The State of the Rental Property Market

Summary:

Dave Spooner from Innago joins The Property Management Show to talk about rent payments, whether delinquencies are as bad as we expected them to be in a time of COVID, and what the pandemic has meant for the rental property market and accelerating the embrace of property management technology.

Key Takeaways:

* The number of delinquent rent payments during the pandemic isn’t as high as expected.

* Occupancy is down in most major cities.

* Worst case scenario is a spike in COVID-19 cases and another shut down of the economy coupled with no relief package from the government.

* Best case scenario is existing trends continue and digital property management tech integration accelerates.

* There are fewer barriers to setting up an online rent payment system & now is the time for property managers to implement it.

The Rental Property Market: Rent Payments and COVID-19

To gain insight on the current rental property market, we invited Dave Spooner to join us on the show. Dave is with Innago, a property management software company that helps with the automation of functions like communication and rental payments so property managers can focus on the more complex parts of their business.

Despite what nearly everyone in the property management field predicted, the data coming from Innago and other sources show that nationwide, the number of delinquent rent payments isn’t as high as expected.

For the most part, rent is getting paid, and it’s getting paid on time.

People are suffering economically from the pandemic and the shutdowns, so what’s happening to allow for this?

Two things, according to Dave: owner concessions and government help.

Why The Rent Delinquency Rate Isn’t As High As Expected

Owner Concessions: First, landlords and property managers have chosen to make a lot of concessions. It has become important to collect whatever rent they can. There’s an eviction moratorium in place nationwide through the CDC, which views evictions as a public health crisis.

Landlords know they don’t have a lot of recourse, so they’re collecting whatever they can and working with tenants to avoid larger problems.

Some owners have reduced the total rent that tenants are paying or spreading out the missed payments over the next several months or offering credits. Landlords and property managers are working together with tenants to get some rent coming in.

Net rent may be down, which means the total amount that’s collected is likely lower than it was last year. But, it’s not as bad as everyone feared. The delinquencies are not up in any meaningful way. The market has adapted rapidly to this.

Property managers have largely initiated the concessions that are necessary to keep rent coming in. Good managers have been able to successfully navigate their owners through these unchartered waters. If you caught our podcast with Anna Myers on using data to navigate delinquency and economic uncertainty, her tips are an excellent resource.

Government Help: Second, government aid has contributed to helping people pay their rent. Payments are still coming in because those programs have worked.

Most renters received a $1,200 stimulus. Those who lost their jobs were eligible for unemployment and received a bonus. Those programs did assist with living costs and rent payments. Those landlords who took action to try and offset the economic challenges of their tenants and had renters receiving those supports are in good shape.

Geographic Nuances with COVID and Rent Payments

Real estate is a local business and each market is unique. Some areas in the rental property market are more impacted by COVID-19 than others...