Now that the COVID-19 pandemic is basically over, it’s time for real estate investors to pick up where they left off. Prior to the pandemic, the real estate market was fairly normal. However, when the virus started spreading, a large number of laws changed, including landlord-tenant laws.
For many property investors with rental units, the impact of these new laws was heavy. For example, there were several rounds of federal and state rent moratoriums, which made evicting tenants illegal if they couldn’t pay rent because of the pandemic. These moratoriums were great for tenants, but it put many landlords in the hole for thousands of dollars in unpaid rent.
The good news is that real estate is picking up again, although some of the changes have become permanent. With these changes in mind, here are some tips for investors in a post-COVID world.
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1. Have your properties professionally managed
Source: reliantmanager.com
No matter how skilled you are at managing rental properties, nothing beats having a property management company working on your behalf. One of the best benefits is having an experienced team select your tenants.
Los Angeles Property Management Group explains that working with a professional manager helps to maximize efficiency and find the right tenants from the start. The goal is to acquire long-term tenants and avoid the turnover that happens when you rent to the wrong people.
Finding the perfect tenants is harder than it seems. Some people have a clean record with no evictions and good credit, but end up being troublesome in other ways. For example, sometimes “professional tenants” are hard to spot because they often have excellent credit. Their game is to get as much free rent as possible by paying rent for the first month and then they stop. Next, they move from one rental to another, often suing their landlords after setting them up so they can claim a violation (like unlawful eviction). These professional tenants often win their case and end up with no eviction on their record.
The more experience you have with noticing red flags, the easier it is to spot the potential for trouble before signing a lease agreement. For instance, one red flag is that a prospective tenant seems desperate to move in as soon as possible. This is sometimes accompanied by offers to pay rent up front, and that seems like it would be something a responsible tenant does. However, it isn’t always genuine. Once you rent to that tenant, they might pay the first month’s rent and then bail and force you to evict them.
An experienced property manager knows how to spot good tenants
Good tenants are sometimes hard to spot if you don’t know what to look for. Simply finding someone willing to pay the rent isn’t enough. You want tenants who will pay the rent on time and in full and not try to haggle you down in price to get a better deal. There’s nothing wrong with negotiating the rent, but if you accept tenants who are adamant about getting a deal, they’re more likely to expect future deals and object to rent increases.
Hiring a professional property manager will give you the peace of mind knowing they’ll select the best tenants for your properties and they will handle any issues that arise.
2. Know your state’s new landlord-tenant laws
Source: pdalaw.co.uk
Post-pandemic, some landlord-tenant regulations have become state law. Most of these laws are designed to provide additional protections to tenants. It’s critical that you become familiar with these new laws if there are any in your state.
For example, the pandemic inspired new eviction laws in California and Washington state. In Washington, no-cause evictions are no longer allowed and there are only 17 valid reasons for ending a rental agreement, including month-to-month contracts.
It can be challenging to stay up-to-date on changing laws, which is why you’re in good hands when you have a property manager handling your rentals. You can’t afford to make a mistake, especially when it comes to evictions. One small mistake, even with your paperwork, and your case could be thrown out and you’ll need to start the process all over again and do it by the book. You can avoid this by having your properties professionally managed.
3. Look for good deals on properties
Source: which.co.uk
Many property investors had to sell some of their rentals in order to escape foreclosure, but some hung on for the duration of the pandemic to see what would happen. Now that things have settled down, some of those investors are selling properties that aren’t going to be profitable enough to maintain. However, their loss is your gain.
Look for properties being sold by investors who want to cut their losses. You can find some good deals, although interest rates have gone up quite a bit.
If you’re looking to acquire more property, now is the time to look.
4. Connect with a real estate attorney
Source: forbes.com
Since so much has changed, it’s in your best interest to connect with a real estate attorney to reorient yourself with how you’ll handle legal matters. There is no room for error when it comes to court proceedings. Anything you do wrong could open you up to losing a lawsuit if a tenant sues you, which makes advice from an attorney priceless.
Connect with a real estate lawyer as soon as possible to get up-to-date on what’s changed in the last few years so you don’t make avoidable, costly mistakes. Now is also a good time to have an attorney revisit your leases and other contracts and forms to make sure they are accurate and legally-binding.
The real estate market is in recovery
Although real estate was hit pretty hard during the pandemic, it’s making a comeback. Most major losses are in the past, so moving forward, you can expect the market to return to normal with the exception of some new laws that will change the administrative side of investing.
