Up until this point, 2020 has been an unbelievably challenging year for landlords and real estate investors dependent on the income that they generate from their Sacramento properties.
With millions of people unable or unwilling to pay their rent as a result of the Coronavirus pandemic, many independent real estate investors and landlords have been left scrambling to pay their mortgages. However, that is not the only way that the pandemic has impacted landlords in the Sacramento area.
The truth is that the coronavirus has transformed the way many Sacramento landlords will do business moving forward on a permanent basis. Some of these changes will be easier than others but no matter what the landscape of being a Sacramento landlord is forever changed.
If you are wondering what the future holds for you, your tenants, and your business, this post is for you!
Sacramento Landlords Need To Rethink The Way They Calculate Profit Margins
If there is any lesson that can be taken from all of this, it is that real estate investors and landlords need to be more diligent about their savings. If you have not started doing so already, you owe it to yourself and your tenants to begin saving a portion of every month’s revenue for emergencies and opportunities like this. Having that extra cash cushion behind you at uncertain times like these will go a very long way to keep you sane, keep you profitable, and keep you healthy. From now on, if you do anything to protect yourself moving forward, start putting money aside every month like it’s a real bill that you owe a creditor.
Diversification Is No Longer An Option
As a real estate investor, you already know that diversification is important for protecting your individual assets, as well as, your overall financial portfolio. Before the Coronavirus swept the globe, diversification was looked at as an option utilized by the wisest of investors. Now however, it should be clear to all real estate investors that diversifying your portfolio both in and outside of real estate is no longer an option.
In fact, I strongly urge you to diversify your real estate holdings as much as you possibly can to prevent being financially devastated by a similar event in the future. Whether it be a global pandemic, economic crisis, or any other major event, diversifying your real estate holdings with different types of investment properties is your best solution for hedging risks.
As you already know, there are people who either make or lose their entire fortune in times like this. Those that have diversified their income streams within real estate will be best prepared to capitalize on the opportunities in any kind of market. For example, right now many cities are experiencing a mass exodus as people search out more rural and seemingly safer places to live. That means, there is an opportunity for investors with the cash flow to go into the cities and scoop up apartments and buildings on the cheap.
Changes To Common Renter’s Policies And Leases
You can also expect to see some at least semi-permanent changes to common renter’s policies and leases for a while. For example, various levels of sanitation and cleaning will be prominently featured in rental policies by landlords hoping to attract those in search of safety.
Another common change that will serve Sacramento landlords is increased requirements for renters. For example, more stringent financial requirements, proof of income, background checks, and security deposit amounts. Landlords that may have only ever charged the 1st month’s rent and a security deposit to move in will start asking for the last month’s rent as well.
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