As concerns and repercussions of COVID-19 persist, unemployment rates continue to climb, sending shockwaves through the economy. Unsurprisingly, The National Multifamily Housing Council reported that approximately 31% of renters were unable to make rent payments in April.
A 30% Spike: Contrasting April 2020 Rent Payment Statistics with April 2019
In places like New York City and other heavily affected areas, analysts from The New York Times suggest that the rate of missed rent payments could potentially rise to 40% in the coming months. This situation places renters further in arrears, consequently causing difficulties for small landlords who are grappling with diminishing maintenance funds, making it challenging to cover mortgages and property maintenance costs.
Are you already experiencing these financial pressures?
The Real Estate Landscape Altered by COVID-19
While larger real estate firms and Real Estate Investment Trusts (REITs) are undoubtedly experiencing challenges, it's the smaller landlords who often have fewer resources to rely on during a crisis. A CNBC survey has revealed that a significant 58% of small landlords report not having access to lines of credit, further emphasizing the financial strain faced by this group.
Traditionally, landlords have been able to count on the majority of their tenants making timely payments. However, a survey conducted in March revealed a concerning trend, with approximately 54% of renters polled reporting recent unemployment due to the impact of COVID-19.
A growing number of renters are turning to support from their loved ones to navigate these challenging times. With several cities implementing eviction moratoriums, rent payments are no longer an immediate concern for many tenants. This situation may persist for the foreseeable future, and we may witness instances where tenants choose to vacate properties in an attempt to escape heavily impacted areas.
Although we often have confidence in the resilience of our economy, events like 9/11 and the 2008 Housing Crisis serve as reminders that recovery can be a gradual process, and it may take some time before stability is fully restored.
Small landlords often have a closer connection with the individuals residing in their properties compared to large, impersonal corporations. This personal connection can make it challenging to request rent payments when you are aware of the difficult situations your tenants are facing.
The Ripple Effect of Coronavirus on Rental Prices
In addition to a substantial backlog of missed rental payments, certain real estate markets are witnessing a decline in rental prices, and this trend may persist for several months.
In Los Angeles, the price per square foot has experienced a subtle decrease, shifting from $2.51 to $2.49. While this may not appear significant at first glance, the impact becomes more apparent when you run the numbers. In reality, for every 750 square feet of property you own, you're potentially losing $15 in rental income.
In Los Angeles, the price per square foot has experienced a subtle decrease, shifting from $2.51 to $2.49. While this may not appear significant at first glance, the impact becomes more apparent when you run the numbers. In reality, for every 750 square feet of property you own, you're potentially losing $15 in rental income.
Providing Support for Small Landlords During Challenging Times
Numerous landlords find themselves stretched thin as the number of properties they own becomes increasingly challenging to manage, especially as profits dwindle. The diminishing returns from rentals may no longer justify the stress and time investment required.
Creative Housing Duo offers a quick solution for these landlords facing difficulties. We purchase properties rapidly, without regard for their condition or whether they have tenants. Our streamlined process makes selling properties fast and hassle-free, providing you with the opportunity to free up cash flow and regain peace of mind.
In a matter of just a few days after engaging with one of our experienced representatives, you could find relief from the burden of low or non-performing properties.
Creative Housing Duo serves as the intelligent, transparent, and reliable solution for landlords looking to divest from properties that are no longer financially viable, allowing them to concentrate on those that continue to generate income. Reach out to a Creative Housing Duo Representative today to receive a no-obligation offer for your property.
Kommentare