For property investors who rent to tenants, COVID-19 has drastically changed the real estate market. Prior to the pandemic, there were already endless challenges that came with being a landlord. For example, you have to be on alert for professional tenants, manage evictions to the letter of the law, and keep your investments profitable.
The actual logistics of being a landlord aren’t hard, but it’s tedious and time-consuming work. The pandemic has made being a landlord even more frustrating even when tenants aren’t paying rent.
In light of COVID-19, the challenges of being a landlord have grown exponentially. Here’s a list of 5 new challenges landlords face because of the coronavirus pandemic.
- 1. Extreme overwhelm, stress, and anxiety over mortgage payments
- 2. Uncertainty regarding eviction laws
- 3. Virtual open houses and showings have become the norm
- 4. Professionally created 3D Virtual tours are gaining popularity
- 5. Lease terms are becoming more lenient
1. Extreme overwhelm, stress, and anxiety over mortgage payments
Normally, most landlords use their monthly rental income to cover their mortgage payments. However, many landlords haven’t received rent in over a year. The nationwide eviction moratorium has been extended once again through the end of June 2021, which is creating an enormous amount of stress for landlords.
Missed rent is always stressful, but before the pandemic, landlords could just evict a non-paying tenant and rent the property to someone else. As long as the eviction moratorium is in place, landlords can’t legally file an eviction lawsuit.
Being unable to evict a non-paying tenant is probably the most frustrating experience a landlord could have. Landlords have their hands tied with no way to recover lost income as they normally would.
Some investors are paying their rental property mortgage out of their own pockets, but not all investors are lucky enough to have extra cash. If being a landlord was stressful before the pandemic, the stress of being a landlord has hit an all-time high.
Some landlords have their mortgage payments deferred, but without a strong economy, it’s going to be difficult, if not impossible, to catch up on missed payments when they become due.
2. Uncertainty regarding eviction laws
In Texas, people are confused about the validity of the eviction moratorium and eviction laws. The U.S. Constitution is technically not supposed to be suspended for any reason, but lawmakers have done just that. However, Texas courts aren’t recognizing the suspension, which feels like a win for Texas landlords, but people are still confused.
In February 2021, a federal Texas judge ruled that the CDC’s eviction moratorium is unconstitutional. Although the judge wouldn’t issue an injunction to stop the ban, he said he expects his ruling to influence the CDC to end the moratorium.
Some landlords took this as a sign that they can move ahead with evictions, but that may not be the best course of action. It might be legal to pursue evictions against non-paying renters affected by COVID. However, nobody’s sure how this ruling is going to play out. As far as other state courts are concerned, the eviction ban is still valid across the United States.
It’s important for landlords to have a firm grasp on the ever-changing laws during the pandemic. One mistake with an eviction can destroy a landlord’s finances. Having a property management company is an advantage in this sea of uncertainty. Property management teams stay on top of the laws, federal rulings, and know when (and when not) to pursue an eviction.
If you’re in Texas and you need help managing your properties and you want to avoid breaking the law, check out Green Residential’s services. Visit their website to learn more about how they can help you with all your property management needs.
3. Virtual open houses and showings have become the norm
Virtual tours have been around for a while, but didn’t gain traction until the pandemic forced people to stop gathering in groups.
To maintain compliance with social distancing guidelines, landlords are now offering virtual showings and open houses over applications like Zoom and Skype.
Although there is no personal interaction, these virtual showings are proving to be extremely helpful to landlords and real estate agents. They no longer need to get dressed and drive to a property each time someone wants to take a tour.
When someone inquires about a property, landlords and real estate agents can direct them to a web page with an embedded virtual tour on YouTube or another video platform. These videos can also be embedded into listings on popular websites. All the potential buyer needs to do is hit “play.”
4. Professionally created 3D Virtual tours are gaining popularity
While virtual showings and tours have become the standard, they’re generally just basic videos that show a simple walkthrough of the property from a single point of view. While simple videos have been acceptable in the past, people would still visit the property in person to get the full view.
To help create that full view in a virtual setting, investors are creating 3D virtual tours. 3D virtual tours have existed for a while but weren’t popular until they became somewhat of a necessity.
In the past, 3D tours were expensive to set up. It required special camera equipment and knowledge. Now, people can use an app on their phones and follow simple instructions to create their own 3D tours.
For landlords with a bigger budget, 3D camera kits are available for just a few hundred dollars to a few thousand dollars.
5. Lease terms are becoming more lenient
When landlords want reliable tenants with stable income, sometimes they need to ease up on lease restrictions.
Since millions of people don’t have any income, landlords are making exceptions for certain lease terms to secure high-quality tenants. For example, a retired tenant with stable income and money in the bank might be a great match if they didn’t have a dog. Instead of rejecting a good tenant for having a dog, many landlords are allowing pets to make sure they secure a good tenant.
Property investment is full of never-ending challenges
Property investors will always face new challenges; it’s the nature of the industry. Although, with new technological advances in software, those challenges will get easier with time.