Guest Post: The Crowded Trade: Buy-To-Rent Housing

Tyler Durden's picture

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

Demographically, it appears there is a generational glut of single-family suburban homes on the horizon.

A trade is officially deemed "crowded" when everyone is rushing into the market with eyes only on the upside and little concern for the downside--for example, buying homes as rentals. Here's a typical headline:
Any market that gets crowded quickly experiences a corresponding rise in price and risk. Rational minds then start looking at the potential downside--for example:
Why could the buy-to-rent housing party be running out of air? The basic reason is the difference between buying real estate as rental housing, which is a speculative market, and the rental property market itself, which is grounded in real-world supply and demand.
Simply put, if the supply of rental housing exceeds demand, rents (the cost of renting shelter) decline. That jeopardizes the fat returns the speculative buyer was counting on: Is There a Rental Supply Glut? (The Big Picture)

A key piece of the story is being left out of all the sell side research and financial press “housing recovery” stories. In the case of Phoenix — and most likely most other heavily distressed regions turned ‘investor havens’ throughout the nation — it looks like the missing piece of the story is the lackluster demand for the mega-supply and nowhere remotely close to the rental returns investors had hoped for unless you bought the right property in a relatively small window that slammed shut in early 2012.I have also believed for a long time that the lack of foreclosures — and the mortgage modification/workout bubble — would ultimately be a killer for those hoping to rent houses to distressed borrowers. Of course, that’s because the banks and gov’t let all these potential borrowers rent their own houses from them at 2% interest only for 5 years. And this is exactly how it’s playing out.

This is only one dynamic of many in the buy-to-rent stampede. Let's quickly review the other main dynamics.
1. Housing is clearly experiencing an echo bubble. No wonder, given the Federal agency and Federal Reserve subsidies: 3% down payments, super-low interest rates and a dearth of other investment opportunities:
2. The Federal Housing agencies are openly transferring ownership of what are quasi-public assets (defaulted private homes owned by Fannie Mae) to the usual financier predators and parasites: private equity funds, hedge funds, investment funds organized by investment banks, etc.
Structured Sales Transactions (i.e. the bundling and transfer of Fannie Mae owned properties to private capital)
In their desperate search for higher yields, these concentrations of private capital are buying thousands of houses and placing them in sprawling portfolios of rentals:
3. The demand for rentals ultimately depends on jobs, income and demographics.Demand for rental housing depends on household formation rates: people moving out of their parents' homes or the dorms creates demand for rentals. But they need jobs that pay enough to support the often-hefty rent for an apartment or house.
I have reprinted this chart from Doug Short many times because the foundation of the real-world economy is real wages, and an 8% decline in real wages does not reflect an economy with strong household formation:
As a percentage of the workforce, the number of fulltime employees is at multi-decade lows. Yes, it's possible for three or four part-time workers to rent a house together, but how much demand does this doubling-up create?
4. The basic premise of buy-to-rent--that people who lost their homes in foreclosure will need to rent a house--may be overstated. The number of homes in foreclosure--currently 1.5 million, according to RealtyTrac--may sound big, but compared to the entire U.S. housing market, it is marginal.
There are about 75 million owner-occupied homes, roughly 25 million owned free-and-clear (no mortgage); 130 million dwellings, of which around 111 million are occupied and 19 million are vacant. Of these, perhaps 4.5 million are second homes or vacation rentals. What We Know (and Don't Want to Know) About Housing (June 16, 2010)
How many households leave their foreclosed home and move into a converted garage, the family home, or an apartment? There are no reliable statistics (that I can locate), but if the Phoenix market described above is typical, the demand for rental homes may be more a figment of echo-bubble imagination than reality, at least in typical markets. (New York City and San Francisco are not typical.)
5. Demographics do not support robust household formation. Older folks are jettisoning the family home and moving into retirement communities, often in cities that offer amenities and nearby healthcare. If anything, it appears there is a generational glut of single-family suburban homes on the horizon: Housing and demographics (Acting Man blog).
6. A house is not a financial instrument: it is a real object in the real world, and it falls apart without constant maintenance and attention. The tenants are real, too, and they don't just spin off a 6% yield like a machine. They make demands for repairs, they get behind in the rent, they move out and create a vacancy, and so on. Real life has a very strong tendency to erode profit margins and net income in unexpected ways.
Crowded trades are often described as boats with everyone on one side. Boats loaded in this fashion tend to capsize once exposed to the slightest volatility (wave action). A crowded room is also a common analogy for a crowded trade: once the herd realizes the trade is no longer a guaranteed winner, the herd rushes for the exits, dumping their assets onto the market. This sudden rise in supply (inventory) causes prices to plummet.
The buy-to-rent boat is looking rather overloaded, and the bullish side's gunwales are only a few inches above the water.

A MARKET CLEARING EVENT: The Global End Game - Part II: CHS and Gordon T. Long discuss the cycle of deflation and the endgame of leverage, credit and phantom collateral:

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Mr. Fix's picture

This is not a good time to buy a house,  your cash will be taken away by the banks, and your house will be taken away in a tax sale.

 This is a good time to  stack, there will not be any more sales like this.

redpill's picture

I agree with you, but if you are absolutely determined to buy a house at some point, you might as well do it while the money is free.  That's the unfortunate reality when central bankers turn value of everything on its head.

New England Patriot's picture

I bought a rental property in 2009 with the help of an FHA loan.


My life as the landlord of a four-family has been wrought with ups and downs. Lots of lessons learned; good life experience.


I will say that this past year was dreadful, as no fewer than three out of four of the units lost income and were unable to pay. To top it off, they were deadbeats, content to live on my dime until such time as they were evicted. And they were evicted, months and thousands of dollars in opportunity and legal costs later.


I have since targeted subsidized tenants, because the government will kindly deposit a check in your bank account each month. The day that Uncle Sam becomes a deadbeat, I figure my other "physical investments" will rotate into their "growth phase." 


Open question:


What will happen to rental assets in the run-up to open inflation and thereafter?

redpill's picture

Theoretically inflation would push rents up, but it doesn't really matter if no one can afford them.  Plus, by that time these fucking fascists will probably have imposed nationwide rent controls.  Whee!

New England Patriot's picture

I have always envisioned selling the property at the point where inflation has raised the price in reserve notes, but before the dollar plummets to worthlessness. 


It may very well be rearranging deck chairs at that point.

MagicHandPuppet's picture

What will happen to rental assets in the run-up to open inflation and thereafter?

Governments try to "fix" the problem by price fixing (and rent fixing).  One of the books I read on Weimar Germany hyperinflation (I forgot which one at the moment but I think it was "Monetary Regimes and Inflation") went into great detail about how the government fixed rents, etc., while jacking up property taxes.  Just imagine what the populist outcry will be.  They will do anything to kick the can down the road.

I no longer trust a significant portion of my capital in real estate and am trying to unload my last rental now.

MagicHandPuppet's picture

One thing I forgot to mention: Those people with mortgages did win at first as the mortgage debt was inflated away.  However, the government later imposed new winfall taxes that severely punished many of those who benefited by their debts being inflated away.  When adding this to the severe property taxes that came along, the profits of many were temporary after the politicians were done sticking it to a lot of the "winners".

Bunga Bunga's picture

+ soaring costs, that will never be covered by rents (no matter if paid or not). That's the perfect storm for landlords. During the Weimar hyperinflation many landlords went bankrupt, when they thought, they could own rental properties literally for free.

LawsofPhysics's picture

Higher rents can only be supported with higher wages.  So everyone gets a raise or housing crashes again.  What would you bet on?

smlbizman's picture

i have been a landlord and property manager of a few major much more.... but on the landlord side very few individuals  are capable of managing people and property....they dont know how to qualify, or rule enforcement, or aggressive rent collection (you help no one buy letting them pay late)but you need to be compassionate when dealing with customers but very firm....they underestimate the  cost when rentals "get real" (chapple)....all profits if any wiped out by one bad if anybody thinks they are just going to buy a home and rent really need to understand what you are getting into...i dont understand bitcoin i dont play....

duo's picture

I thought those Section 8 people always paid on time.

localsavage's picture

They just turned my friends rental into a meth lab.  You couldn't stay in there for 2 minutes without feeling sick.  Totally fucked and no recourse as the deposits are shit and the people are mainly broke.

smlbizman's picture

the sec. 8 lease is hysterical.......its very firm in drug use as an immediate disqualifier.....but alcohol and abuse is tolerable....but the beauty of the section 8 lease is, you  use it as the bad cop......always collect your rents in person...inspect ur premises at this time also......shoe up ass at this time too,....than ask how the family is and go to the bank....

cornflakesdisease's picture

I do remodeling with my brother.  What we see are a large number of people keeping what they got and fixing it up.  They are not trading up.  We also do many rental make-readys.  Just repaired a $400,000 property in the hot houston market.  Former tenenat didn't pay rent for 3 months and tore the place up.  This is the fourth tenenat in 2 years and I'm sick of repainting the place each time they leave (though I don't mind the money).  I pity the owner because after taxes and repairs, I doubt if he makes enough to take the grandkids to disney world.

robobbob's picture

heads up there and read your fine print.

depending which program you're working with, many direct pay contracts from uncle sugar contain a clause that stipulates that GOVERNMENT DEFAULT ON PAYMENTS does NOT CONSTITUTE grounds for a failure to pay eviction!!!! which means you get to play unpaid babysitter for the duration of the event. lets see if your mortgage holder will accept that excuse.

you have been warned. let they landlord beware.

New World Chaos's picture

Kudos for this.  I figured they would just pay in clownbux (see below) but why bother when Kafkaesque gotchas are even more profitable.  This is what passes for rule of law these days.  Landlords will be unpaid babysitters.  Maybe it will be karma from being an accessory to Section 8 robbery of the taxpayers but it will still be rotten.

daveO's picture

This should tell everyone where this will end. A trap is being set! Landlords(suckers) will be stuck w/ Section 8 deadbeats and no recourse. I can see another gov. program to buy these deadbeat properties off of the 'suckers' for cents on the dollar. That way the gov. gets cheap housing for their 'deadbeat class' voters.  

New World Chaos's picture

Ouch, sorry to hear about it... forgot what a nightmare the US legal system can be regarding renting (or squatting, as is often the case these days).  Don't expect Uncle Scam to adjust subsidized rent for real inflation when the time comes.  They will probably institute rent controls with piddling increases based on made up BLS statistics.  They will need producers like you to babysit the Obamaphone crowd for as long as possible.  Don't sign any long term contracts either.

You'll get better at picking tenants.  My first crew was a bad joke but luckily it is much easier to kick them out in NZ, plus everyone is on a weekly cycle here so deadbeats get found out that much quicker.  Still have dramas though.  Last month we kicked out a girlfriend-beater with a habit of narcing on people over stupid bullshit and burning cars over slights real or imagined.  Knives were pulled, a tranny showed up to threaten us with a pipe, nothing came of it. 

Might as well re-spam my housing manifesto because it has been a year.  Don't buy a suburban house for anything other than fix-and-flip.  Self-sufficient, defensible homesteads in the rural West can work, but consider the following:

Housing won't recover until rule of law is restored.  MERS, fraudclosure, and clouded title will be with us until the whole system burns.  All these things are part of an Illuminati plot to ensure that all of America's honestly earned wealth is consumed by various bottom-feeders.  This is designed to tip the national psyche further towards parasitism and sociopathy, which are more manageable.  Any non-rural house will also be a big fat target for legions of starving bureaucrats and zombies.  This is part of the plan too.

Advantages to renting:

  • No worries about fraudclosure, clouded title, etc.
  • When starving bureaucrats jack up all the taxes and municipal fees until they are more than the mortgage, you can move (or live in a car).
  • You won't be a sitting target for zombies or roving gangs of unpaid cops looking for forfeiture plunder.
  • No house for Feds, lawyers, banksters, or greedy exes to steal.
  • You can arrange to have your mail delivered elsewhere, increasing your chances of escaping the first big FEMA roundup (make sure your cellphone never leaves a trail to the place that you sleep.  Keep the battery out too).
  • You can be gone in 60 seconds and never look back.
  • No worries about desperate tenants strip-mining the place for copper and suing you when they electrocute themselves.  The system rewards such bottom feeders.
  • No worries about the Terrorist Blogger Asset Rehypothecation Act of 2013.
  • No worries about the Terrorist Gardener Re-Education through Labor Act of 2014.
  • No worries about a housing flash crash when the bond market implodes.
  • No worries about ending up with a nice place on the wrong side of the DMZ.  Location, location, location.

Possible advantages to owning:

  • You might be able to get a house with a 30-year fixed mortgage and very little money down, you might be able to pay back the mortgage after the dollar becomes worthless but before they switch all the contracts to a new (supposedly gold-backed) currency, the pig-men might decide to let you keep your house, rule of law might eventually be re-established, and the title might be clear when you sell.
  • David Wilcock's alien buddies might enforce a global debt jubilee.

Now, if you still want to catch the falling knife, consider this:

The bond crash, riots, and subsequent crackdown will destroy the mortgage market and also awaken a large number of people to just how screwed the system is.  Housing will crash again.  Then it will behave like the Zimbabwe stock market.

In a functional society, I am guessing housing is undervalued at 10x rent or 3x mean income.  You may pick it up for less during a collapse.  Interesting anecdote: A Zimbabwean says it was at 17x rent during their collapse.  This was due to a very strong system of protecting title (except for white farmers), houses becoming the main vehicle for savings, real rents collapsing due to people moving in with family, and the government forbidding local councils from raising their fees (they shut down).  I suspect it won't work out so well for America. 

Make sure not to buy in an area that will wither due to peak oil, lack of local water, poisoned frackwater, gangs, or a despotic local warlord/city council.  Sheriff Joe Arpaio will have his very own gulag utopia.

smlbizman's picture

i evicted a family when i caught their 8yr old red handed trying to set a home on fire with pipe cleaner and ..alky...crazy grandmother raising.....hauled away in a police car handcuffed.........this one  made my mother stop talking to me , this woman was late evry month..... meetings trying to help this person understand her position and provide some guidance, cause she didnt make as much as her bills.....i finally evicted sons kindergarten teacher, and a long standing woman in the church.....she was just to stupid to grasp it...every meeting .."as soon as i get out of this hole"....your hole is bigger than your dirt can fill.....

JR's picture

Wealth transfer is the policy; take the money from the middle class and give it to the Democrat voter. The crime in all this is that the minority party – the Republican Party - helps with it. It’s hard to understand except, I guess, for personal bribery and, maybe, threats to their families. I don’t know.  But I think a lot of them run for Congress just to get paid the bribes. And most of them don’t want to retire until they die…  because it’s so lucrative.

I heard on the car radio this morning that one of the top ten love songs of all time, when people are asked their favorites, seems to be "He Stopped Loving Her Today." When I heard George Jones wailing it away on his guitar, I thought of Congress:

He stopped loving her today,
They placed a wreath upon his door.
And soon they'll carry him away,
He stopped loving her today.

Lord Koos's picture

If you think that there are not millions of Republican voters who recieve welfare and food stamps you sir are seriously deluded..

JR's picture

Actually, the word is not “deluded,” it’s delusioned. The Republican Party is a minority party because its corrupted leaders do not represent a growing sentiment in this country that big government with a  declining private sector is headed in the wrong direction. And normal, would-be Republican voters are delusioned with their so-called "representatives."

As far as the wealth transfer to Democrat voters, fortunately it has ceased to be an argumentative equation as the results of the November election convinced every single skeptic that the Democrat Party is the party of government, non-producers, illegal immigrants, Asians, blacks, Latinos, homosexuals, abortionists, feminists, and liberals -- in short, a Hollywood-culture welfare state and those that feed off of it.

To suggest that because some Republicans get welfare is a valid rejection of the wealth transfer argument is to ignore the results of the November election and what has happened to this once great country.

It is no secret that immigration-driven demographic-change elected Obama. In the 2012 election,  Blacks voted 93% for Obama; Asians voted 73% for Obama; Latinos voted 71% for Obama; and Jews voted 69% for Obama. Romney carried 59% of the White vote.

“Eleven states now have more residents dependent on the government than they have people with jobs in the private sector.” These are:

Ohio, Hawaii, Illinois, Kentucky, South Carolina, New York, Maine, Alabama, California, Mississippi and New Mexico.

“Last month, the Senate Budget Committee reported that in 2011, between food stamps, housing, child care, Medicaid and other benefits, the average U.S. household below the poverty line received $168 a day in government support. To put this into perspective, the median household income in America is just mover $50,000, which averages out to $137.13 a day.

“Welfare now pays the equivalent of $30 an hour for a 40-hour week, while the average job pays $25 an hour,” or $21 after taxes, which welfare receivers do not pay.

And, yes, it does turn out that welfare largesse elects presidents. Of those welfare-dominant states…  

Obama won Ohio, Hawaii, Illinois, New York, Maine, California and New Mexico.

Mitt Romney was victorious in Kentucky, South Carolina, Alabama and Mississippi.

If the electoral votes of those welfare states were switched, Romney would be president with a total of 309 electoral votes and Obama with 197.

Out of Obama’s 332 electoral votes, those states represented 135 votes. Out of Romney’s 206 electoral votes, the 4 of those states that he won represented 32 electoral votes.

It's money for votes; you get people to vote for you and then you pay them. And if it turns out they need money, i.e., jobless, illegal immigrant, already on welfare, it's easier to buy their vote. And if it doesn't add up to enough votes to buy the election, you always can open the borders wider and sue states who try to protect theirs.

And it's Obama, the Democrat Party, that has posters in all 50 MExican consultate offices offering free food stamps to  Mexicans, gratis the American taxpayer.

Lord Koos's picture

"...all of America's honestly earned wealth is consumed by various bottom-feeders."  


Really? I don't think so -- follow the money, fool.  It isn't the poor that are getting all your money, it's the rich that are getting richer. `

New World Chaos's picture

I consider lawyers, bankers, politicians, and corporate welfare queens to be bottom feeders too.  And yes, the poor eat up chump change compared to them.  Should have clarified:  "Bottom feeders at all levels of society", or maybe just "parasites".

pitz's picture

Strong inflation *kills* the mortgage market, which eventually crashes the pricing of houses relative to salaries, etc. 

In a hyperinflationary scenario, real estate essentially becomes near worthless.

Lord Koos's picture

So, you are now also making a living off the gummint.  I hd a close friend who had several rental properties in New Orleans, he would only rent to section 8 moms.  He did quite well with it.

Freddie's picture

OMG - that is my boat sinking with my gold, guns and beans.  It was a tragic day.

redpill's picture

At some poing the investor cycle will be self-concluding, and the question will be whether traditional housing demand has strengthened in time to fill that gaping maw.  My guess is no.

ziggy59's picture

True, a snake that engulfs its own tail, goes bye bye ...

ebworthen's picture

And when the family you are renting to loses their job and can't pay the rent, wait and see how long it takes to get them out.


redpill's picture

Yep you'll have squatters and it will take 6+ mos to get them out of there, but think about what ZIRP has done to the world of capital to begin with.  So the investor's money is then stuck in the house, not generating income.  That's not much different than if it were stuck in the bank, not generating income.  Yes you'll have to continue paying property taxes and maintenance, but you also have a massive tax write-off in the meantime from lost rent.  And the Fed and feds will continue to do everything they can to continue to inflate the housing prices.  It's a groteque thing, but that is how it pencils today.  Sustainable?  Of course not.  But nothing is anymore.

insanelysane's picture

The loop hole here on that is that if you have them pay rent weekly, you can evict them after 6 pay cycles which is 6 weeks instead of 6 months.  I still stay away from this as renters just abuse the apartment or house.

redpill's picture

Security deposit covers paint and carpet and then you get the next loser in there to start the cycle again.  I see people making money doing it, but it just doesn't look appealing.  Add to that the clueless people who know nothing about it and run in to buy whatever house they can find and it's a recipe for more problems.  But don't worry, Obama is pushing the big banks to give more loans to people with shitty credit!  What could go wrong?

Vashta Nerada's picture

Just how screwed up is it that the Keynesians in the government are pushing lenders to increase subprime lending? 

daveO's picture

It has something to do with the cities going broke. They can't keep up their 'Projects', so the gov. is trying to con smaller landlords to take on their crap. In the last few years, I've noticed northern welfare types moving into my area, in NC. I know they're not living in a gov. subsidised high-rise, so that only leaves smaller landlords(suckers) to rent to them. It also serves their purpose of rigging elections, down the road.

JR's picture

Good stuff, redpill.

And the IRS, not to open the exit door in their tax trap too wide, made sure the amount you can deduct in passive rental losses will decrease for every dollar your modified adjusted gross income is above $100,000. You will not be able to deduct any passive activity loss once your income reaches $150,000. (We don't want those "rich'uns" earning $150,000 competing with the Goldman boys' 60 million dollar incomes now do we?)

However, If you have passive losses from some rental properties but others throw off passive income, you can deduct losses up to the amount of income.

Any losses you can't claim are carried over to future years and allowed as a deduction against passive income, including gain on the sale of the property. If your income were to go below the thresholds, then you would also be able to claim the losses, including those carried over.

 A good article that explains the IRS maze on rental income, losses and deductions such as the "small landlord exception" is “Beat the Restrictions on Rental Real Estate Tax Losses…but don’t get your hopes up too high.

MachoMan's picture

This is why you have to partner with a lawyer on your real estate venture...  one guy handles repairs and maintenance, the other guy handles leasing, payments, and evictions... 

And it depends on your jurisdiction regarding how long an eviction will take.  Here, it is very landlord friendly, and I can get someone the fuck out in less than 2 weeks sometimes...  just depends on how much money they have and whether they can lawyer up.  If not, the sheriff will be along shortly to inventory their belongings, issue the writ of possession, and escort them off the property.  The biggest issue is service...  which requires notice of a demand to vacate...  and then a couple days later requires service of a summons.  You can get them the first time around, but the second service is sometimes a bitch...  you'll get the dip and then the chase is on. 

Osmium's picture

Not to mention the family that is renting the property does not give a shit and complely trashes the house. 

redpill's picture

You can help prevent that by requiring a substantial security deposit up front.

Bunga Bunga's picture

... which Ben makes worthless in no time....

Temporalist's picture


No joke but I was witness to someone having to pay the tenant to leave...

New England Patriot's picture

Been there done that. 


When confronted by the prospect of hiring a moving van and getting their asses out... or taking them to court, and then paying a bonded moving company 1.5X market rates to move them out by force, taking a $1,000.00 hit early on can look mighty enticing when compared with the alternative. 

Stoploss's picture

Apparently it really does take a rocket scientist to figure out if there is no job creation, there is no money to pay rent. The tax sale bubble is already bursting, plus there is so much fraud in it from every entity involved, you can't get a clean title to save your life.

These fools think they have clean titles, and a lot of them have paid a shitload to have them "cleaned".

It's all bullshit, there is no such thing as clearing/cleaning a property title.  You only get good title on a legacy property that has never been tax delinquent. Ever..

If you think the buying bubble is bad, wait until the title bubble pops, when you can't put a finger on the true property owner!

ziggy59's picture

Doesnt Linda Green own all titles?

Stoploss's picture

Why yes, yes she does.

Now you know where the "housing recovery" is coming from..  Tax sales, why do you think they still come get your trash every week?

Tax sales go to the general fund of the counties, which is tied straight to the city/county payrolls.

That is how close reality is..

toady's picture

My wife had her name legally changed to Linda Green.

Groundhog Day's picture

The 99%'s wants to downsize or look for a cheaper place.  With all the supply even the PE firms will realize quickly that it is a medicore investment at best and will probably try to be rid of the Securitized product off to some muppet...i mean pension investor

cornflakesdisease's picture

You buy one month by saying you will have the money in two weeks, then another month by saying I don't have it, and then the final month waiting on the sheriff.  See it all the time in my business.  In Houston half the people rent and half of them don't pay.

pursueliberty's picture

I can get them out within 14 days of late rent here in arkansas.  In five years with five residential properties I'm out less than one month rent.  One punch hole in a wall, one in a door, otherwise no problems.  It depends a lot on how your county views landlords.  Here we have an agressive judge who doesn't play around with dead beat tenants and the sherriff office will let you put the stuff on the curb on day 15.  Renters know this or have a personal friend who does so they don't mess around and get out 95% of the time.  A good friend of mine has around 50 single family homes and never has  a problem getting them out.  His biggest problem is he won't let them sit empty until a good renter comes along and charges as much as the market will allow.


It isn't about evicting anyway, it is about picking a proper tenant with stable income/work history.  Last year I let one sit for rent for 6 weeks to find a great tenant.  I have a list a mile long of disqualifiers.  Stick to it and you come out okay.  I also avoid high turnovers by charging slightly under going rate. 


A much bigger part of the equation is being handy, having a bitching set of tools, and a stack of frn for repairs.  Stuff breaks.  I spent several thousand last year on HVAC between two properties.  Good thing is one has a new unit with ten year parts warranty/five on labor.  I'm still a buyer but only of 3/2 properties and am working on plans for a fourplex of 2/1.