{"id":15788,"date":"2020-06-04T15:15:00","date_gmt":"2020-06-04T22:15:00","guid":{"rendered":"http:\/\/www.roryc.ca\/blog\/?p=15788"},"modified":"2020-06-04T12:47:13","modified_gmt":"2020-06-04T19:47:13","slug":"what-investors-landlords-need-to-know-about-covid-19-effects","status":"publish","type":"post","link":"https:\/\/www.roryc.ca\/blog\/2020\/06\/what-investors-landlords-need-to-know-about-covid-19-effects\/","title":{"rendered":"What Investors &#038; Landlords Need to Know About COVID-19 Effects?"},"content":{"rendered":"<p style=\"text-align: justify;\">The COVID-19 pandemic has changed the way we do business and caused economic effects worldwide \u2014 the United States is no exception, infecting more than 1.6 million and causing more than 100,000 deaths as of late May.<\/p>\n<p style=\"text-align: justify;\">While the novel coronavirus is a health issue, its implications have been seen through skyrocketing unemployment rates, a taxed healthcare system, and economic strains due to shelter-in-place orders. While Americans were already deeply in debt even before the pandemic, they\u2019re now taking on even more debt.<\/p>\n<p style=\"text-align: justify;\">Clever Real Estate recently launched its COVID-19 Financial Impact Series \u2014 starting with a survey at the end of March of 1,000 homeowners and 1,000 renters \u2014 to temperature check Americans\u2019 financial health.<\/p>\n<p style=\"text-align: justify;\">While the effects were somewhat fresh at that time \u2014 the pandemic was just spreading to the U.S. \u2014 survey results from the end of April were even more concerning, as some Americans have been out of work for over a month. Clever will continue its survey at the end of every month during and after the lockdown.<\/p>\n<p style=\"text-align: justify;\">For now, let\u2019s look at what investors and landlords need to know about COVID-19 and its effects on the housing market.<\/p>\n<p style=\"text-align: justify;\">Buyers are skittish<\/p>\n<p style=\"text-align: justify;\">While some markets may be more sheltered from the effects of the pandemic than others, overall, we\u2019re seeing buyers and sellers hold off for the foreseeable future. In March, 84% of prospective buyers were still planning to buy, but had started looking for bargain buys or postponing for just a couple months. In April, nearly 40% of potential buyers said they\u2019ve stopped their search indefinitely \u2014 making them 5.5 times more likely to put a hold on their home buying plans for \u201cthe foreseeable future.\u201d<\/p>\n<p style=\"text-align: justify;\">Potential buyers may have also dipped into saving \u2014 which may have also served as their down payment \u2014 and will need to begin looking at options of purchasing a home without the traditional 20% down payment.<\/p>\n<p style=\"text-align: justify;\">With renters especially hurting during these times \u2014 64% are concerned about simply being able to pay their rent and they\u2019re 1.4x more likely than homeowners to have lost their job \u2014 those who may have been looking to make the move from renting to buying don\u2019t plan to anytime soon. Nearly one quarter of renters are delaying buying a home as a result of COVID-19. Fifty-three percent of renters said they\u2019re concerned that they won\u2019t be able to afford to buy a home in the future due to the economic impact of the pandemic.<\/p>\n<p style=\"text-align: justify;\">One caveat is those with adequate funds who may wish to purchase a second or vacation home in case they see another wave of cases in their home state.<\/p>\n<p style=\"text-align: justify;\">Sellers are skittish<\/p>\n<p style=\"text-align: justify;\">Sellers are also nervous to list their homes on the market\u2014 approximately 25% of those planning to sell their homes this year said they\u2019re putting off selling for \u201cthe foreseeable future\u201d as a result of the pandemic.<\/p>\n<p style=\"text-align: justify;\">Aside from the difficulty of showings and open houses while shelter-in-place orders were in place around the U.S., sellers could see a smaller buyer pool, possibly resulting in a lower selling price than they had previously expected. More than half of those surveyed were concerned about the value of their home as a result of the coronavirus pandemic. If sellers were looking to also be buyers and upgrade their home, the uncertainty in both job security and health surrounding the pandemic may account for sellers holding off.<\/p>\n<p style=\"text-align: justify;\">Renters are struggling<\/p>\n<p style=\"text-align: justify;\">If you\u2019re a landlord, you\u2019ve probably already seen that renters are being heavily affected by the effects of COVID-19. Prior to the pandemic and now, nearly 50% of renters are living paycheck to paycheck. While many have received assistance in the form of unemployment or stimulus checks, many say it\u2019s not enough to keep them afloat.<\/p>\n<p style=\"text-align: justify;\">More than 40% of respondents are currently receiving unemployment benefits, roughly 20% said they had applied for them, but hadn\u2019t received any yet. After dipping into what little savings to pay bills over the last couple months, landlords may start to see even more tenants having trouble paying their rent.<\/p>\n<p style=\"text-align: justify;\">Outlook for the future<\/p>\n<p style=\"text-align: justify;\">While overleveraged landlords may have a difficult time paying their debt service if tenants are unable to pay, this may present an opportunity for investors looking to buy in or even those still looking for a new home to take advantage. Depending on how long businesses are closed or not open at full capacity will determine if tenants are able to make rent and thus, if residential landlords will need to sell off some properties to decrease risk.<\/p>\n<p style=\"text-align: justify;\">If you\u2019re an investor looking to expand, it may become a good time to purchase discount properties. Over leveraged landlords may be looking to reduce risk in their portfolio by selling some of their properties or unemployed homeowners may be foreclosed on by their lender or looking to avoid it by selling quickly.<\/p>\n<p style=\"text-align: justify;\">Despite record-low interest rates, lenders have already begun tightening restrictions so loans will be harder to get for both home buyers and investors. If you do find good investment deals, be sure your cash flow is solid and provides a bit of a buffer, as Americans may still struggle to pay their rent for some time.<\/p>\n<p style=\"text-align: justify;\"><a href=\"https:\/\/realtybiznews.com\/what-investors-and-landlords-need-to-know-about-covid-19\/98758956\/\" target=\"_blank\" rel=\"noopener noreferrer\">What Investors and Landlords Need to Know About COVID-19?<\/a> by Thomas O&#8217;Shaughnessy | Realty Biz News<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The COVID-19 pandemic has changed the way we do business and caused economic effects worldwide \u2014 the United States is no exception, infecting more than 1.6 million and causing more &hellip; [<a href=\"https:\/\/www.roryc.ca\/blog\/2020\/06\/what-investors-landlords-need-to-know-about-covid-19-effects\/\">read more<\/a>]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[],"class_list":["post-15788","post","type-post","status-publish","format-standard","hentry","category-real-estate"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>What Investors &amp; Landlords Need to Know About COVID-19 Effects? 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