Landlord Changes Due to Covid
The housing market has generally been an accurate indicator of the health of the economy. However, the Covid pandemic has caused a great disturbance. As a result, rental market trends are no longer as predictable as they used to be. This article focuses on three significant real estate developments since 2020 that have directly impacted the industry. It is a guide for landlords, homebuyers, and renters alike.
Home Ownership vs. Rental
One of the greatest fears when the lockdowns began was the assumed collapse of the real estate industry. The consensus was that businesses would fail and the resulting unemployment crisis would wreak havoc on both mortgage and rental payments. However, a combination of factors proved otherwise.
Landlord Changes
With many businesses closed, the employed ended up with more disposable income. The federal government's paycheck protection program, paired with lower interest rates, helped to circumvent mortgage defaults. Consequently, home prices rose, and many renters made the leap to homeownership. That is good news for aspiring homeowners but less welcome for landlords already facing an uphill battle to collect rent. The situation was exacerbated by the federal eviction moratorium. It limited income for landlords while not alleviating the situation with a concurrent freeze on property taxes and similar expenses for them. With the recent conclusion of the moratorium, we could see rents fall as renters move to ownership, and there is a glut of available rental housing.
Attitudes Towards Renters
While the eviction moratorium was a godsend for many renters, it was catastrophically lopsided for many landlords. They were still required to invest in property maintenance as well as fulfill their federal tax obligations. Unsurprisingly, 21 months of no income have seeded some acrimonious landlord-tenant relationships.
Moving forward, landlords are likely to apply stricter tenant criteria during the approval process. As a result, prospective tenants will have to up their game with a solid financial and rental history and be able to supply reliable references. Renters who have managed to maintain regular payments despite the upheaval are highly sought-after. Landlords may even freeze annual rent increases to dissuade responsible tenants from finding new accommodation.
Embracing Digital
While no one doubted that contactless digital interactions are the future, the lockdowns steeply accelerated their adoption in virtually all aspects of daily life. Both landlords and renters should expect that their counterparts may prefer to avoid in-person interactions for the immediate future due to Covid. Fortunately, digital alternatives already exist for home viewing, interviews, payments, document verification, and signing.
Apart from risk mitigation, these digital options are convenient for time-saving purposes. With the majority of them being free to use, they will inevitably be widely embraced in the coming months and years.
Please contact us today if you have any questions about being a landlord in today’s unstable housing market.
