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 Property Management
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As we are once again locked down here in December and possibly longer, this means nothing but trouble as we transition into 2021. PREDICTION & FACT = we are not going to have 95% or more in rent collections going into the new year because Governor Newson’s shut down is going to have a negative effect.
PREDICTION = we are going to have higher vacancy rates. Everyone is predicting that. Wait, I think that might be a FACT and what happens when the vacancy rate goes up? Yes, you’ve got it - the prices of rentals come down. The only way to compete will be to lower your asking rents. So, what do you do? You try to keep your good tenants - do you see the theme here? Keep your good tenants.
PREDICTION = is that we will go into a recession.
I would say that is likely but not a fact. What we do know right now is that many people are hurting for money while we see others spending like money grows on trees. FACT = either way, we should assume that things could get harder and we should not be spending money frivolously. We need to only spend money on what will give us a return on our investment. An example of spending money for investment return would be to invest in your good tenants and to make sure you are renting to good tenants which means having a very strong screening process.
PREDICTION = people will want more amenities, more square footage, and more outdoor space. We have no real way of knowing exactly what our tenants truly want right now. When I think of
greater square footage, I think of more to take care of and when I think of more land, I think of country living which is not for everyone. FACT = what we do know is that people need safe, comfortable places to live and we can provide that. What we offer as residential landlords is just as important as access to food and medical care.
● PREDICTION = We will need to rethink our expectations and our budgets, and this is probably true.
● FACT = we will not know what the new normal will be for a long time. Probably not until 2022.
Here are some predictions for 2021 that have been made by other real estate industry experts:
● Drop in Demand and an Increase in Renewal Rates – Brian Zrimsek, MRI Real Estate Software
If the coronavirus crisis extends beyond April, we can expect lower demand for vacant units. We can expect more folks to stay in place as economic unrest will cause people to be cautious. Staying in place may be seen in the form of higher renewal rates, at prices capped by rent control measures in some markets, or more folks going month-to-month until they have clarity in their own personal situation.
● COVID-19 Expected to Slow Rental Market for 3 to 6 Months - RentCafe
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