It’s now almost a year since the Covid-19 initially began to spread throughout the country, affecting every single person in one way or another. In a matter of weeks, people’s lives and businesses have felt changes in ways they never imagined.
As the economy has undoubtedly taken a hit from the pandemic, the real estate market has not been spared. It’s no longer business as usual in most real estate companies. There are concerns like preserving liquidity and value, complying with various governmental agency requirements, and increasing cleaning measures to keep tenants and visitors safe.
Some other direct impacts and changes caused by the Covid-19 on the real estate and property management services include:
- Eviction pause for non-payment by tenants if the coronavirus pandemic causes the failure to pay
- Change in repayment agreements where rent is still due must be repaid, even though eviction is paused.
- Landlords could be sued if they illegally lockout a tenant without initially going through the court system.
- Temporary waiver of late fees.
- And more.
Beyond this, many real estate and property management services are under pressure to look towards the future and see which areas of their business have the potential to improve in this new normal and become profitable.
Effects of Covid-19 on Real Estate and Property Management Services
Within this period, the main challenges of real estate and property management services that have tested the resilience and grits of property managers are the shift in the expected revenue growth and profitability. Most people are now adopting a more observing approach while waiting to acquire new properties in the reopening parts. You want to checkout localdwelling.com.
Fall in anticipated revenue growth
Compared to the Pre-Covid-19 period, especially within the past four years, a lesser percentage of property managers now expect an increase in revenue over the next few years. However, it’s important to note that even as significant as this decrease is, 3 in 4 property managers are still anticipating revenue growth despite their challenges.
While more third-party managers expect their revenue to grow in the next two years, lesser homeowners share this expectation.
Negative impact on profitability
As many residents experience financial struggles caused by Covid-19, property management services are now forced to put revenue growth on the side-lines. They have to do their part to aid the residents in weathering this unexpected crisis, even if it means waiving fees that constitute a significant source of revenue to their business like convenience fees or late fees.
Most property managers now have to establish a plan with the residents who cannot pay their rent in full. Property management services might not have been getting their total management fees paid, even while rental properties’ running cost increases year after year. Some even manage to keep rent flat or offer concession upon lease renewal.
With eviction paused and lack of rent increases or filing fees, the real estate and property management services have felt drastic effects from the coronavirus pandemic.
However, despite all the uncertainty, this pandemic provides an opportunity to reevaluate and restructure the entire real estate industry. We see it as a good time for property managers to promote a reshaping of the policy and practices that may include technological innovations just until there’s an opportunity to thrive again.