments between now and the end of February.


Deni Supplee: And I love the use of the words reasonable.


Brian Davis: Right. Because that’s not a loaded or subjective term or anything. Then Connecticut has some quirky rules as well. Landlords can’t file for eviction unless or until the landlord has applied for federal rental assistance. So Connecticut set up a Web portal called Unite CT that landlords have to go through and they have to file themselves for federal rental assistance. It’s super quirky and it’s now a 30-day appeal process before you can file for eviction instead of a three-day appeal process. And so anyway, so Deni sent a link here in the comments to where we have some more details about these state-specific eviction moratoriums.


Deni Supplee: Kevin Thompson was saying that Ohio is proceeding with evictions, and he brings out a good point, certain larger cities are going to be more difficult than others. And I think it’s very important to know that not only do you have to check into your state’s regulations revolving around this, but also especially if you’re in a larger city. But any jurisdiction you want to make sure and check because they’re all going to pop out with their own individual, regulations around how to do this. He also goes on to say, it’s sad that in states like New Jersey and Connecticut, it wipes out the mom-and-pop landlords. And he’s right. And it’s more likely that the giant faceless corporation that owns thousands of units can even weather this.


Brian Davis: Yeah. So that’s one of the problems with anti-Landlord regulation. And I don’t want to take it to a political place, but this is largely a blue state phenomenon. The anti-landlord regulation, tenant-friendly regulation. One of the downsides of that is that it really puts mom and pop landlords and rental investors at a disadvantage to large corporate landlords that can, they have legal teams in place who can get them through all of the heavy regulation and red tape. But your average mom and pop landlords, you know, they’re not interested and really aren’t equipped to cut through all of this kind of regulation and red tape, nor do they have deep pockets to do it. Right. They don’t have deep enough pockets.


Brian Davis: Right. I mean, there are so many without rent, like a lot of landlords, have in the pandemic. And it’s really pressured a lot of unemployment benefits. That tenants have been receiving


Deni Supplee: We see it in a lot of our real estate groups that, I hear you can hear the stories, you can hear the sadness, you can hear the devastation of, I just wanted to start investing. And then something like this happens and it completely overwhelms them.


Brian Davis: I mean, this has been a recurring theme in the Deni you and I have talked about many times on the podcast and on the blog how we really encourage landlords to invest in more landlord-friendly jurisdictions. You know, a lot of new investors don’t consider that. They just look at things like cap rates, but they really should consider the local regulations both on the state and the city level before they invest and avoid areas that are extremely tenant-friendly. And Kevin goes on to say that no doubt contributing to the current housing shortage crisis, among other factors, of course, and it’s true. It’s absolutely true. You know, when you regulate the hell out of landlords, no one wants to invest in rental properties. Right. So Deni now what you know, what are the next steps here? Both on a macro scale and, for individual landlords.


Deni Supplee: Well, I mean, the Census Bureau survey estimates that there are about three point six million people at risk of eviction. So now, granted, some of these states are going to prevent some of that. So I guess there could be good and bad in that. But the courts are going to be completely overwhelmed. We already have a labor shortage out there. So they’re already hurting. So now we’re going to just throw an influx of court cases. And you’re going to have delays and all kinds of things, so just because the ban is lifted doesn’t mean we’re going to get these tenants out. It just means now we can file in court.


Brian Davis: So now we can start the process. And. Right. You should expect the process to be very long and longer than usual because of this backlog and the delays. And it also means that you should start now, serve that eviction notice on your renters now. And we do offer free eviction notices for each state, by the way, on our software Deni, if you have a second if you can put that link in the comments. But, yeah, we do offer free eviction notices. You can serve those on your tenants now to get the ball rolling and well assuming that your state or city allows you to do so. And once each one of those notices comes with a waiting period, so you have to wait out that period before you can then file in court, and then you’ll have another waiting period before the court schedules a hearing. And then assuming you win at the hearing, there will be more waiting for them to be able to schedule an actual put-out date. So on and on and on. It’s a lengthy process so start right now.


Deni Supplee: I wouldn’t hesitate if you’re in a state that allows it to charge, you know, just run, go for it. The other issue that is going to happen here is eventually there’s going to be a whole lot of people that are going to be evicted. So there’s going to be a whole lot of properties. This could happen on the market. And what do you think Brian that that’s going to do to the rents?


Brian Davis: Well, I can drive down rents if we do see a jump in vacancies, vacant rental housing, but, you know, I do think that this is going to take time to play out. And I don’t think we’re all of a sudden going to see it’s not like there’s going to be this wave of homelessness all of a sudden, you know, with that, within five days from now, you know, three-point six million people are going to be on the street and out of their homes and that there will be all this vacant inventory. It’s not going to play out like that. This will take place over the next year, maybe even longer as the courts work through this backlog, as various states and cities lift their moratoriums, as that rental assistance flows out. And by the way, that rental assistance is going to keep a lot of these people in their homes. So, yeah, this is going to play out over time. You’re not going to see a sudden jump in vacancies.


Deni Supplee: So at this point, I guess what we all need to really do is make sure again, and I can’t reiterate that enough, is to check your states and your locations to see exactly what the procedures are because the last thing you want is to start something like this and then it gets you either into hot water or it just takes more time for you to to get through it.


Brian Davis: Yeah. And there are some states that have fines built into the moratorium, executive orders, fines for landlords who breach the rules. I think it was Connecticut where it was. It was a one thousand dollars fine for the first offense and five thousand dollars for subsequent offenses. So these are quite serious fines. Don’t quote me on that being Connecticut, maybe in New York. But anyway, double-check the rules in your state. And you know, that may mean wading through some of the executive orders that have been released by your governor or your mayor. But we do have some information and some links on our site about this as well. Um, so double check your local and state rules, start the process if you can, you know, serve the eviction notice first and then file in court for a hearing if you don’t get that back rent, because you’re going to have delays and there is going to be a backlog. So the sooner that you can start this process with your wayward tenants, the better. And hopefully, you know, your tenants catch up the rent. You know, there is 47 billion dollars of federal rental assistance allocated for this, you know, and, you know, with a lot of tenants going back to work right now, you know, hopefully, they will be able to catch it up as well.


Deni Supplee: Right. What about a different approach to investing?


Brian Davis: Well, right, so, you know, for landlords with existing properties, you can once you get those tenants out, you can look into potentially changing your rental model and renting it as a short term rental on Airbnb if you don’t want to hassle with long term tenants anymore. I would certainly understand that for the landlords who have had to eat a year’s worth of lost rents in this process, you know, as far as buying new investments, you can always consider land investing, which is almost not regulated at all, which is one of what I love about it. So, yeah, I mean, you know, these are a couple of different models to consider. You can also do things like invest through crowdfunding for a more passive approach to it. And that’s something that, you know, we’re going to talk more about in the coming weeks. But, yeah, I mean, you look at your existing properties, and now is actually a good time to sell as well if you’re if you want to sell your property and just cash out. That’s something that Kevin mentions here. He says I know many mom and pop landlords in my area who just want to sell with these sky-high prices rather than continue being a landlord in the wake of this eviction moratorium and unpaid rents and just the major hassles and costs that a lot of mom and pop landlords have experienced over the last year and a half. So that’s an option as well. Sell out, sell out while you’re ahead, and then, you know, potentially switch your model of real estate investing moving forward. Or if you’re in an area with plenty of tourist traffic, you can switch it over to Airbnb, a short term rental model, or as Williamson always promotes, a midterm renting model like corporate rentals, where you’re running for like two or three or four months at a time. So, yeah, those are a few options to consider moving forward.


Deni Supplee: Well, I think, for now, that’s all we have on this subject. I have a feeling we’ll be talking about it again sooner rather than later.


Brian Davis: We will. And we’ll actually do so next week to two p.m. Eastern. Next Tuesday, we’re going to talk about a sister conversation to this one, and that’s about the foreclosure moratorium ending and some of the investment opportunities that might present for you as an investor. So that’s kind of a flip side of a similar coin here. So next Tuesday, join us for that and we’ll talk about the foreclosure ban lifting and what opportunities are available for you.


Deni Supplee: Absolutely. Well, thanks for joining us, and have a great Tuesday and we’ll see you on the flip side and we’ll see you next Tuesday.


Brian Davis: You guys have a great week. See you next Tuesday.


Brian Davis: Did you know we offer a free eight video course on how to reach financial independence with real estate? It’s super bendable with each video around 10 minutes long but packed with information. Visit Spark Rental, Dotcom, learn for instant access. And please don’t forget to write and review our podcast on iTunes, Stitcher, or wherever you listen. Thanks for joining us. And we will catch you on the flip side.

Keep Learning More, Keep Earning More!

What short-term fix-and-flip loan options are available nowadays?

How about long-term rental property loans?

We compare several buy-and-rehab lenders and several long-term landlord loans on LTV, interest rates, closing costs, income requirements and more.

Keep Learning More, Keep Earning More!

Ditch Your Day Job: How to Retire Early with Rental Income (Free 8-Video Course)

FREE Webinar: Open $250K in Credit Lines for Investing

On Wed. 3/23/22 at 2pm & 8pm EST, Deni & Brian are hosting Fund&Grow for a free webinar to show you how to open up to $250,000 in unsecured business credit lines for real estate investing.

Want to create passive income?


We’ll email a series of videos in our free course,

to help you start earning income from rentals.

Privacy Policy: Your info will never be shared or sold to a 3rd party. Even if Dr. Evil offers us 1 million dollars ๐Ÿ™‚

Free Mini-Course: Passive Income from 2-4 Unit Multifamilies

Free Mini-Course: Passive Income from 2-4 Unit Multifamilies


Ready to build passive income from small multifamily properties?

Over the next week, we'll email you a free series of videos, so enter your best email and let's get started!

You're in! Check your email to confirm, and you can email us directly at [email protected] with any questions :-)

Free Webinar: Earn 15-50% on Passive Real Estate Syndications

LIVE masterclass on Tues. 10/25 @ 8pm EST

Your seat is reserved! Check your email to confirm.

Ready to Build Passive Income?


We'll email you the "recipe," plus a free mini-course on passive income over the next week, so enter your best email!

P.S. We never share your email, ever.

It's on! Check your email to confirm.

Ready to Build Passive Income?

Ready to Build Passive Income?


We'll email you the course videos over the next week, so enter your best email!

You're in! Check your email to confirm.

Ditch Your Day Job: Free 8-Video Course


Our brand new course on how to reach financial independence and retire early (FIRE) with rental properties is open for one week from Oct. 23-30!

You're in! Check your email for the link, or click here for the 1st video!

Share This