Strive to Improve Investment Returns When $#!+ Happens

Check out the livestream replay here!

While we can generally agree that government works to serve the people, it sometimes seems they’re out to get us as landlords.

What does this mean? Whether it’s a national mandate to delay tenant evictions or a local decision to limit rent increases, it seems the tenants are the only ones to gain.

It’s not uncommon for people to imagine evil “slum lords” when they summon an image of all landlords. Of course, this is far from true. Most are highly ethical business owners trying to nurture and grow their companies.

It’s true, the past couple of pandemic-infested years have been hard on rental property owners.  Yet, ethical landlords must creatively manage their  businesses while dealing with increased government controls.

Eviction Moratorium
The eviction moratorium wasn’t intended to harm landlords. Congress authorized over $45 billion to help tenants pay their rent during the turbulent early months of the pandemic.

However, local authorities were the ones to disburse the funds, and those folks weren’t necessarily organized to handle it. Thus, only a fraction of the billions passed through to the property owners. Many—especially owners of only a few properties—suffered financially.

Rent Control
Then there are rent control decisions made by state or local governments to slow steadily rising rents. A recent U of MN study indicated about 200 cities in the US and two states have some form of rent regulation.

In the short term, these measures can have a money-saving impact on tenants. Yet the affected communities could see stagnating housing options in the long term, with developers and builders going elsewhere to create new housing units.

Owners of rentals might not be able to properly maintain their units if they don’t have the option of raising rents. Like builders, property investors will steer clear of communities that hamstring their ability to grow.

If the controls are enforced and new units are created, builders will be likely to launch with higher rent prices when they know they’ll be restricted going forward.

Short-Term Rental Restrictions
Another sector that has seen the rules change is short-term rental owners.

Restrictions are usually determined by individual city ordinances, which can limit the number of units owned by any one landlord, restrict rentals that offer units for fewer than 30 days, or ban short-term rentals outright as in New Orleans’ French Quarter. Minneapolis has now instituted a policy.

Still a popular investing strategy, renting units via AirBNB, VRBO and the like has changed very quickly. Property investors with the intent to grow using this strategy must conduct due diligence on their target geographic markets as well as on specific properties.

Join LeAnn Riley’s Real Estate Investing Made Simple Club. Click here to join.  And, check out LeAnn’s YouTube channel for expert input on this and other real estate investing topics.