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. For Gov. Rick Scott, 'fighting' could mean vetoing entire state budget

    State Roundup

    Every day, Gov. Rick Scott is getting a lot of advice.

    The last time a Florida governor vetoed the education portion of the state budget was in 1983. Gov. Bob Graham blasted fellow Democrats for their “willing acceptance of mediocrity.”
  2. Potential new laws further curb Floridians' right to government in the Sunshine

    State Roundup

    TALLAHASSEE — From temporarily shielding the identities of murder witnesses to permanently sealing millions of criminal and arrest records, state lawmakers did more this spring than they have in all but one of the past 22 years to chip away at Floridians' constitutional guarantees to access government records and …

    The Legislature passed 17 new exemptions to the Sunshine Law, according to a tally by the First Amendment Foundation.
  3. Data breach exposes 469 Social Security numbers, thousands of concealed weapons holders

    Corporate

    Social Security numbers for up to 469 people and information about thousands of concealed weapons holders were exposed in a data breach at Florida the Department of Agriculture and Consumer Services. The breach, which the agency believes happened about two weeks ago, occurred in an online payments system, spokesperson …

    Commissioner of Agriculture Adam Putnam on Monday that nearly 500 people may have had their Social Security numbers obtained in a data breach in his office.
[Times file photo]

  4. Trigaux: Can Duke Energy Florida's new chief grow a business when customers use less power?

    Energy

    Let's hope Harry Sideris has a bit of Harry Houdini in him.

    Duke Energy Florida president Harry Sideris laid out his prioriities for the power company ranging from improved customer service to the use of more large-scale solar farms to provide electricity. And he acknowledged a critical challenge: People are using less electricity these days. [SCOTT KEELER   |   Times]
  5. Citigroup agrees to pay nearly $100 million fine for Mexican subsidiary

    Banking

    NEW YORK — Citigroup has agreed to pay nearly $100 million to federal authorities to settle claims that a lack of internal controls and negligence in the bank's Mexican subsidiary may have allowed customers to commit money laundering.

    Citigroup has agreed to pay nearly $100 million to federal authorities to settle claims that a lack of internal controls and negligence in the bank's Mexican subsidiary may have allowed customers to commit money laundering. 
[Associated Press file photo]