Jason Hartman starts the show with a discussion on inflation. Inflation is a hidden tax but is also a hidden wealth creator in the income property equation. Later, he goes into high-density urban areas and is looking for more space, the reasons go beyond the pandemic. Jason chats with investment counselor, Doug to discuss recent collections and how commercial real estate landlords are holding up. They end talking about how the work from home shift has been more enjoyable for many.
Welcome to the creating wealth show with Jason Hartman. You’re about to learn a new slant on investing some exciting techniques and fresh new approaches to the world’s most historically proven asset class that will enable you to create more wealth and freedom than you ever thought possible. Jason is a genuine self made multimillionaire who’s actually been there and done it. He’s a successful investor, lender, developer and entrepreneur who’s owned properties in 11 states had hundreds of tenants and been involved in thousands of real estate transactions. This program will help you follow in Jason’s footsteps on the road to your financial independence day. You really can do it on now. here’s your host, Jason Hartman with the complete solution for real estate investors.
Jason Hartman 0:54
Welcome to Episode 15 1508 And we are going to talk about inflation sectors today. Very important topic. You know, I interviewed another guest and this interview will be coming in the future this morning. And it was very interesting because he is an office property operator. And so I really got an update on the office market in different regions around the country and what’s going on there as you know, it’s largely a disaster. But the funny thing is his name, no relation, of course, but but his name just happened to be Bryan Adams, and it got me to thinking Ah, that’s such a great song. I wish I could play the whole thing for you, but I can’t It’s awesome. So that is none other than Bryan Adams. And this gentleman’s name was also Bryan Adams. And so we talked a lot about inflation. He’s into macro economics. And so we had that discussion. And it made me think of the musician Bryan Adams and probably his most famous song about what the summer of 69 also known as the Summer of Love. That is the Woodstock summer when they had the famous Woodstock concert. And wow, what a time in history. I’m always telling you go back and watch old movies, old TV shows, and watch a documentary about Woodstock. There are many of them. I watched one a couple of months ago. And, you know, it’s just so fascinating to see how people live back then and what they thought and what their concerns were and all of this stuff. But when we look at money and investing and inflation, remember in 1960 The Nine, we were on the gold standard in people playing the economic game back then, like maybe you, maybe your parents, maybe your grandparents, they lived in a different world world where we were on the gold standard, at least partially Bretton Woods is a complicated thing. We’ve talked about it before, blah, blah, blah, blah, blah, we won’t go into it in the interest of time. But in that era, saving money was the bomb. It was a good deal. It was a good deal. And by the way, we talked about this last night on our live stream, and I want to invite all of you to our next live stream with a whole bunch of people on there was really great. Got some awesome questions. We’re doing it Sunday morning, and we’re going to try and do these every Sunday morning for you. So that’ll be coffee talk. And this coffee talk will be on what to expect in the future. As we talk about economics, markets, life in general, the new normal, whatever that means. We’ll go over it. And Sarah, one of our investment counselors will be joining me for that. It’ll be on my YouTube channel. It’ll be on our Facebook page, which is the Jason hartman.com Facebook page and the creating wealth Facebook page with all bunch of Facebook pages, so you can watch it on any of those. But I really kind of recommend you watch it on YouTube. That’s sort of the handiest place to watch it, if you will.
But we were talking about this. So that next live stream Sunday, Sunday morning, let me finish that thought before we move on. So that’ll be Sunday morning at 11 o’clock, Eastern 11am. Eastern, bring a cup of coffee or a cup of tea, and let’s have coffee talk. That’s tea, okay, coffee talk. And we will go over some really good stuff and it’s live. So you can ask questions and hey, we might even send you a link and bring you right on. So you can come on and join us if you’re so inclined. And if if we’re so inclined. So we’d love to have you for that and that it’s great. Because it’s interactive, it was a lot of fun to do that live stream last night. So check that out on our YouTube channel. But in 1969, guess what? The unemployment rate was 3.6% the federal spending was 180 $4 billion. That’s only with a B, not with a T like trillion. federal debt was only 360 $5 billion. scoff at that. But the inflation rate, even tethered to gold was 5.7%. The Dow Jones reached a high that you’re of 952 and a low of 769. And life expectancy was 70.5 years, the population of the United States and of course, Richard Nixon was president and Spiro Agnew was vice president. The population in the US was 200 and 2 million people now it’s like 320 8 million people and here’s the kicker, folks, the summer of 69. Here it is, the cost of a new home was $27,900. The median household income was $8,389. a first class stamp was six cents. a gallon of gas was 35 cents. A dozen eggs was 62 cents, and a gallon of milk was $1 10. For those of you who want some reference as to what inflation does, Now, imagine if you borrowed money in 1969. And we had all that inflation through the years, and inflation just basically paid off your debt for you. It’s a beautiful thing. It’s a beautiful thing. Say it with me. I’m a real estate investor. And I love inflation. Come on, come on, you can do it repeat after me. I’m a real estate investor. And I love inflation. Inflation pays off my debts. Yeah, it’s a beautiful thing. It and it creates wealth for me, you know, I’m just making this little affirmation up as I go very high. Inflation pays off my debts and creates wealth for me. I’m a real estate and now let’s not do real estate, let’s do income property. That’s a more accurate statement. I am an income property investor. I love inflation. Inflation pays off my debts for me, and it creates wealth. It is the hidden wealth creator in the income property equation. There you go. There’s your affirmation repeated often. So a lot of you yesterday, especially after our livestream, or even during our live stream registered for upcoming meet the Masters virtual conference. You can get your tickets at Jason Hartman comm slash master And get them quick earlybird level two ends tomorrow night. That’s Friday night. So get your tickets and join us on Sunday for the live stream. And in fact, you know, we might even give out a promo code at the live stream that lets people have the early bird price even after it expired, but only for people who join us. So join us for the live stream, YouTube or Facebook. You can find it on my YouTube channel, but on Facebook too at the Jason Hartman comm Facebook page. So without further ado, let’s get to our discussion on inflation sectors. It’s my pleasure to welcome one of our investment counselors back to the show and that is Doug, you’ve heard him on the show for maybe 10 years now on and off. And you also may have seen him speak live at our conferences. He’s the guy that does the portfolio builder game and all those great games that have entertained so many of you. And so many of you have really said some very positive things about those. And Doug, you know, the challenge, we’ve got our virtual meet the Masters coming up. And your chance, right is to do the game or a game because you always modify it a little bit every time which is really nice for our regulars that keep coming back over and over. We want them to have something new, not just the same old thing over and over again. And I don’t know what your plan is for virtual meet the Masters but this is the first time you’ll be doing the portfolio builder game or maybe you’re changing the name to virtually right so
Exactly, yeah. virtuals coming up. Well, one of the things that we’re that we’re really trying to orient our challenge around is getting people to really take action because, as you said, right, there’s not a bad time to buy real estate but we are really at almost a mother of all buying opportunities, not for not because price are depressed like they were in 2010 11. But more because, you know, we’re really on the precipice of a multi year of possibly a generation long migration away from urban cores out towards suburban areas. And so this is really probably one of the better times in the past 30 or 40 years to purchase the kind of real estate that we offer the detached single family residential rentals.
Jason Hartman 10:23
Yeah, yeah, no, it’s really, you know, nobody wants to live in a high density area anymore. It used to just be about Coronavirus and that fear but now it’s also about civil unrest. And when you see what’s happening in some of these cities, it is just really scary. I mean, the police are literally giving up pulling out like I said on the show recently you know, if there ever was a reason to go buy a gun or five, go buy a gun or five and get trained on how to use it and have adequate ammunition You know, it might be now because We are really seeing another time where the police either can’t or just won’t protect you. And that’s pretty scary now, you know, I’m looking at the world falling apart if you know we’re all seeing that from our own perspective, because we all live in different places, and we all have different wives. And people have asked me, well, how you doing over the past several months, I’ve heard that a lot. And it’s like, I’m fine. My life hasn’t, other than not getting on an airplane, which I actually appreciate. And like, my life is quite fine. I mean, I live in suburbia, and everything’s quite nice around here. No, no problems whatsoever. Everything’s great. But I tell ya, if I lived in a city, it doesn’t even have to be a big city or super high density. If I lived in a suburban apartment complex or condo complex. That was four storeys high and I needed to take an elevator or go down a hallway I wouldn’t feel that comfortable. And then you had civil unrest to that. And wow, it’s, you know, you got it’s a one two punch, isn’t it?
Well, and I’ve actually been thinking about that a lot lately, because of course, you know, all the people in the media are trying to make it about, quote, white America versus, quote, black America or Hispanic America,
Jason Hartman 12:21
whoever you’re trying to make a race for when there isn’t one. It’s ridiculous.
But what it’s really about is affluent versus everybody else. Yeah. which, incidentally, everybody else includes many people in, you know, in the Caucasian ethnic group who are disproportionately represented in the affluent class. Yeah. But one of the things that has really kind of popped out to me is that what we’re really seeing is we’re seeing the ultimate collapse of you know, what I call the middle class fiction, you know, of course, the middle class fiction is that right? Okay. You know, you go to school, you go to a good college, you get a great corporate job you go up have your career path, then you retire with a ton of money. And all like, yo, in all actuality, what happens is you go to college, you take up on a ton of debt, you might, and you basically have a raffle ticket and that raffle ticket says, Hey, I have a chance at a corporate job. But if I don’t get that corporate job, I will probably end up doing something that I didn’t need to go to college for everything I needed to know I could have learned on the internet for free. So
Jason Hartman 13:25
you know, I just mentioned, I mean, I have my criticisms of Ilan Musk, but I’ll tell you one thing. He claims I was watching a documentary about him. He says he learned rocket science by watching YouTube.
Isn’t that amazing? I mean,
Jason Hartman 13:44
he is an engineer, okay. But we live in this amazing it’s an amazing time to be alive, where we live in this amazing era, where your fellow citizens will just teach you everything. Learning has become a peer to peer Your experience. And that’s just a wonderful thing. You don’t need a professor to teach you this stuff anymore. Now, in some cases you do for the credential, but not for the actual knowledge necessarily. So you’re talking about that raffle ticket to the middle class fiction. Right? Go ahead.
Exactly. Well, and so because what happens is right, you know, you go through a normal career path, and you know, say you’re at a corporation, and you know, and you took on a whole bunch of debt, but you’re making good money to paying it off. It’s not a big deal. You get promoted a few times you go up through the ranks. And then at some point, you know, something happens, like there’s 40 million people unemployed, and everybody needs to cut payroll, because, you know, their revenue just went down by 40%. Well, in all likelihood, what they’re going to do is they’re going to say, okay, who’s making the most money, those are the people who have seniority. And then at some point, you get your, you’re gonna get pushed off the books, if you’re one of the extremely small percent that managed to make it up to high enough in the chain, to where you’re the one deciding who gets let go before a lot of people get let go. You might be able to make it. But again, that’s a raffle ticket inside of a raffle ticket. And what’s happened is there’s so many people chasing after kind of this, you know, this paper fantasy that it’s, you know, it’s escalated the cost of college escalated the cost of a whole bunch of other things, when in all likelihood, this is largely a delusion that’s all coming unraveled at the same time.
Jason Hartman 15:20
Yeah, sadly, it is the middle of science fiction, that’s a really good way to put it.
Corporate America is not going back to what it used to be. No,
Jason Hartman 15:27
nothing’s going back to what it used to be. This is a mega shift, folks. And I just recognized that pretty early because for many years after this, there is going to be a degree of post traumatic stress disorder, a PTSD that is not going away with a vaccine. And it’s not going away with race reparations, and it’s not going away with Joe Biden as president or anybody else. It’s deep. The culture and California is sort of a good example of this in a in a negative way it’s about it. But a good example of a bad thing. And what California my home state has become is a banana republic. And the Banana Republic is speaks of this this concept where you have the rich elite class, and then you have the peasants, okay? And the middle class has just been hollowing out for years. And what we’re here to help people do to guide them through this process of not getting hollowed out to help them get up into the upper middle class or if they’re already there to get up into the wealthy class. And there are various definitions of you know, ultra wealthy is usually considered $30 million net worth and above. And you know, there are various tiers of this, but look, we Want to be people’s guide, and we’ve done it for a couple thousand people already. And hopefully we’re going to do it for someone new listening to, to make sure that they are secure, and their lifestyle moves up. Well, the whole middle class has just being called out. And it’s been going on for a few decades now. And it’s that middle class fiction. And the other thing is, we are going to have more opportunities as we did during the Great Recession. 12 years ago, I had a lot of listeners listening to the podcast, asking, you know, hey, Jason, I love everything you’re saying about real estate, but right now, times are tough, and I need a side hustle. I need another income stream so that I can do more investing. So I started making some of the podcast episodes about home based business opportunities and side hustles if you will I’ve done that a little bit. So far. Now, you know, we talked about the tax deeds. We talked about some other things that people can do to create wealth for themselves. And so you’ll see more of that coming up. But Doug, more on that middle class fiction, and then let’s get to rent payments and inflation. We got some stuff to talk about there.
Yeah, sure. And the thinking, I’m just really seeing this, you know, with all this coming on wound, you know, there’s been a lot of perceived stability in corporate employment, that is just coming to an abrupt end for a lot of people. And one thing that or opportunity A lot of people have is that, you know, if you have been displaced, you’re able to put your primary mortgages under forbearance. And the forbearance guidelines actually going to go for quite a while. So there’s a lot of people who really have an opportunity to remake their life. It doesn’t feel like it. It feels like your whole financial worlds coming apart. But there’s actually a really big opportunity that hope a lot of people will take advantage of America
Jason Hartman 18:58
is really good at second chances. You know, a lot of people have emerged from a history where they’ve had real real struggles, and that it’s a pretty, like resilient economy because it gives those second chances. Whereas some other countries, you know, if you’re ruined once, you’re never going to have the chance to be ruined again. Yeah, in other words, you’re ruined forever, you know, you’re, it’s over. But you know, the US is pretty forgiving like that. And that’s, that’s a good thing, I guess. But remember, forbearance is not without its consequences, okay, if you’re wanting to buy income properties, the word on the street is do not enter a forbearance program. Do not do that, because it’s going to inhibit your ability to get more financing for future purchases. And you don’t want to miss out on this opportunity here. As we experience what john burns called the Great American move. We are in the midst of the great American move while we’re at the beginning of it, it’s going to be hugely significant. Just we’re going to share with you on an upcoming episodes about moving stats, and how the movers are doing. If you’re in the moving business, if you’re in that industry, you’re probably already seeing that you’re very, very busy. Now, if you if you own a u haul franchise and rent trucks, you’re good for you. You’re gonna do quite well. Exactly. Yeah,
exactly. Well, and because moving on to one of the other things you were planning on talking about was just the rent stability. So one of the things that we were looking at was, you know, what’s the percentage of rent that was that was paid on time, and it’s actually really close to last year. I think we’re going from something like 82% down to 80%. I mean, that’s an almost imperceptible,
Jason Hartman 20:39
yeah. It’s amazing. You know, Doug, so let’s be specific, so may of 2019 rent collections. Now, remember, this is going to be a survey of multifamily units. This is not for single family homes. Again, the reason for that is that single family homes don’t Report to any big centralized place. So when they do these surveys and this one is from the National multi family housing Council, that’s a trade group. Okay. And so you know, they have lobbyists and they have conferences, and they keep statistics, okay. And what they’ll do is they’ll survey their big institutional landlords and they will share the numbers on their rent collection. So again, single family home rent collection, I will guarantee you is far better than these numbers far better. Because I know we’ve noticed ourselves with our own clients and in my own portfolio, I’m not having any rent collection problems. I expected it yet. The prints are all coming in. On the apartments, you have a more transient lower quality tenant base. So you know collection is never going to be as good and you’re always going to have more move ins, move outs, apartments or temporary single family homes are more permanent, but may of 2019 at 1.7% made their rent payment. Now, this chart doesn’t show how much time that was like. In other words, oh, it says week ending on the sixth of the month. So it does show that. So by the sixth of the month, in 2019, May, at 1.7% of tenants in these large institutional apartments made their rent payment. Now fast forward. And Doug, I’ll let you share this one. May of 2020. Tell us what happened.
Let’s see. So when we come into may of 2020, the number is 80.2%. So that’s, it’s fairly insignificant, it’s nothing. It’s noise.
Jason Hartman 22:46
So you’re saying to me back, that one half of 1% decline deterioration in the rental market in May, year over year,
something like that. Yeah. It’s the See, let’s look at the exact numbers. So for talking 81.7, down to 80.2, that’s 1.5%.
Jason Hartman 23:08
That’s the total material. Oh, sorry. Sorry. You’re right. Yeah. 1.5% even
that, isn’t that I mean, it’s nothing. Yeah. In fact, even this, okay, so look at this in April, April, rent collections were 78%. And they went up to 80.2. Yeah. And so the decline from May 19 to may 20. is less than the increase from April 20. To may 20.
Jason Hartman 23:31
Yeah, significant. It’s the news media would love to make a story out of this, but there just isn’t a story there. You know, you know, where there’s a story is in the commercial world. I’ve shared that on the show, you know, that the commercial landlords are just not paying their rent, commercial tenants. I mean, whether it be an office space, I just read an article about all the law firms defaulting on their rent. You know, obviously in the retail and the restaurant rentals, they’re just not paying. So that’s the landlords are really Suffering there. But in residential, the home is the center of the universe. And people want to keep the home. And interestingly, even if they know, they can’t get evicted at the moment, it seems as though they’re either just doing the right thing and being good moral people, good citizens, or they just don’t want to ruin the relationship with their landlord for future months. And that may be the other reason, you know, because those moratoriums I have been lifting obviously. So let’s June over June. Tell us about June 2019 to June 2020.
So I’m gonna go June 2019. That was 81.6% last year down to 80.8%. So this means that June is up 0.6% sequentially made a June and it is down only 0.8%. year over year,
Jason Hartman 24:51
so not even even a 1% difference. year over year. Now, in 2019. We didn’t have a pandemic At this time of year, we did not have a race war. We did not have civil unrest. And in the month of June, the rent collection difference by the sixth of the month is less than 1%. dug as they say on the old Wendy’s commercial with the little lady, where’s the beef? There’s nothing.
Yeah, there’s not a story here. Yeah,
Jason Hartman 25:27
yeah. It reminds me of that famous song from the 80s. Let’s give them something to talk about. You know? Yeah. Right. Yes. There’s nothing to talk about here. Folks. Move on. There’s just there’s just nothing that we’d like to give them something to talk about. But there there isn’t a story. Okay, so rank collection is strong. Thankfully. That’s good news. Doug. We got to wrap up fairly soon. I think you you’re in a bit of a time crunch, but you want to talk about inflation real quickly.
Sure thing. So one of the things beautiful chart that we saw, was looking at some different inflation by sector. And the sectors that had the high inflation were, you know, groceries, meats, were medical care services, and then gardening and lawn care, you know, makes sense. Because all those are things that have been buoyed up by people staying at home. But then on the other hand, our lower inflation sectors or deflationary sectors have been energy, which is dropped like a rock, and then apparels, hotels, airlines car rentals, you know, auto insurance, those things just all just plummeted. And one of the things, I think that’s a motor vehicle. Yeah, exactly, is that all the areas that have been strong are areas that are associated with people at their home. And so I think what that’s doing is that’s really showing us that, you know, hey, in a really stressful time, real estate has, you know, the income real estate that we recommend has tremendous resilience. You know, as I’m fond of saying, right? You don’t really know if this strategy works until you have a stress test, right? And you don’t get stress tests, all that Often, anything can look good when you’re in, you know, when you’re in a growing market, but it’s when you have a big disruption that you find out whether what you’re doing makes sense.
Jason Hartman 27:09
You know, I think it’s Warren Buffett or Charlie Munger who says, It’s when the tide goes out, you can see who’s wearing a swimsuit or not right?
That’s not until it’s time goes out to you find out who’s swimming naked in folks. I mean, look,
Jason Hartman 27:22
it could be worse than this with what’s going on in the world. But it couldn’t be much worse. I mean, yes, we could have a war. And there are definitely tensions. I mean, we’ve got North Korea again, going off the deep end, we’ve got Iran. There’s definitely geopolitical concerns. But we have a global pandemic. We have civil unrest, not only in the US, but all over the world. We have austerity measures. I mean, the world in a lot of ways it doesn’t look very good right now. Okay. And, and yet, we see all this, let me just give you a sound bite on each Have these charts. Okay, so higher inflation sectors food up 4.8% groceries are at the highest price in five decades. I’ve totally noticed that myself. As I’ve been shopping, I go to Trader Joe’s and just anecdotally that I buy pretty much the same pattern of groceries. I don’t change it too much. Anecdotally, Trader Joe’s, I get two bags of groceries and you know, I’d have some wine in there and some nice things and it’d be 100 bucks. Now it’s $160 I did not change my card around that much, or what’s in those bags. I’ve definitely noticed that myself. I know everybody listening house. So meat prices up 11.7% now that one, you know you got to take that with a grain of salt because there have been specific problems to the meat industry. So that one’s a bit of an anomaly. I don’t want to say that’s inflation based completely but healthcare medical school Services up 5.9% who says there’s no inflation? This is crazy. Like you said, Doug gardening and lawn care up 9.7% I don’t know why that is that doesn’t seem like it would be a Coronavirus related. Any thoughts on that? One?
I think it all has to do with the fact that people are out there are stuck at their house. And so they’re trying to take care of you know, they’re they’re trying to take care of their property. I know for us, I’m okay. Yeah, go ahead. Well, and so in this case, right. You know, if you’re talking about gardening or lawn care services, now’s the time to do projects, right. If you’re stuck at home, it’s time to do projects. Whenever I go to Home Depot or Lowe’s, the place is just packed. Just people Oh, yeah, there’s people that are getting stuff for doing home projects all over the place. I know because I was at Lowe’s trying to get the polymetric sand for doing a project at our back patio about a month back. What is poly Eric sand, it is sand that has plastic polymers in it. So what you do is you put it in Between paver stones and then when you get it wet, then the the polymers bond together and so you have self sticking sand got it
Jason Hartman 30:08
got it isn’t that boy technology’s everywhere is an amazing, amazing time to be alive. But yes, technology stand out as the home is becoming the center of the universe. People want to make it nice. I’ve been saying this for a couple of months now, home improvement projects. I not specifically like I haven’t been to a hardware store like you have, but you know that that doesn’t surprise me too much remodel projects. Okay, that’s going to be big soon. Or just moving instead. That’s the easier one and furniture stuff for the home. If you’re in the home goods business, you’re going to do pretty well. Okay,
let me think about it like this. Jason. If you live in a apartment or condo in the middle of a city, then moving is the ultimate remodel project, right? Yeah, exactly. Because Yeah, what you’ve done is you’ve just gone from a 500 square foot building. elevators share shared living space to say a 1500 square foot detached house to the property. Yeah, that is the ultimate remodel. And guess
Jason Hartman 31:07
what, it’s a major upgrade to your life in so many ways. And your rent went from 30 $800 a month to 1500 dollars a month. 1500. You know, yeah. So it’s it’s much better and you have a yard too, and you can get a dog bound. So there you go. Okay, so low inflation sectors, energy energy’s been crushed. We all know that because people haven’t been moving around. So Oh, we saw oil prices totally collapse, energy usage. Now, the interesting thing about the electrical energy, okay, there’s many types of energy, okay. But the grid has been stressed because everybody being at home uses more energy than everybody being at an office because it’s not communal. You know, people when they leave their house, they wouldn’t run their air conditioning all day. yet. Everybody’s in their individual. Bubble running it instead of in a common office where it’s you know, more efficient and you can cool more people for much less cost and much less taxing many less kilowatts, but energy for industry and manufacturing. The demand for that just plummeted for quite a while but it’s coming back as we know. So energy down 18.9% Okay, now apparel. We mentioned this on the show before but if you talk to apparel companies, they said that apparel for the top half of the body was still selling pretty well. But for the lower half of the body wasn’t selling meaning people were on video calls. They look like from the way that is the funniest thing ever. But anyway, yeah,
that that is a that is actually an amazing anecdote. And one of the things I was thinking on the energy side too, that’s that’s very interesting is that if you have electrical transmission Energy. Electrical is one of the forms of energy that is that they’re actually the most options that don’t involve hydrocarbons. And so one of the things that you have with this is you do have an opportunity for an inflection point in trying to reduce overall carbon output, you know, now this is of course, you know, assuming that the objective is to reduce carbon output and not to use carbon as a shill to have an authoritarian government, right? Like they already have that it’s called COVID. They, you know, they don’t need to use us climate change for that anymore.
Jason Hartman 33:31
Like the same goes. green trees have red roots. Okay. So yeah, so now they can do the authoritarian intrude on our lives and tell us what to do thing, because they got the guys with the virus to hide under rises in the environment. So yeah, they can switch, wag the dog, you know, Hey, everybody, you need to see the movie, the old movie from the 90s wag the dog right now I’m gonna watch it again. Because this whole COVID thing and race war is a To giant wag the dog things if you ask me, it’s getting quite interesting. Go ahead.
Oh, and the thing that I was thinking of, though, is that the notion of, you know, the climate changing is real, you know, and you know, the impact of carbon is real, I think the place for that’s where it’s always falling down. It’s just the assumption that an authoritarian government is the only way to deal with, you know, if you give the government unlimited authority to deal with the climate, they won’t fix the climate, you’ll just have an authoritarian government with the climate that is pretty much just as bad as it was before or
Jason Hartman 34:30
worse, because if you don’t have private ownership of things, like we saw in communist Russia, you know, when Greenpeace went in there, I remember reading Greenpeace magazine, right after the Soviet Union fell, and they went in and toured the Soviet bloc, you know, Russia and the other countries and they just saw environmental destruction everywhere. And that the article basically that the net of it was that when people and this is from Greenpeace of major left wing group, okay. None of it was when people don’t own property when they don’t own the land, they don’t care about it. Correct.
So yeah, I think just the the dynamics of what we’re seeing are just just utterly amazing. And I have at least a modest idea of how they’re going to how it’s gonna shake out, you’re gonna have, you know, especially in things like airlines, I highly doubt that airline, you know, of course, because airline prices have gone down like 30%. And there’s idle capacity everywhere in the aerospace industry. And so that means you’re probably going to have at least one major carrier that goes out of business, you’re going to have prices stay extremely low for a long time they just because there’s just so much idle capacity, that you know that there’s going to be intense competition to try to keep those planes anywhere remotely close to full. So yeah, there’s going to be very long lasting impacts from all this
Jason Hartman 35:52
air, air, air travel right now. And this is TSA so it’s not worldwide, but it could be non domestic flights, where Someone has to clear TSA. The number of passengers is only 17% of what it was one year ago. And that and it’s already coming back. It’s better than it was it was really bad during the the worst point in the lockdowns, but right now, it’s 17% of last year’s number. And yeah, that’s still I mean, that’s a catastrophe. So yeah, so apparel down 7.9% hotels, motels and lodging, down 17.3% and airfare. Doug, you just set it down. Yeah. 28.8% Car and Truck rental that you mentioned down 19.2%. And what’s interesting about that one is that car and truck is not split up. And I say that car rental will remain variable cheap. By the way, if you’re looking for a used car, go to hertz.com. They are selling thousands of cars. I looked at a few I was thinking maybe I should pick one up. They’re so cheap, you know, you got these. There’s just a lot of a lot of good deals. On those cars. It was pretty attractive, like truck rental, I say we’ll actually get very inflated during the Great American move. Now, they’re not distinguishing what type of truck but if there are any thing that’s a moving truck, or a construction truck, you know, that’s boom, time for that, you know, it’s it’s not split up. So in motor vehicle insurance, because nobody’s driving down 14.3% but rent, CPI, the consumer price index for rent, year over year, up 3.5%. Up 3.5% in the midst of all that rents are up.
Interesting. Exactly. Exactly. One thing what all this comes back to is that it’s like you said it really is an amazing time to be in life. amazing time to be alive. And it’s an amazing time to be an income property investor. I mean, boy, the economy just got shellacked. And our properties have just held up beautifully. And they’re positioned right in the middle of where everybody’s moving to.
Jason Hartman 38:14
Yeah, I know, we’re right. Since we sell suburban properties, and this is exactly what everybody wants, we are in a very good position. I mean, I shouldn’t say we, I should say you listening, if you’re assuming you’re following our advice, our plan our guidance, you are in a very good position. And I gotta tell you, I’m just going to be very candid as we wrap it up here, folks. You know, I had a, you know, a heart heart talk with one of our investment counselors. I mean, we’ve talked, of course, Doug, but this particular talk that I’m going to recall right now, was with Sarah, and, you know, I said, Sarah, you know, we may have to make some really tough decisions in the next six months. As this broke out. I was worried. I mean, I didn’t know where this was gonna go. None of us really even now know where it’s going to go. But one thing we know for sure is that Well, a few things we know for sure, I guess I should say, housing is the center of the universe. People can work remotely. They all have discovered that people can learn remotely, they don’t need to go to an office, they don’t need to go to a school, they can do all that remotely, and they like it. And they’ve adopted it. And suburban migration is huge, huge, huge. Yep. And interest rates are low. We know that too. So take advantage of it folks. And And on that note on let you wrap it up.
Basically, we have the strategy, we all know what needs to happen. And now Now it’s time to pull the trigger. If there was ever a time to do it, now is the time to do it. It’s not that crazy low prices from from foreclosures that we saw in 2010. It’s the crazy big migration trend that are going to eventually make the prices and rents we’re seeing now just seems pennies.
Jason Hartman 40:00
Yeah, I agree. Okay, Doug. Well, thank you very much. And if you need us, we’re here for you to guide you to assist you on your path to building wealth through income property, reach out to Doug or any of our other investment counselors at Jason hartman.com. or by calling one 800 Hartman if you’re in the US, that’s only a US phone number one 800 Hartman If not, catch us on the internet Jason hartman.com. And until next time, happy investing.
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