Make us your home page
Instagram

As foreclosures bear down, landlords still find way to profit

As the cretins swallowing centipedes and pig eyeballs on gross-out reality TV shows are apt to point out, don't try the following at home.

We're talking about a new type of landlord who's thriving, in his own sorry way, in the Tampa Bay area housing slump.

These guys cease making payments on their investment property. Maybe they can no longer afford the mortgage. Maybe they're sick of pumping bucks into a depreciating asset.

In any case, when the banks initiate foreclosure, these guys invoke every delaying tactic. And why not? They're collecting rent from their tenants, without compensating the bank, and don't want to derail the gravy train.

Even the landlords of yore had to kick a share of feudal rents up the ladder to the duke, king or archbishop. These guys get to hoard it all in their private chest.

Consider the Tampa Bay area landlord with five rental properties in foreclosure, each of which generates $1,200 a month in income. What incentive does the guy have for handing in the keys and calling it a day?

The bank's pursuing foreclosure, but in today's clogged courts it could take a year before the house is repossessed — longer if the landlord has hired a clever lawyer.

Our landlord takes in a combined $6,000 a month in rent. That's $72,000 a year. And he doesn't pitch a dime to the bank. Why bother? He's too far in the hole to make good on his debts to the lender anyway.

The foreclosure suits will likely end with ruination of the landlord's credit. But the process hasn't exactly been a financial catastrophe for our man. He's collected $72,000, discounted for tenant vacancies, with no expenses of his own save an occasional drain to unstop.

Not a bad little bumper to ease your passage through the lean years ahead.

If he bought the investment homes with 100 percent financing, all the better — he's got even less money in the game.

Is anything illegal in this deal? Probably not. But nobody ever said illegal operators brought down our banking system. The real scandal is what passes for legal.

James Thorner can be reached at jthorner@sptimes.com or (813) 226-3313.

As foreclosures bear down, landlords still find way to profit 04/23/09 [Last modified: Thursday, April 23, 2009 9:38pm]
Photo reprints | Article reprints

© 2017 Tampa Bay Times

    

Join the discussion: Click to view comments, add yours

Loading...
  1. Tampa Club president seeks assessment fee from members

    News

    TAMPA — The president of the Tampa Club said he asked members last month to pay an additional assessment fee to provide "additional revenue." However, Ron Licata said Friday that the downtown business group is not in a dire financial situation.

    Ron Licata, president of the Tampa Club in downtown Tampa. [Tampa Club]
  2. Under Republican health care bill, Florida must make up $7.5 billion

    Markets

    If a Senate bill called the Better Care Reconciliation Act of 2017 becomes law, Florida's government would need to make up about $7.5 billion to maintain its current health care system. The bill, which is one of the Republican Party's long-promised answers to the Affordable Care Act imposes a cap on funding per enrollee …

    Florida would need to cover $7.5 billion to keep its health care program under the Republican-proposed Better Care Reconciliation Act of 2017.  [Times file photo]
  3. Amid U.S. real estate buying binge by foreign investors, Florida remains first choice

    Real Estate

    Foreign investment in U.S. residential real estate recently skyrocketed to a new high with nearly half of all foreign sales happening in Florida, California and Texas.

    A National Association of Realtors annual survey found record volume and activity by foreign buyers of U.S. real estate. Florida had the highest foreign investment activity, followed by California and Texas. [National Association of Realtors]
  4. Trigaux: Tampa Bay health care leaders wary of getting too far ahead in disruptive times

    Business

    Are attempts to repeal Obamacare dead for the foreseeable future? Might the Affordable Care Act (ACA), now in dire limbo, be revived? Will Medicaid coverage for the most in need be gutted? Can Republicans now in charge of the White House, Senate and House ever agree to deliver a substitute health care plan that people …

    Natalia Ricabal of Lutz, 12 years old, joined other pediatric cancer patients in Washington in July to urge Congress to protect Medicaid coverage that helped patients like Ricabal fight cancer. She was diagnosed with Ewing's sarcoma in 2013 and has undergone extensive treatments at BayCare's St. Joseph's Children's Hospital in Tampa. [Courtesy of BayCare]
  5. The Iron Yard coding academy to close in St. Petersburg

    Business

    ST. PETERSBURG — The Iron Yard, a code-writing academy with a location in downtown St. Petersburg, will close for good this summer.

    Instructors (from left) Mark Dewey, Jason Perry, and Gavin Stark greet the audience at The Iron Yard, 260 1st Ave. S, in St. Petersburg during "Demo Day" Friday, Oct. 7, 2016, at The Iron Yard, which is an immersive code school that is part of a trend of trying to address the shortage of programmers.  The academy is closing this summer.  [LARA CERRI   |   Times]