Top Challenges for Landlords for 2022 and Beyond
As the Covid 19 pandemic shutdown eases during these last 6 months of the year, many of us are looking ahead to 2022, where perhaps, everything is back to normal.
Yet, 2022 will likely involve a new normal. Certainly tenant expectations of delaying rent, not paying rent in arrears, and not being evicted will persist. The political climate may not change. This could weigh on profits as landlords yearn for a return to profitability.
And 2022 will be the year of technology innovation in landlord software. If a property management firm is attacked by ransomware criminals, that will create a big push for secure software platforms. Also landlords want to simplify their workload and they want financial tools to control costs and forecast their revenues.
The demands on software platforms will increase, and secure, powerful, cloud-based, modern solutions must come to the rescue.
The Pressure to Upgrade
Those landlords who haven’t evolved to modern landlord software will feel increasing pressure to do so. The workload will rise, regulations will pressure, need for real time reporting, and the speed of change seems only manageable through software automation. So this is good.
Simplicity will be sought and landlords will see the value in simplified yet powerful software. Normally, those two are not in the same solution. They’ll be taking a closer look at ManageCasa for that reason.
2022 Changes Coming
In 2022, we’ll see the easing of eviction moratoriums, and rents will likely rise, perhaps faster than home prices, which may moderate. The rise of rents with eviction enforcement would definitely increase turnover, legal action, rent refusal, and other issues. Some tenants are recovering from the recession while others are awash with cash. Market forces will return and rents begin to surpass home price rises (and landlord’s existing mortgage rates).
One question is how long the eviction moratorium will be extended given landlords want to be paid and even raise rents after a long period of no increases? It will be a difficult decision for governments and likely landlords will take another big hit to their wealth. In 2022, tenants and landlords will once again realize that property rental is a business and normal market forces must return.
Some people believe challenges are opportunities
Top 6 Challenges Ahead for Landlords
Let’s look at the big 6 challenges ahead that you’ll be handling with aplomb if you’re using ManageCasa property management software.
- late rents and rent arrears — a vexing problem due to the pandemic as so many fell behind in their rent payments. This may continue into 2022. Landlords will need to use software to put payments on auto, and hire rent collection services and lawyers to capture the funds in arrears. The rest has to be written off as a loss.
- renter mobility and work from home raises vacancy related losses — dissatisfied renters wanting more out of their lives, will seek cities, towns, buildings, homes, and neighborhoods that offer a better work/lifestyle balance. They’ll be weighing their options, guided by valuations of cities and neighborhoods, before they move. The new work world is decentralized and mobile, not in a central office in the CBD. This means an increase in turnover related losses for landlords).
- demand for larger roomier homes — the work from home era and growing demand from Millennials forming new families means a lot of demand for bigger homes. Since apartments aren’t being made bigger, the demand is mostly for attached townhouses and single family houses for rent. Rent prices for 3 and 4 bedroom houses remains solid. 1 bedrooms will be tougher to rent. You may have to reno a bit, or be very persuasive in your online marketing.
- growing rental supply — new construction will pick up now that vaccines are enabling workers to return to construction sites and suppliers to ramp up production. New properties means opportunities to provide units with improved amenities thus higher rent prices. Landlords will be pressed to sell and buy to acquire the best type of rental property).
- rising service costs and higher financing costs — with inflation and rising interest rates along with rising service fees, material costs, and financing challenges, landlords will be using their accounting software to calculate better deals, and find a profitable arrangement.
- higher taxes — a perennial problem that is going to be more severe in 2022. While government’s cite wealthy landlords as their target, nearly all landlords will be paying more. Landlords will be challenged to find ways to cut their tax losses and many will look to buy in the best cities in low tax states such as Florida and Texas.
Use Technology and Strategy as Part of Your Rental Income Business Plan
Some landlords are looking to technology to make managing units ultra-efficient. This will fuel the demand for landlord software which by the way is in a boom phase. You’ll find managing these challenges are easier with a modern landlord software.
Take a moment to explore the ManageCasa blog. Find innovative, creative ways to stay ahead of the crowd using strategy, tactics, tips, and technology. See the posts on collecting rent, setting up online rent payment, managing your property accounting and banking fully digital, and why simplified property management software is the big trend. And if revenue is an issue, find new rental income revenue sources.
Small biz landlords need better landlord software too. You can trial ManageCasa for free. Take the opportunity now to explore its features and how property management automation will make your business more successful.
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