In this episode, Jason Hartman is the interviewee, as he talks to Casey Weade about pandemic investing. They discuss the right time to invest, the rise of suburbia, and how this pandemic will affect travel and short-term rentals.
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Announcer 0:12
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Casey Weade 0:28
Jason, welcome to the podcast.
Jason Hartman 0:31
Thanks, Casey, great to be here.
Casey Weade 0:33
Well, it’s awesome to have our first real estate expert here on the show, among many other things that you do. And I’m really looking forward to diving into not just what’s going on with real estate and how it pertains to retirement, but also what’s going on right now. I’m interviewing you right now at the beginning of April 2020s. So there’s a lot going on out there are a lot going on out there and Coronavirus, and I see you’re practicing little social distancing yourself? Oh, yeah, absolutely.
Jason Hartman 1:00
It’s, this is a good time to be a loner with OCD. I hate to say that, but it’s, it’s a really crazy time in history, I never thought I’d lived through anything like this, you probably did, neither probably nobody in your audience did, unless they were alive in you know, 1918 during the Spanish flu, and I think this will create profound, profound changes in the world that will last an entire generation. This is, even if and I’m not talking about the virus itself, that I do think this will be a very bad month. And it’ll it’ll peak toward the end of this month. And by middle of May, we’re going to be back on track in terms of things. But the memory of it will last a generation and the impact on the economy and the way we do things and our behavior. And how that impacts the economy, how it impacts real estate is going to be profoundly significant. And there are a lot of things that people need to do to reposition their portfolio to really reposition their thinking about their investments about their retirement, about you know, where they live, how they live, this is a big deal. I don’t want to understate it. And and I’m not. When I say that, by the way. I don’t say that in the sense that I’m panicking. I don’t say that in the sense that I’m, you know, I think largely the the reaction from the Federal Reserve and the government and other central banks and other governments around the world. In some ways, I think their reaction is much bigger than the problem. But at the same time, I do think there are profound lasting effects that will be with us, and we need to adapt to them. And there are many silver linings in the cloud. By the way, there are many good things that will are already coming out of this and, and will continue to come out of it. So happy to dive into these. There’s so much to talk about.
Casey Weade 2:58
There is and talk about things that will change us forever. I mean, never touched my face again.
Jason Hartman 3:04
If you can help it, it’s a habit, everybody else. I you know, I’m amazed to learn that we all touch her face, like 20 times an hour, I had no idea I was doing that
Casey Weade 3:12
I had no idea. And now look, I’ll probably be healthier. It’ll be a healthier population for many years. We will
Jason Hartman 3:17
we will all we were all germophobes now. Yeah, exactly.
Casey Weade 3:21
So yeah, there’s gonna be some profound changes, I want to get into the impact of the real estate market. But for some of those that are listening, that aren’t sure who Jason is, I would kind of like to talk about your real estate evolution, you know, where you’re at today, you didn’t just start by running out and buying 100 properties. You You gave this a star and it evolved over time. And I’m wondering what that evolution has looked like for you?
Jason Hartman 3:47
Yeah, well, just to, you know, I’ll make this really short, because I think there’s a lot of topical stuff and important things that you want to jump into. But basically, I started my investing in real estate at age 20. I was in my first year of college, I was selling real estate part time I got my real estate license at age 19. And a client of mine that I had sold a few investment properties to didn’t really love one of the properties he bought from me. And he asked me to sell it for him. And I said to him, I said, Jim, I don’t want to sell it for you. I want to buy it from you. And that was my first rental property at age 20. And from there, I’ve just been investing ever since I love income property. I think it’s the most historically proven asset class in the world. And interestingly, I think it will be the best performing asset class throughout this whole entire Coronavirus pandemic. We’ll see if I’m right about that. I think possibly the second pass will be gold. And I’m not a gold bug. By the way. I do own some but you know, I’ve just never been a gold bug. I think it’s a one dimensional asset class but, you know, there’s obviously the fear trade and then that’s, you know, something that’s It’ll happen. Interestingly, as much as I don’t love Wall Street, either, it’s starting to look like there will be some good stock buyers out there. So, you know, every every problem creates opportunities. You know, Casey, you’ve probably heard it or maybe some of your listeners have. But and this has nothing to do with the Wu Han virus or the China virus is, you know, some people are calling it. But the Chinese in their language. Many years ago, I learned that they have a symbol for crisis, which is the same as the symbol for opportunity. And literally translated, it means crisis is an opportunity, writing the dangerous wind, it’s kind of an interesting translation, right? And many opportunities are coming out of this crisis already, and many more will come. So I hope we can talk about that today and help your listeners just reposition their portfolios and do things right. Yeah,
Casey Weade 5:56
I love looking at this in a positive light. I think you know, when we get into these unprecedented times in our lives, it can create a lot of panic. But if we really look for the opportunity, there are opportunities abound today, no question. Well, let’s, let’s go there. You know, what do you think today is? Where do you see the biggest opportunities in the real estate market today?
Jason Hartman 6:18
Well, you know, I think, like I’ve said, I think there is going this is a generational shift, I think it’s a big deal. And as soon as the pandemic part of this blows over, and the quarantines and this probably be by early May, maybe mid May, something like that. As soon as that happens, we are going to start to see a mass migration out of high density living environments. And remember, when we talk about high density, we’re not just talking about, you know, someone living in a high rise apartment building or high rise, condo, that’s one component of it. But when you come out of your home, you know, say you don’t touch the elevator button, say you ride in the elevator alone, okay? And say, the elevator is disinfected all the time, right. So your building is very clean. And that’s all great. But what happens when you get out of your house, you know, on the street scene at the coffee shop, you know, at shopping environments, and eventually when they come back, and it’s gonna take a while restaurants, bars, movie theaters, concerts, things like that plays, you know, Broadway, everything like that, when that eventually comes back, maybe with people sitting in every other seat, who knows what’s left, this will be a it’s gonna be a different world, it really is. You know, we got to think about density and social distancing. This is the new thing that everybody is going to be thinking about. And I think we are going to see a huge hit to real estate markets, like New York City, downtown LA, or any part of La where I grew up that is highly dense. Obviously, the Bay Area, San Francisco, Seattle, Portland, San Diego, Miami, you know, Boston, Washington, DC, downtown Chicago, I think that people are really going to make an escape from these types of environments, and there’s going to be a mass migration toward suburban living. You know, when you look around the world, KC, America is very unique in the concept of suburbia. That is a uniquely American concept around the world, you know, and I’ve been at seven countries, I was born in Europe. You know, it’s kind of weird now that I have zero travel plans. But I don’t think that’s happened in 20 years for me. But, you know, I usually go to Europe a couple of times a year spend maybe a month there every summer or so. And, you know, European cities, Asian cities, cities around the world are dense, okay, they’re densely populated. And this is a big change in in terms of the US real estate market, I think we are going to see something that I predicted maybe eight to 10 years ago that I call the rise of suburbia. Now, the reason I predicted it back then had nothing to do with pandemic viruses. I wasn’t thinking of that. What I was thinking of at the time I made that prediction is the autonomous vehicle and the self driving car. And, you know, I think that is going to lead to the rise of suburbia. Because location, you know, if you look at real estate throughout history, I mean, even back to the time that we were living in caves, okay. Real Estate has always been valued on three basic concepts that’s, you know, kind of a cliche, location, location, and location, okay. And that’s what makes high density cities, so expensive to live in. You know, New York City is expensive because of density and demand and highly high paying jobs. Well, guess what, a lot of us have now realized that in terms of high paying jobs, and location, and also universities and the tuitions they charge, okay, that as the as that old story, the emperor has no clothes, the emperor has no clothes. And what I mean by that, is that now people are realizing thankfully that they can work remotely, a lot of people did before, but now they really get it. And people are adapting, you know, Necessity is the mother of invention, As the old saying goes, and people are pretty adaptable, they’re pretty good at adapting. And so our free market companies are capitalism is super adaptive more than any other system. And the late economist, Joseph Schumpeter years ago, coined the term creative destruction. And so we’re seeing a creative destruction happening just in the past month of universities that have adapted and are telling everybody go learn online, grade school, go learn online, stay at home, and the home is becoming the center of the universe. And as this happens, you know, the company is telling people to work at home, people are getting better at using remote technology like we’re using right now. And there, there are all sorts of new innovations that are being pushed forward faster and faster. Lots of companies, interestingly, are retooling their plants, you know, alcohol distilleries are making hand sanitizer. I think gm NG are both making ventilators. Okay, I think both of them actually, maybe I’m confusing that. All sorts of companies that made clothing are now making face masks. So the world is just radically changing and adapting very quickly. And some of this adaptation, in terms of the real estate market, are that we are moving more and more toward a frictionless real estate market, where people are more and more willing to do things virtually, you know, when I started in the business I’m in now that you know, people can find out more about it, Jason Hartman, calm or on my podcast, the creating wealth show, I got into this business, this angle on real estate in back in 2004 16 years ago. And back then, the idea of people buying properties around the country buying properties they had never seen in person, or investing remotely, was sort of a radical idea. Yeah. And, and a lot of people did it. And you know, my business was very successful as it launched back in 2004. But now, it’s become widely accepted and much more friction free, it’s going to make it easier for investors, because now renters are more willing to rent properties, virtually, they’re more willing to sign docs, using online electronic signing platforms, just a lot of stuff is becoming much easier and much more friction free, which is beautiful for investors, and the rise of suburbia, a big, big mega trend in real estate. And we’ve been recommending people invest in suburban real estate for 16 years. We’ve never liked high density markets. So I think that’s just naturally going to be a very good thing for us.
Casey Weade 13:37
So what’s this timeline look like? If we find ourselves here today? Do we go ahead and say, okay, suburbia is going to be a great opportunity. Let’s go ahead and get it get ahead of it. are we buying into suburbia at a good time today? Or are there going to be better opportunities in the future? As we see say potentially recession Go on, we see individuals that are potentially losing their jobs and going back to the oh wait period of time? Are people going to lose their homes? Are people going to going to be turning their homes over the banks of banks taking? How are the opportunities going to evolve? So I’m talking to people right now they’re saying, I would like to get into the real estate market right now. I think there’s going to be a lot of opportunities if we just sit and wait for those opportunities to rise. So how do you see this evolving over time?
Jason Hartman 14:24
Well, the right answer is I don’t know. Okay. So none of us know. We’re in uncharted territory. We have never seen this before. And look for all the people who think they can outwit the stock market or the real estate market or whatever look at Mr. market has a certain amount of wisdom that no one person has. And if you don’t believe that, just look at the powers that be who have much more information than we do. And those would be the central Banks, the Federal Reserve and the government have vastly more information than any person listening, including me or you or anybody. Right? Has they have more information? And they can’t predict the cycle? And they control part of it, you know, to also, and they don’t know, you know, No, nobody really knows.
Casey Weade 15:22
But that makes me think about your valuation discussion, you say, well, there is no such thing as a US real estate market. And so does that mean yet today, there’s great opportunities, and tomorrow, there’ll be great opportunities, and we just have to look for them.
Jason Hartman 15:35
Yeah. So you know, that’s why I always try to look at the macro economic angle on things. Because when you look at macro, generally speaking, you can you can predict macro trends. Can I predict day by day or next month? No, but I but I just know for sure that there is going to be a mass migration out of high density living environments, to lower density living environments. Okay. I can say that with certainty. And I think everyone listening probably believes that too. Will there be a recession? We’re already in a recession? Will it be ugly? God, yes. This is mind boggling what’s going on, the cover of The Economist magazine has a picture of the Earth from outer space with a sign that says closed on it. You know, you can’t shut down the global economy and expect not to create a recession or a depression. This is going to be just a crazy time. But the difference is that this did not happen. Because of ridiculous lending standards. It did not happen. You know, the banks have been really conservative, at least in real estate financing coming out of the Great Recession. This is not a long term problem. Now. I only I want to I want to couch that in this. Okay. I think every economy on earth is pretty much built on a house of cards. It’s all smoke and mirrors. Okay. So knowing that that’s the environment we’re playing in, that every economy is sort of built on this house of cards, if you will, okay, that’s just every economy. The question we have to ask ourselves is compared to what? Okay, if people you know, I love these idiots that are out there predicting the collapse of America, boom, compared to what I mean, seriously, the US has the biggest economy in the world. It has the biggest military in the world. It has the reserve currency of the world. And guess what else? It has the biggest brand name in the world. Okay. Everybody wants to come to America. Okay, bash at all you want say that the dollar is fiat money, and it’s not backed by anything. You’re wrong. Okay. The dollar is backed by aircraft carriers, and missiles. Okay. Just when you get down to it, at the end of the day, that’s how the US will continue to maintain reserve currency status, by the ability to inflict force and project power. That’s just, you know, it’s ugly, but it’s the way of the world. Okay. So the US is in a much better position than other countries dramatically better. Okay. And the US real estate market will definitely experience hardship. But so will everybody else. Okay. This. And by the way, you know, just as an aside, one of the really good things that is coming out of this that just, it just makes me feel good. Because this is a virus that doesn’t discriminate. I mean, it does in terms of it affects older people more harshly and affects men more harshly, much more Coronavirus, kills men dramatically more than it kills women. By the way, a lot of people that’s not very well publicized, probably for some silly political correctness reason. So it does discriminate a little bit, but it doesn’t really discriminate between borders. Okay. And one of the silver linings that’s coming out of this is I think this will lead to much greater global cooperation between nations, you know, we are realizing as a as the human race, that we’ve got to work together. Okay, we this is not no country can go it alone here. Okay. But, you know, that said, America still has some tremendous advantages, you know, in terms of your prior question, sorry about the long answer. You know, it’s kind of a timing the market question. And I don’t believe you can time the market. The problem is, if one tries to sit out and say, okay, the deals are going to get better. You might be right. Okay, you might be right. I don’t know. Certainly, when you look at the three different kinds of real estate markets in the world, linear, cyclical and hybrid markets, those cyclical markets, and those are the markets where if you’re looking at a graph, you know, they have tremendous Glorious highs and really ugly lows. They thrive and then they crash and burn. Okay. Those are markets that get all the publicity around the world. There are places like the West Coast of the US, San Diego, Los Angeles, San Francisco, Seattle, Vancouver, Canada. Okay. The West Coast out of the US even South Florida, Miami. Okay. The expensive Northeastern markets, Washington DC, New York, Boston markets like that around the world, their markets like Dubai, Paris, London, Hong Kong, okay. These are markets that have really high prices they’ve they appreciate radically in the good times, and they crash and burn in the bad times. Those markets are going to suffer greatly. So when you hear someone talk about the real estate market, that’s what they’re talking about. When you hear these sound bites on the news. They’re not talking about Atlanta, Ocala, Florida, Memphis, Tennessee, Jacksonville, Florida. They’re not talking about Houston or Dallas. You know, they’re not talking about Little Rock, Arkansas. They’re not talking to Gary, Indiana. Yeah. Well, Gary, Indiana, you might not want to talk about that one at all.
Casey Weade 21:14
You had a lot of properties in northern Indiana. Yeah, yeah. But
Jason Hartman 21:16
Gary is, you know, not one of the markets, we definitely recommend. Okay. I mean, if you’re a real bottom feeder type of landlord, sure you can do you can make money in those types of places. Same with Detroit, we’ve never recommended Detroit. Same kind of reason. But But you know, there are some exceptions and people look at you can make money in any area of real estate. I’m just saying that my plan is I think people should buy good quality properties in good markets. And they should by necessity, housing. Okay? When times get hard. People need shelter. We all now know, through this pandemic, that the home is the center of the universe, not an office building, not a retail Center, the home, that’s where everybody’s been told to go and stay at home. Okay. And guess what? People now realize, you know, if they’ve got a roommate, and they live in a two bedroom place, you know what? Someone’s got to move. My company told me I got to work at home, I need that spare bedroom now. And maybe my company gave me an extra two 300 bucks a month to work at home as an allowance. Okay. And I got to set up a home office. So someone’s got to move. Guess what just happened? We just doubled the demand for housing. Double. Okay, now, another funny thing. A lot of people have talked about all these couples that are at home quarantine with nothing to do, and that there might be a Coronavirus, baby boom in nine months. Okay. So, if that’s true, you know, if people are making love, right, then then they’ve got to they’ve got to get a bigger house. So we’ve increased the demand for housing, of both of those people in that couple have been told to work at home. And the kids have been told to study at home. And there’s, you know, a couple in two kids. Okay. Think about how much more housing you need now, more space? What if people are fighting at home, and they’re arguing, and they’re just at each other’s throats? And they realize, you know, they never spent this much time with her their significant other. I can’t stand you after this is over, I’m getting out. And the divorce rate goes up. Double the demand for housing. Okay. So, necessity housing, the demand is going to increase dramatically. necessity housing in suburban markets, that I actually want to get
Casey Weade 23:43
a little deeper into that clarify what we’re talking about. Because people might be I know, I’ve got families that are looking at flipping homes, or they already do flip homes. So then they’ve got long term rentals have got short term rentals. We’ve got vacation rentals.
Jason Hartman 23:57
I can talk about the short term. I’ve made some good predictions on that too. Where
Casey Weade 24:00
in the market is that opportunity? Long term, short term vacation rentals, apartment buildings? Can we drill down a little bit there?
Jason Hartman 24:08
Sure. So first off, I think at least this year, of course, and maybe next year, the global economy is going to get smaller, it is going to shrink. And whether that means a technical recession or not. I don’t know. Well, I mean, certainly this quarter or next quarter, we have a recession. There’s no question about that. Anybody who says different as they’re looking at the world through rose colored glasses, they’re, you know, they’re smoking something because they’re just wrong. Okay, we’re having a recession. Okay. But the recession could end pretty quickly, right? The technical recession, but many small businesses will go out of business, okay. The economy will be smaller. Okay. And so that means that as real estate investors, we want to catch people moving down. And provide housing to them. The discretionary income of going on vacation is that markets going to get a lot smaller, it’s going to shrink, okay. Now, in terms of the short term rental or Airbnb market, people will still take vacations. And a lot of their options are going to evaporate, either by choice or by economic reality examples. Many cruise lines will go out of business. And by the way, as an aside, and I’m not being political here, I’m just being accurate. Okay. I gotta hand it to the Trump administration. Because when the cruiselines came to them and said, We need a bailout, their response was, look, domesticate your companies in the US, hire us workers, follow us labor laws, and pay into the system. And then we’ll consider a bailout, you’ve been avoiding taxes are evading taxes, for years by domesticating. Elsewhere, and getting all the big American consumer market as your customers, you have the best of both worlds. That’s a scam. Okay? You want to bail out pay into the system. So we’ll see how that works out. Maybe they’ll domesticate in the US now. And, you know, like Carnival Cruise Line, the biggest one in the world that owns many other cruise lines, and maybe they’ll work out some kind of bailout. So the cruise business will definitely shrink. No question, the long distance vacation market will definitely shrink. Even if it all comes back. A lot less people will want to fly, you know, they’re, they’re just gonna be concerned about it, they’re gonna you know, you get an A little aluminum tube in the air. And you’re you have no social distancing opportunity. Okay. So it’s, it’s risky, okay. And there will be other viruses after this one. So when you can provide a short term rental property that people can drive to. And it’s an it’s in a suburban type of setting, not a high rise condo, not requiring flying, people will still take vacations. And because the big the number of vacation options has compressed, and it has shrunken people like we have one short term rental market that we offer St. Augustine, Florida, and it’s perfect. Our clients that have those short term rental properties there are doing pretty well they’ve had, you know, a cancellation here or there. And interestingly, some of the bookings are changing in character, where they have a fewer number of bookings, but longer bookings, because people want to escape the higher density cities. So for example, someone coming to St. Augustine, Florida for a short term rental vacation would come possibly from a higher density area of Atlanta, or Orlando. And they can easily drive to that, or you know, many other areas as well, right. But if you’ve got a short term rental property, in a high rise, or in any high density type of environment, especially one that requires people to usually fly to it, rather than drive to it, that’s a problem. That’s not going to do well. You know,
Casey Weade 28:10
so we’re seeing I’m glad you said that we’ve got a rental property just outside of Traverse City in Michigan vacation rental, that’s
Jason Hartman 28:16
probably pretty good short term vacation
Casey Weade 28:18
rental people drive there and word we’re continuing to stay booked the entire year. Yeah. And so I really like to hear that for that reason. And I also think it’s a neat opportunity for retirees when they’re looking for a second home, that can present a way to have that second home and not have it really eat too much into your expenses, maybe even provide additional revenue.
Jason Hartman 28:39
I think your rounds, I think I think that’s good. I think that’s good. Now, your short term rental in Traverse City, by the way, you know, the other thing I’d say about that is the high high end of the short term rental market will also suffer, because people are going to be more conservative, I think people the mindset is going to be toward a bit of a simpler existence after this. I think people are going to be more grateful for what they have. And that’s a good thing. And a lot of ways. I think the the extravagance and the super high end, ultra luxury short term rentals are also going to suffer even if you could drive to them. Sure.
Casey Weade 29:18
Yeah. So we see the biggest that’s one of the opportunities, a short term Vacation Rentals you can drive to and then it sounds like you your main business. And what you really like is these suburban areas where you’ve got family housing, right, not high end, maybe it’s lower end, but you’re buying a larger portfolio of these homes to generate revenue.
Jason Hartman 29:36
Yeah, yeah. Absolutely. And, you know, just as an aside, look, I think the short term rental thing is fine, given everything I said, but that’s not our main thing. You know, remember, vacation is always optional. And in tough economic times, people just aren’t going to vacation, okay, or not as much right. So that market will contract. So, you know, the core strategy is by inexpensive bread and butter necessity housing as long term rentals in good linear markets. Now what do I mean by linear earlier? Explain cyclical. So remember that graph we talked about just helping people visualize there’s a graph, right? That linear market is up, or sorry, the cyclical market is up, and then it’s down. It goes has glorious highs and ugly lows. So those are all the West Coast of the US all the trophy cities around the world that I mentioned. And then the linear market are those boring markets you don’t hear about in the news, Little Rock, Arkansas, Memphis, Atlanta, Ocala, Florida, Jacksonville, Florida, you know, and many others around the country that you could see at Jason hartman.com. Okay. And those properties make sense from day one, from a cash flow perspective. And they’re going to sell through this pretty darn well, I think. Now, interestingly, I think this is going to lead to some obviously new government programs, okay. And there’s a program that you probably know about called section eight, which is a rental housing assistance program. For people that’s been around for many, many years, decades. I mean, when I was growing up, my mom had some section eight rentals. And that’s where the government pays either part, or all of the rent to the landlord. Okay, I think we’re gonna see a dramatic expansion in rental assistance, I think we may actually see a nationwide rental assistance program that a lot of people are eligible for. And I think the economy is going to become much more government centered and much more socialist, whether we like it or not, it’s it’s the way it’s going. You know,
Casey Weade 31:47
if someone’s listening in the same, you know, that makes sense to me, I’d like to get into the rental market, I in maybe they want to jump on this, I just want to you’ve been through a couple different recessions in this market,
Jason Hartman 31:59
not just a couple of few. I’ve seen around the world, I’ve seen
Casey Weade 32:03
people lose a lot of money in real estate. I’ve seen people make a lot of mistakes. So if they’re going to go down this road, as we close here, what are some of the biggest things they need to look out for especially those close to retirement or in retirement? If they want to go this route? They want to take advantage of an opportunity. Where have you seen people go wrong? What should they be watching out for?
Jason Hartman 32:23
You know, the simplest thing I can say is, Well, number one, I got a great FREE video for your listeners. And it’s just on the front page of my website, Jason Hartman, calm, it’s 27 minutes long, it’s totally free. If you simply watch that one video, if there’s nothing else you do, to learn about real estate investing, just watch that one simple video that teaches people how to analyze a real estate deal. It’s totally free. Jason hartman.com. Just watch that 127 minute video, and it will really, really help. But barring that, even faster, as a rule of thumb, look at good rent to value ratios, or otherwise known as RV ratios. And if you can get somewhere in the neighborhood of 1% of the value of the property every month, you’re going to do pretty well. Okay, what that means is that if you’re looking at $100,000 property, and that’ll rent for close to $1,000 a month, it’s very hard to get hurt on that deal. Okay? I mean, yes, other things can go wrong. Life is complicated. Of course, there’s no foolproof investment. But you’re going to do pretty well, if you get 1% per month, because you’re going to be able to hold on to that property during bad times. And you’re going to thrive during good times, the place people get hurt, is they buy these crazy properties in California, or, you know, some of these cyclical markets, cities, that the properties are too expensive, and the rent to value ratios never worked. I have something I call the 10 commandments of successful investing. And commandment number five is Thou shalt not gamble, Thou shalt not gamble. And you know, I just believe in being a conservative, prudent investor. And when I say not gamble, I mean that the property must make sense, the day you buy it, or you don’t buy it. And what is making sense mean? It means it has a good rent to value ratio, and everything else explained in the 27 minute video that’s free on my website, but rent to value ratio. If you just get that. That’s a good safeguard. Okay, people do these crazy properties that are, you know, oh, it’s a $500,000 property and it rents for 2500 a month. Don’t do those deals like that. They are very risky in the short term rental market, people I make mistakes all the time because they buy these highfalutin properties. And they think they can rent them all as a short term rental. Well, guess what that market is going to contract, just like we talked about a few minutes ago. So you’ll never lose if you have the more basic necessity product in the marketplace, that will always be in demand. Do people like champagne and caviar? Sure, but it’s not necessary to survive. Okay, what’s necessary to survive is meat and potatoes. Okay. So that’s the kind of rental property you should be thinking about. That’s awesome. Jason, I
Casey Weade 35:35
know, this is just a crazy time for you right now you gotta run. And, you know, as we come to a close, I’m just gonna ask one more final question, if I may. And that is, what would you have? If
Jason Hartman 35:47
If someone’s listening in? They could just remember one thing from this conversation? What do you want them to know that housing has universal demand? Everybody has three basic needs food, clothing, and shelter. And we’re in the shelter business, provide basic shelter to people. It’s the most historically proven asset class in the entire world. And I think it’s going to perform pretty darn well through this whole pandemic we’re going through and just focus on the fundamentals. You know, I guess I’ll say, just maybe four things that are maybe more general, okay. And I said this on my podcast, number one, stay calm. As everyone is panicking around you, keep your head straight, stay calm. Don’t listen to the news day by day, step back, look at the big picture, and think, look at this is going to be an entirely different situation in six weeks. Okay, a month and a half from now, the news will be entirely different. Hopefully, it’s going to be a lot better, I think it will be. Okay. So, in six weeks, this whole thing is going to change. So calm down. Okay, relax. It’s, you know, this is not the end of the world, we will get through this number to keep good counsel. Be prudent. Listen to prudent people, like your show, like my show. Just make sense of things. Keep good counsel, okay. Don’t go off on every harebrained idea you hear. Okay. Number three, keep your eye on the ball. Okay, focus, focus on the big picture. You know, you had a game plan, probably, hopefully, for your financial life. stick to it. Okay, it’s still going to work. Okay. Yes, the world is changing in some ways. Don’t be a speculator, okay? Stay focused on prudent investments that make sense the day you buy them. And number four, don’t be paralyzed. Take action, you paralysis is always going to hurt you. Okay, so take action, you know, keep following your plan. And keep going, be a little more careful, be a little more cautious. That would be sensible. But keep your big plan going. Okay, keep doing all the right things that you’ve planned to do. So you got to take some action during this crisis.
Casey Weade 38:12
All great words of wisdom. Jason, I believe, you know, action is always key during times of crisis, to find the opportunity, we have to take action. We had to have a very timely conversation here. However, I would love to have the opportunity come on to have you on again, because I think real estate can play a valuable role in a retirees portfolio. And I don’t have appointed conversation about that in the future. Hope we get that chance. But thanks for joining us. Absolutely. Casey,
Jason Hartman 38:40
Thank you happy investing to you and your listeners. And if if I come back on and in six weeks, we will be having an entirely different conversation, I think. But but we’ll see. squishes to everybody and wash your hands and stay home and be safe.
Casey Weade 38:56
That’s right. Thanks, Jason. Take care.
Jason Hartman 38:58
Thank you.
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