If you are anything like most Sacramento real estate investors, you are probably wondering what the long term effects of the CoronaVirus crisis will have on your rental portfolio. Not knowing what to expect in the weeks, months, or even years to come can make it very scary! In fact, not knowing if you are going to experience mass evictions and move-outs may have you stressed to the max.
The truth is that while the entire real estate industry will be impacted in one way or another, not every market will be impacted in the same way. If you have been wondering what new trends and behaviors you can expect from renters in the Sacramento area, this article is for you.
How Much Can You Help Tenants Help You?
At this point, landlords are handling rent deferrals on a case-by-case basis. Although you want to be sensitive to hardships, the truth is you still need to pay your own bills. If you are experiencing any trouble with paying the mortgage on your rentals, the first thing you need to do is check to see if your bank will allow for any forbearance with your mortgage payments.
If you have not already, you should also send out an immediate notice to all of your tenants outlining your policies and expectations will be regarding late payments, move-outs, evictions, etc. Since tenants have up to 120 days after May 31st to resume their rent payments, the sooner you help everyone to plan ahead, the better off you will all be. It is important to remind tenants that although they can delay their rent by 4 months, that does not forgive the payments altogether and they will still need to pay back the amount owed at that time.
A Mass Migration Of Renters
Perhaps one of the most unexpected outcomes or trends that has emerged as a result of COVID is the mass migration of people from cities to suburbs. With the general public opinion that it is safer to live in more rural communities, more and more people are making a move to the burbs. This means that there will likely be a spike in available rental units in urban areas, as well as, tremendous opportunity to scoop them up at a great price. After some time, the sting of germophobia will wear off and this trend will likely evaporate. But for now, it creates some financial opportunities for Sacramento real estate investors and landlords.
Providing Resources & Amenities For Profit
The standards that tenants are willing to accept are also going to change in one of two ways. Either they will become more demanding as financially secure renters with plenty of units to choose from or they will become more tolerant as financial victims of this crisis. More than ever before it will be challenging to attract tenants without an eviction record and landlords will need to carefully consider how they approach those with an eviction record as a result. Will you be willing to overlook a COVID-induced eviction? If so, to what extent. These are the questions you need to begin asking yourself as a Sacramento landlord moving forward.
The Best Way To Protect Yourself
There is so much more to being a successful buy-and-hold real estate investor in Sacramento than simply collecting rent and paying your mortgage. You need to have a full-blown business plan and financial strategy in place to protect yourself and plan for the future. Two ways in which we have both saved Sacramento landlords a fortune and helped them capitalize on this opportunity is to have a savings plan and suggest obtaining special insurance to protect you when your tenants can’t pay.
If you would like more information on how you can better protect your Sacramento real estate portfolio and learn how to leverage it for more growth, contact Alpha Property Management today.