Based on the recent developments which include travel bans, school closures, and borders closing, I feel compelled to share some advice on how we can be prepared as landlords for what may be a worst-case scenario in dealing with the coronavirus outbreak.

For context, I am based in Seattle, Washington, the epicenter of the coronavirus outbreak in the U.S., and I personally own rental properties in four different states, including Washington State.

Admittedly, I’m a bit on the reckless side when it comes to health. I eat street food in foreign countries, I do not get annual flu shots, I avoid the doctor as much as possible, and I have more of a YOLO mentality.

But when it comes to my family’s finances, I’m a plan-for-the-worst-hope-for-the-best kind of person, and it’s likely the economic impact of coronavirus will have similarities to what I experienced as an investor in 2008-2011. In fact, I’ve been preparing for the next “downturn” since I started investing thirteen years ago.

I’ve kept our entire portfolio at 50% LTV , the debt coverage ratio of our rental portfolio stays around 1.5, meaning our rents would have to drop by 50% in order to break even. At times I have questioned whether I was playing things too safe, and it’s times like these that I am reminded that a more conservative plan pays off in the long run.

So here is my advice to any rental property owner on how to approach challenges ahead.

1. Fill vacancies as soon as possible even if you need to reduce rents. If cities go into lockdown mode, tenants will not be searching for apartments. Call your property manager and ask them to do what they need to do to fill units within one week, ideally on a six-month lease if you’re having to offer a large reduction in rent.

2. Renew month-to-month leases to a 12-month lease as soon as possible.

3. Consider getting home equity lines of credit (HELOC) on rental properties and on your primary residence to have access to capital should you need it.

4. Get quotes to refinance any properties with mortgages with 5% interest or higher. This will help with cash flow should any of our tenants struggle to pay rent due to layoffs.

5. Re-quote insurance rates to help lower your expenses, I did this earlier this year and I saved $152 per month across three properties.

6. Many people’s jobs and incomes will be affected by this crisis and you should be prepared for tenants to have difficulties paying rent.

Prepare financially for tenants who may be laid off. I experienced this in 2008-2011. At one point, almost a quarter of my tenants were on unemployment yet still able to pay rent because we only purchased affordable rentals. If you have any higher-end rentals, consider selling ASAP or anticipate that it may be a challenge to collect rent.

Additionally, I am continuing to make offers, which may seem counterintuitive. With interest rates as low as they are and the fact that people are fearful, this is a buying sign to me. We do not allow short-term blood in the streets talk to change our investing strategy.

We are using the same strategy as we did in 2009-2011, which is value-add multi-family with small and affordable units in places where there is job growth and population growth.

It is expected to be harder to find contractors to renovate like in 2009-2011 when many contractors went out of business. Be sure to factor this in your numbers along with a minimum 10% vacancy rate.

We are likely to experience times where it would be easy to get sucked into fear mode. Stress weakens our immune system, making us more susceptible to getting sick.

It is best to turn off the news and get updates from our physician friends and from trusted friends in other countries. This is a good time to do a digital detox and enjoy the extra time with our families.

We will continue to send updated advice to our insiders via email, and we are planning on hosting more online training to serve our investor community during this time.