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Today’s Renting Realities
There’s rarely been a more challenging time to be a landlord. With COVID-19 wreaking havoc with people’s daily lives, up-ending the economy, and wiping out jobs that used to be reliable sources of good income, renters and landlords alike are challenged. Renters are finding it difficult to pay rent. Some keep up with it. Others have to break out payments. Still others cannot pay at all. And some… well, they just decide to stop paying rent, because evictions have been prohibited in many parts of the country.
Long-term landlords are feeling the pressure. When evictions aren’t allowed, landlords have no choice but to allow tenants to stay, even if they are causing significant damage to their property. At the same time, their own mortgage still needs to be paid, maintenance has to be performed, and expenses don’t stop happening. But without a steady flow of rent, it’s tough to stay in business.
In fact, many would-be long-term rental investors are steering clear of the business, due to the risks. The last thing they want is to carry multiple mortgages, and not have tenants holding up their end of the bargain. From state to state, restrictions on evictions can vary. Plus, the rights of tenants and landlords are unevenly supported by the courts. Many landlords we’ve heard from have complained that they have nightmare renters they can’t get rid of, even though they haven’t paid rent in months, and they’re also wrecking the property. It’s the equivalent of squatting, but what’s a property owner to do?
Some landlords we’ve heard from have their sheriff’s office on speed dial, the minute eviction restrictions lift. But then, the state extends the eviction moratorium… and they’re out of luck… again… running the risk of losing their primary residence, not just their rental property.
But even when the eviction moratoriums lift, it can be difficult to get a court date. The courts in many states are back-logged, since plenty of landlords are needing evict problem tenants. But courts haven’t all been running at full-capacity, so even when the ability evict is back in play, there’s a proverbial “line around the courthouse” of property owners waiting for their chance to file papers on their renters.
Even when the pandemic lifts, it’s still going to be a long, drawn-out mess, getting long-term headache renters out.
Short-term rental owners have been feeling the pressure, too, from location to location Bookings have been in sharp decline in different areas – either from local laws prohibiting them, or a reluctance of travelers to take a chance on getting sick from their vacation. The short-term market has seen some relief, and many property owners are reporting good numbers. However, short-term renting under even ideal conditions has its risks.
We’re sure you’ve heard all the stories about the guests who don’t follow the rules… They bring more people than they’re allowed. They invite friends (and strangers) to wild parties. They trash the property, even as they send text messages to the hosts about what a “wonderful time” they’re having. They don’t arrive when they’re supposed to. They show up early and want to leave their luggage in the house while they go sightseeing. Or they don’t leave when they’re supposed to, throwing a wrench in the cleaning and turnover schedule. They damage the furniture. They build a fire in the back yard, even though there’s no fire pit. They steal nice things. They break, burn, scrape, scratch, flood, shred, stain, and otherwise trash any number of items in the property.
And they complain. Either there are “no knives” (they never looked in the kitchen drawer)… or the sheets are too scratchy… or there’s a smell in the house… or they complain about the absence of features that you specifically told them were not there. They give bad reviews, which impacts your rating on the rental site. And then they ask to come back – at a discount.
Should something really go wrong, and complaints are filed, the rental sites often side with guests, not hosts. That means you can end up not only sustaining damage with a whole lot of extra aggravation, but you also don’t have the recourse you deserve. You may be 100% in the right, but because of the tenant-bias of many rental sites, you can’t get the justice you need. You’re out of luck. Because those short-term rental sites have the market locked up, you’re pretty much at their mercy. It’s a horrible feeling. And it’s causing many property owners to rethink – or leave – their short-term rental business.
Once upon a time, owning a rental property could be a path to building long-term, generational wealth. It was a way to generate a regular stream of income and realize tax advantages. Now, for many people, it’s become more of a liability than an asset. And landlords are selling. They’re getting out of the business.
But their pain doesn’t need to be your drama. There is a better way, and we’re about to dive into that.