How Are Landlords Faring as Summer Begins?
It’s not a bad idea to catch up on the pulse of what’s trending in the rental markets and how landlords faring generally.
Especially, during this phase of the shutdown as some businesses reopen. Some landlords will be dealing with legacy issues from the pandemic for a while. Other landlords appear to have good balance sheets and are managing business fairly well.
Overall, the reports suggest low income tenant landlords are suffering the most, and that more upscale landlords haven’t been hit with rent defaults as yet. However, the pandemic has victims in some previously affluent industries and the carnage may reach them by summer’s end, even as business gains momentum.
The polls suggest tenants are being responsible and not jeopardizing their accommodations by spending money on other things. They’re even paying on time. Let’s hope this continues throughout the summer months.
Property Manager Surveys
A recent survey of property managers suggests the mood is still bright among property managers and landlords. Considering the challenges the rental community is facing, this is a good sign. It was conducted by a software developer so we’re not 100% convinced of its small sampling.
The survey went on to say property managers are adjusting to the situation allowing staff to work from home, doing virtual showings, using video conferencing, controlling expenses, using paperless leasing, retaining tenants, and adopting new technology. Of course, adopting new technology is for the most part property management software.
It’s all perfectly in sync with the trending topics and news we’ve been discussing here on the ManageCasa Blog.
Some new stats are head scratchers. For instance the San Francisco Chronicle surveyed San Francisco Apartment Association members and reported that 97% of San Francisco renters paid their May rent. It’s an impressive stat for a city which has the highest rent prices in the nation. It’s about responsible a tenant base as you can imagine.
The survey commentators put a disclaimer on June rent outcomes though so we’ll see whether San Francisco landlords finally become immersed in the financial shutdown.
They found that only 5.7% of tenants couldn’t pay their rent. That’s a feather in the cap of San Francisco renters and might bring big confidence in the San Francisco rental market as we head into the last half of 2020, and beyond.
In another landlord survey however, out of Kentucky, tenants appear to be well behind on their rent. The survey found 60% to 70% of landlords have at least one tenant eviction in process. 5% had 50 percent of more tenants facing eviction and 3% had between 15 to 20 percent of tenants facing eviction.
Their stats reveal that low income tenant landlords are facing the biggest difficulties so far.
Another survey of 831 landlords by the Washington Multifamily Housing Association found tenants not paying rent increased from 2.5% in March to 10.5% in April. That is a sizable gain so we can expect defaults on rent in June to be much higher as a lot of renters remain unemployed.
The NAIOPWA survey also reported a 71% of office space landlords and 75% of industrial property owners reported that at least 80% of their tenants paid rent. Given the shutdown, these are astonishing numbers. It shows tenants do have a lot of integrity.
The numbers of renters who aren’t or can’t access Federal unemployment payments is not known.
There are many reports of renters not being able to access unemployment checks due to downed websites and other administrative issues. As the rent moratoriums expire and unemployment insurance terms run out, the rent defaults might creep up across the US.
Oregon OBP Survey
In another survey reported by OBP TV, 82% of Oregon renters made a rent payment within the first week of April, just down from 89% from 12 months earlier. This perhaps unexpectedly makes Oregon number one in the US for on-time rent payments. Congratulations to Oregon renters and their landlords.
Landlords businesses are keys to any economy and landlords have been called upon by the government to bear a significant financial challenge during the pandemic. Hopefully the Federal and State governments will make public announcements about how landlords have managed during these times.
While the next few months will present bigger challenges for renters, it’s likely most of these statistical trends for each state will continue.
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