There’s no doubt that coronavirus has reshaped the multifamily real estate market within the last 60 days because most renters across the United States who live in multi-family properties are now furloughed and may be unable to temporarily pay their rents without assistance.
Thankfully, recent data from the National Multifamily Housing Council (NCHC) shows us that roughly 84% of renter households across the United States have now made their April rent payments.
This data is far better than the statistics that came out at the beginning of April which showed that only 69% of renters across the United States had paid their rents.
The change in statistics could have a lot to do with the fact that most renters received their economic stimulus payments and were able to apply most (or all) of the $1,200 payment that they received towards paying their rents.
The Rental Market Remains Stable
Multifamily Real Estate Investors have been watching the rental market very closely over the last 60 days wondering how it will respond to coronavirus.
The good news is that as of today, the rental market has remained fairly stable, especially when compared to statistics from the same time last year which shows that only 90% of renters nationwide were able to pay their rents.
One thing that the National Multifamily Housing Council data has shown us is that landlords across the United States are also adjusting payment schedules and have been working with their tenants to create payment plans based upon each renters individual needs.
This is good news for the rental market because coronavirus has shut down much of the economy across the United States and made it next to impossible for many renters to continue holding on to their jobs unless those jobs are considered to be “essential”.
We’re Not “Out Of The Woods” Yet
With most renters paying their rent for April, multifamily property owners nationwide can continue paying their bills, expenses, and ensuring that their properties will continue to operate safely but, the reality is that even though April has been a stable month, we’re not out of the woods yet.
Multifamily owners should continue to focus on building cash reserves as soon as possible. Why? Even though some states like Florida, Texas, and Georgia, are now in the process of opening up their economies, the United States could see “rolling shutdowns” due to Coronavirus “flare ups”.
Also, even if most tenants can go back to work in May, the jobs that they had before the Coronavirus shutdowns began may no longer exist.
Some companies sadly have gone out of business during the shut down and so tenants who previously had stable employment before Coronavirus may find themselves having to search for employment.
Even though May could be a stable month for the economy, another Federal “bailout” is likely on the way and it’s possible that this could be another stimulus payment that will be paid directly to Americans as the previous one was.
Yes, the economic stimulus payment has directly benefited renters nationwide and made it possible for the rental market to remain stable during April.
Another thing that continues to keep the rental market stable during these trying economic times is section 8 and social security. Recent data has shown that communities that rent to people who are on these programs have reported collecting up to 99% of payments from their tenants that were due during April.
What Multifamily Asset Classes Are Performing The Best Right Now?
If you’re planning on investing in a multi-family investment property within the coming months, you may be wondering which multifamily asset classes are performing better than others right now?
As of April 2020, the productivity of multifamily asset classes varies by the region. For example, Class A and B multi-family rental properties have had a difficult time during the coronavirus pandemic, especially in states like Florida and Nevada, areas of the United States which both have a high concentration of hospitality and leisure employees.
Even though states like Florida and Nevada have been struggling during the coronavirus pandemic, the good news is that economic stimulus payments just started to go out last week and will continue to be sent out over the next week and a half, potentially softening that harsh economic blow that COVID-19 has leveled on these areas.
When it comes to Class C multifamily properties, the good news is that even though this asset class has shown slightly lower performance during the last 60 days, the good news is that the performance of Class C multifamily rental properties isn’t that far off from the performance of Class A and B multi-family properties.
Optimistic About May 2020
Even though the economic landscape nationwide looked bleak in February and March, the reality is that as we had in May 2020, multifamily investors can be optimistic about what this month holds for the multifamily market as a whole.
As of April 21st, we have more states in the process of reopening their economies and getting people back to work. When you combine this with the economic stimulus payment, unemployment benefits, and other payments that are possibly in the works for Americans, there’s reason to believe that May will be an even better and a stable month for multifamily investors nationwide.
Contact Trier Capital
Are you ready to build a portfolio of passive income from multifamily properties? But you don’t have the time to spend on building that portfolio yourself? If so, we invite you to contact us today to learn more about how you can have direct access to tax-advantaged, higher return, real estate investment opportunities.
Contact us today by calling (630) 229-2383 or click here to connect with us online.