Get a solid start by understanding the business - and the opportunity for investors and landlords
Understanding Your Tenants
Preparing Your Property
Welcome – Before We Begin
Today’s COVID-19 real estate market is about as unprecedented, as they come. When was the last time millions of people lost their jobs in the space of a few months? When was the last time renters were unable (or unwilling) to pay rent – en masse? When was the last time the government prohibited landlords from evicting their tenants?
If you answered never, we’re on the same page.
At the same time, as of this writing on November 27, 2020, there’s talk of the U.S. running out of housing inventory. In late September, 2020, the National Association of Realtors (NAR) reported that existing home sales had hit a 14-year high in August. And if homes continue to sell at the rate they’re at, according to Business Insider on November 25, the United States would run out of new homes inventory in just a few months.
What is going on?!
Nobody expected the real estate market to perform at all during the early days of coronavirus pandemic. People were saying, because of limits on in-person showings, market activity would slow down. They said that because of lost jobs, people wouldn’t be able to get mortgages. They said that nobody would want to do anything – buy or sell – because of all the uncertainty.
And they were partly right… in some places. Lockdowns have kept some people at home. Fear of infection has kept people from attending open houses in person. And with unemployment at a historic high, who has the money to buy a house?
And yet, home sales are up. The market is booming. Experts keep warning about a “bubble” (when don’t they?), and with all the forebearances for mortgages in place, which will eventually come due… potentially leading to a sharp increase in foreclosures.
Yeah, it’s pretty crazy.
So, what’s an investor like you to do? You know the stock market is unpredictable, and real estate offers a great investment alternative that appreciates over time and provides significant tax benefits, if managed properly. You know that rental properties can be a good source of ongoing income over the long term. You’ve heard all the testimonies about how people are cashing in on short-term rentals.
But still… there’s plenty to discourage you (and lots of other people) from diving into investing in rental properties. And rightfully so. In these uncertain times with quarantine restrictions and lots of unknowns about how COVID-19 spreads, how can you effectively manage your rental property? Does it even make sense to own a one, right now? After all, if tenants don’t pay their rent, and you can’t evict them, isn’t a rental property a potential losing proposition?
We believe All-Ready Rented offers a great hybrid solution for individuals who wish to take advantages of the tax breaks of rental properties, while building long-term growth and minimizing their exposure to pandemic-era risks:
Renting to travel nurses
They’re professionals who need safe, secure, comfortable housing, while they’re on a 13-week rotation with a hospital. They receive stipends to cover their rent, and many landlords have wonderful experiences renting to them. They can be clean, conscientious, and leave the property in great condition at the planned time, which is a welcome change for many short-term rental owners. And because travel nurse housing tends to rent at above-market rates, some landlords will only rent to travel nurses, because it’s the only way they can be sure they’ll cash flow.
For all the upsides of investing in travel nurse rentals, be aware that there are additional demands.
- The properties you invest in must meet strict criteria. They must be in the right location, they must be the right size, and they must have specific amenities to be attractive to your future tenants. Failure to follow the guidelines (which we detail in later modules) can make your rental unsuitable for travel nurses and unprofitable for you. Don’t worry – we guide you through the best practices to follow.
- When renting, you (or you property manager) must be more hands-on with nurses as you screen them and arrange for their occupancy. You can’t simply list the property and leave it at that. It’s more similar to renting to long-term tenants, just repeating the screening process every 3-6 months. You can’t just “set it and forget it”. We’ll explain later how to best manage this – it’s not rocket science, but you have to follow certain steps to do it well.
- There’s a different set of contingencies to plan for. Sometimes nurses’ assignments change at the last minute. Or they need to extend their stay. You may be inundated with inquiries about your property, even though it won’t be available for another three months. And inspections and/or maintenance should be conducted regularly at specific intervals. Travel nurse renting is similar to both short-term and long-term renting scenarios. Fortunately, if you own a property that proves attractive to tenants, you can quickly pivot to compensate for any changes in plans or occupancy. And while differences in maintenance schedules may take more planning, ultimately (as we’ll discuss later), it works in your favor.
You may decide, after weighing the pros and cons, that you don’t want to take on the different level of effort required for successful travel nurse rentals. And that’s okay. We’d rather see you make an informed decision and not commit to a path you can’t support. No one is served by that.
As with anything, there’s no such thing as a free lunch. And while travel nurse rentals do offer the potential for increased cash flow and the kinds of tenants you love to rent to, be aware that there’s a different level of property and tenant management involved. We think it’s worth it, though. And the extra effort can lead to deeper rapport and ongoing friendships with your travel nurse tenants – a personal connection and “emotional paycheck” that you just can’t get from an average short-term rental guest, or some long-term tenants.
We’d love to see you seriously consider this model. And to help you reach your goals, we offer in-depth resources and insights to help you work through the logistics of selecting, financing, furnishing, and renting out your travel nurse properties. Every challenge hides an opportunity, and we’re here to help you navigate the process successfully.