When the pandemic hit, many people were forced to stay inside their homes to avoid contracting the virus. For some, it was uneventful as they only had to keep themselves in their properties.
But for home rental businesses, many renters were bound to their rental homes. Landlords were negatively affected as many people lost their sources of income, and many rental fees were delayed. Many were evicted and were left homeless due to being unable to pay for their rents. Meanwhile, some kept their living spaces but could barely pay the full rent while making ends meet. This is how the pandemic changed the existing home rental industry.
As the pandemic is starting to let up, restrictions are slowly being lifted, and more people are starting to recover from the unexpected loss of income. The near future is still uncertain due to most businesses moving towards online and contactless transactions. These innovations for people’s safety are drastically changing the home rental industry both for the worse and the better, depending on how people choose to deal with them.
Foreseen Trends in Home Rental Industry
Higher Rent
A home rental business will always have associated risks. As the virus is still rampant and far from being eradicated, landlords and rental business owners might continue to experience the slow income from their renters. As such, landlords are further forced to increase the rent on their occupants and are expected to continue doing so even after the pandemic. This is due to the predicted increase in demand in owning properties as the years go by.
Missed Rents and Evictions
Many people are still adjusting to the economic plunge. Thus, many renters may still miss their regular home fees. The previously missed rents may be starting to accumulate, but landlords can do nothing but wait for their renters to catch up with their payments. But when landlords can no longer sustain the bills on the property for tenants who cannot pay in full, evictions might be their last resort to save themselves from further financial losses.
Foreclosures
Many rental business owners may also have their lands foreclosed. This is a direct result of the accumulation of unpaid fees by the renters, which can hurt the landlord as well. These cases may be complicated as the assistance of a foreclosure lawyer may be necessary for owners to keep their properties after not being able to pay their mortgages.
But this also comes as an opportunity for property hunters as many foreclosed properties can be sold at lower prices, making better deals for real estate people. Some will flip these properties by fixing and furnishing them, adding value in the process for higher returns once they put them back on sale in the market. Others will fix them up to retain rental spaces. But this business in real estate is still a risk that requires much research and experience to find good profit and success.
Leaving the Cities
People who flocked to the urban cities and rented almost every possible space to live in the previous years are now thinking of going back to their family houses because of the viable option of working from home even at long distances.
This convenient adjustment to many work settings helps many employees avoid renting small and expensive living spaces in major cities where their jobs are based. In turn, rental homeowners find fewer people who will occupy their properties because a big part of their target market is non-local city workers.
Some still see this as an opportunity due to the decrease in interest rates in purchasing properties. And instead of the employees that move from the suburbs to bigger cities, more and more people are looking to buy properties for permanent family residences.
Return of Student Housing
Student housing also played a part in home rentals, which plummeted as virtual education became the norm in the past year. Schools and universities have now seen the importance and effectiveness of online classes. But even if it is clear that virtual education will be used continuously and student housing may see less demand in the following years, many investors are reportedly still buying and building off-campus housings as preparation for the possible return of the students to their classrooms.
Is It Wise to Enter the Home Rental Business Now?
With the predicted trends mentioned, weighing the benefits and risks is important in the decision-making process of landlords, home rental business owners, and entrepreneurs planning to enter the industry. This line of business never comes without risk. Success will always depend on the preparedness, management skill, and resilience of the person when a crisis like the present pandemic threatens to disrupt the economy.
