It has been a rollercoaster of a year for renters and landlords in the United States. On August 3, tenants in vulnerable situations were saved by the bell yet again as President Joe Biden and the CDC issued a 60-day moratorium on rental evictions. With Delta variant infection numbers rising by the day, the eviction ban acts to keep families in their homes and provide some form of stability for people who are already in distress. Job losses and the corresponding financial hardships have led to some Americans struggling with their rental payments over the course of the pandemic. According to recent studies, over 6.5 million households in the country are late with their rent, owing approximately $20 billion in total.
While it may be easy to blame landlords for continuing to seek payments during such dire circumstances, it is often overlooked that many landlords themselves are small-scale investors of the ‘mom and pop’ variety. Unlike massive real estate corporations and investment trusts that own numerous properties and have the deep pockets to help cushion their losses, individual landlords often rely heavily on rental revenue to cover costs. It is estimated that half of the rental properties in the US are owned by individuals—who need to keep up their property insurance, taxes, and building maintenance costs even as their tenants withhold rent. In addition, most of these individual landlords are still expected to pay the mortgages on their properties with no access to credit or federal assistance.
Where The Heart Is
The residential rental market is an important stepping stone for many fresh home leavers and an essential way to save up for a down payment for aspiring homeowners. Based on Census data, 35.9 percent of residential property in our country is renter-occupied, with the renting population generally younger, more racially diverse, and earning a lower wage. Since renters do not have to pay for maintenance or repairs and are exempt from property taxes, renting is the de facto choice for people with less disposable income. Likewise, rental properties are one of the only available choices for people with poor credit scores such as immigrants or those from underprivileged backgrounds.
That said, having a lack of cash is not the sole reason why some people prefer to rent. The apartment rental market is growing faster than the rest of the rental industry as people opt for hassle-free housing solutions, particularly in urban areas. Another perk of renting an apartment is the access to coveted amenities such as a swimming pool or fitness center that would otherwise cost a pretty penny. Some people also prefer to rent as it affords them the flexibility to move as their circumstances change or to experience a locale—such as Manhattan—that they could never afford to buy a property in. International and out-of-state students similarly benefit from rental arrangements as they only plan to be in the neighborhood for a handful of years.
With over a hundred million Americans living in rental housing, the residential rental industry is an undeniable part of our country’s housing formula. While free universal housing and controlled property prices are a lovely pipe dream, the reality is that the residential rental industry must continue to serve the housing needs of the population.
Make Yourself At Home
Given the strenuous situation that landlords are facing at the moment, renting out your property can seem more of a pain than it is worth. However, there are some definite perks to becoming the proverbial landlord. The most evident being that having a property up for rent provides a revenue stream that can supplement your current income and help you pay off the mortgage on the property itself. Using rental income to bankroll a mortgage is a smart way to have someone else help you purchase a property. Furthermore, you stand to reap sizable rewards when property values rise in the future. Of course, that does not negate the stress and worry of property management and finding tenants. Thankfully, there are some services geared towards assisting all participants in the rental relationship.
Finding a trustworthy tenant is the most critical step in having a successful rental experience. Some businesses provide the service of checking rental applications and credit ratings and can even help landlords check for any criminal backgrounds or eviction histories. After acquiring an agreeable and reliable tenant, landlords can take extra steps to protect their tenant’s property by inviting them to purchase renter’s insurance. Renter’s insurance differs from a landlord’s property insurance as it covers the tenant’s personal items and liability. It is a way to ensure that tenants receive greater security for their belongings and encourages them to take better care of their living environment. Renter’s insurance also covers any increased housing or living expenses incurred by the tenant in the unlikely event that the property becomes uninhabitable.
According to predictions, the economy and residential rental market are set to soar as vaccinations roll out and people return to work. While some Americans may still experience trouble meeting rent, most are doing well enough to drive the expanding residential rental market. With the support of the services available, landlords and tenants can continue to have a mutually beneficial relationship with an added peace of mind.