Are you thinking about investing in multifamily properties in 2021?
The pandemic has changed the rental market for many investors, especially states like California and New York, the good news is that despite the eviction moratoriums, as of October 2020, 90.6% of landlords nationwide reported that they were able to collect rent from their tenants.
With 2021 fast approaching, most landlords want to know what the coming year is going to bring. This is why in this article, I’ll break down some of the things that we could see in 2021 and I’ll talk about how those issues may affect landlords nationwide.
Make no mistake about it, eviction is on the mind of most landlords.
Even though we’ve been able to avoid an eviction crisis in the United States thanks to the eviction moratoriums. It’s increasingly likely that more eviction moratoriums are going to end and with no extensions to those protections in place, and we could see widespread evictions across the United States.
How will this affect landlords?
Tens of thousands of landlords nationwide have been adversely affected by the eviction moratorium, especially smaller ‘mom-and-pop’ landlords who rely upon the income from their properties to cover their retirement or expenses.
Once landlords can move forward with eviction, we will likely see a wave of evictions in the United States unless the government moves forward with stopping evictions with another moratorium, or a targeted program that will help owners.
Will New Multifamily Construction Increase In 2021?
Another side effect of the coronavirus pandemic has been a decrease in multifamily construction in 2020.
Thanks to recent statistics, we know that multi-family construction is down by roughly 12%, compared to 2019, and the demand for multifamily properties remains high.
If we don’t see an increase in the construction of multifamily properties nationwide, this will be another inflection point for the rental market because when demand remains high, and supply is low, prices naturally increase, and this will make it more difficult for renters to afford rent.
Even though the situation looks bleak right now, the good news is that with the release of the coronavirus vaccine, and more Americans get vaccinated, this could also lead to an increase in multifamily construction because people will be vaccinated and going back to work.
Right now, we can only hope that the Government will be able to live up to their expectation of getting millions of Americans vaccinated because recent stats from the National Apartment Association show that the United States needs close to 330,000 new apartment units built annually, just for apartments supply to keep up with demand nationwide through the year 2030.
Pandemic Related Challenges Still Ahead
Even though many people are excited about 2020 ending, the reality is that the pandemic is still going to be around for a while, and there could be pandemic related challenges ahead.
With those challenges also comes the reality that most people are still going to be wanting to social distance and avoid personal contact.
As you know, it’s a landlord’s job to accommodate their tenants because, if we’re not able to offer them the things that they want, a potential tenant will just look out for an apartment elsewhere.
Some of the things that you can do to accommodate your future tenants in 2021 include investing in digital marketing so that you can show your properties online. You should also consider investing in services like rently.com because this service makes it possible for tenants to self-tour rental properties.
Last of all, but most important, besides investing in digital marketing platforms, and services like Rently, you should also consider utilizing online tools like DocuSign, so that your tenants can sign their leases over the internet.
Besides documents, you should also set up Zelle, PayPal, or another similar payment platform that enables your tenants to pay their deposit and monthly rent online as well.
Waiting For Government Aid
Make no mistake about it, Covid-19 relief has helped to keep the economy afloat and also put money in the pockets of renters this summer.
Sadly, due to the elections, the President and Congress have been dithering when it comes to issuing more relief. They currently are at a stalemate because, Nancy Pelosi, the Speaker of the House, is not willing to bend and accept a smaller relief package then what her Republican counterparts are offering her.
Unless the Democrats achieve a trifecta of having a Democrat President, while also controlling the House and the Senate, we may not see another Covid-19 relief package until March 2021, or they could agree to a package with no direct payments to Americans.
More Changes For Real Estate Investors Under President Biden
Last, of all, I don’t want to end this article without mentioning the changes that Real Estate Investors could face under Joe Biden’s Administration.
While he was a candidate for president, Biden publicly stated that he had every intention of reforming Opportunity Zones, changing 1031 Exchanges, and making changes to the tax code.
Although these changes will affect real estate investors nationwide, the reality is that because of the precarious position that the economy is in right now, it’s unlikely that Biden will make his proposed changes for at least his first year in office, or possibly longer.
Contact Trier Capital
At Trier Capital, we are a private equity firm that makes it easy for you to passively invest in lucrative apartment building syndications.
Finally, you can invest in tax-advantaged real estate without having to deal with the nuance or complication of purchasing and managing a property yourself.
To learn more about the benefits of investing in multifamily real estate with us, contact me today by calling (630) 229-2383 or click here.