Liquidate entire portfolio until virus is over?

bostonerimus

Thrugelmir said:

Even if lenders were sympathetic doesn't change the underlying issue of leverage. Leverage magnifies returns and compounds losses. The attitude to risk has become highly complacent over recent decades. Property letting was once in the main of the preserve of the capital rich. The ability to access cheap credit being a major factor with no experience for many of a recessionary period. Going to many squeals of anguish and complaints of a lack of support. As you did. Should have paid down debt rather than expanding empires during the good times. 

That's why I also mentioned a potential drop in rental rates. If mortgages have been taken out based on pre virus rental returns low rents and house values could make the debt level unsustainable. The uncertainty of inflation and interest rates are other things to worry about when you are carrying debt.

I don't see an issue in expanding an "empire" as long as debt levels don't become speculative and you have enough capital to survive the tough times. One real estate emperor who might be in trouble is Donald Trump.

worldtraveller

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EdGasketTheSecond

bostonerimus said:

ProDave said:

Surely a re-start-up scheme could be introduced, so these business can operate again, as demand for such services (even a possible explosion in demand in some sectors ) could happen again once a full lockdown is over?

So something like let them go bust and then re start with the same managers and workforce but free of debt?

I see landlords being a BIG looser if that were allowed to happen.

Landlords with mortgages and unsympathetic lenders could have a tough time if renters are unable to pay and if rents collapse post Covid 19. I'm glad I paid off the mortgage on my rental a long time ago now that my renters are having a hard time coming up with the rent because it isn't very painful for me to give them a rent holiday. I don't get the money, but I do get the satisfaction of doing something to help out in this tough time.

How are you going to get them to start paying rent again; could be an uphill struggle?

bostonerimus

EdGasketTheSecond said:

bostonerimus said:

ProDave said:

Surely a re-start-up scheme could be introduced, so these business can operate again, as demand for such services (even a possible explosion in demand in some sectors ) could happen again once a full lockdown is over?

So something like let them go bust and then re start with the same managers and workforce but free of debt?

I see landlords being a BIG looser if that were allowed to happen.

Landlords with mortgages and unsympathetic lenders could have a tough time if renters are unable to pay and if rents collapse post Covid 19. I'm glad I paid off the mortgage on my rental a long time ago now that my renters are having a hard time coming up with the rent because it isn't very painful for me to give them a rent holiday. I don't get the money, but I do get the satisfaction of doing something to help out in this tough time.

How are you going to get them to start paying rent again; could be an uphill struggle?

No struggle. They are good tenants and have the downstairs apartment so I seem them regularly. 

Username999

What happens to the likes of Ocado and Zoom after we get back to work?

bostonerimus

Username999 said:

What happens to the likes of Ocado and Zoom after we get back to work?

They will probably do quite well as people will continue to do some things online that they've found to be convenient.

Scotbot

Username999 said:

What happens to the likes of Ocado and Zoom after we get back to work?

Ocado will carry on as before. Zoom will have to compete in the corporate world with Teams, Webex, GoToMeeting and the like.  They will have gained great market awareness, if not owned by one of the big tech firms I expect they soon will be.  I like to think families snd friends will revert back to actual face to face contact.

tel_

The general public can't cope with having to cut their own hair 'in house', so if hairdressers/barbers go bust, who's going to put all these haircuts right?

The same with other professions as well. If many businesses are allowed to go bust, how can the 'demand' be dealt with after?

Thrugelmir

Easy enough to phoenix a hairdressing business. Just requires a good business plan and a Government funded start up scheme. 

tel_

Thrugelmir said:

Easy enough to phoenix a hairdressing business. Just requires a good business plan and a Government funded start up scheme. 

So yet another Government funded scheme to go on top of all the other schemes and debt we are going to have. Not to mention new hairdressers with not much experience unlike the ones who've gone bust, and very little/no business sense which is very possible.