March 2020 Rental And Sales Market Update

In a recent interview, Roy True, business manager of GoldenWest Management met with Brad Seaman of Keller Williams in San Diego, and Ryan Loeding with Keller Williams in Phoenix, over the internet, to discuss what’s happening with the rental market and what renters and owners can expect in the coming weeks.

Coronavirus and Its Impact on The Rental Market

As of March 30th, 2020, the economies in San Diego and Las Vegas have been severely impacted by coronavirus as “non-essential” industries have been shut down.

This means that the hospitality industry, restaurants, Gym’s, nightclubs, movie theaters, and other businesses are now closed and the result has been a dramatic increase in unemployment claims.

The situation is different in Phoenix where businesses have largely remained open during coronavirus thanks to “suggested restrictions”, but that could change as Governor Ducey is just now starting to take action and has ordered schools in the state to be closed until April 30th.

With more people unable to work due to coronavirus, most owners will likely start hearing that their tenants will be unable to pay their rents by April 1st and that number could increase dramatically by May when economic stimulus checks have come and gone, and the rent payment is due again.

Las Vegas has been hit the hardest economically from coronavirus because the city relies heavily on tourism and hospitality. Sadly, with most people being laid off, Vegas could likely see 20%-30% of renters report that they will be late or unable to pay their rent in the coming weeks.

What Should Owners Do?

Now that California and Nevada have statewide moratoriums on eviction, the big question is what should owners due when there’s no money coming in from rent to cover their mortgage and other bills?

Work with Your Tenants – Start contacting your tenants now to see if they will be able to pay their rents next month. If they are unable to pay rent, offer them a payment plan so that they can pay what they can pay now while paying the remaining balance on their rent over the course of one year.

Build Cash Reserves – If you don’t have cash reserves saved up now, it’s best to take action to start building your reserves by choosing options like a cash-out to refinance loan.

Your goal should be to have at least $3,500 in cash reserves per multifamily tenant and up to $5,000 in cash reserves for single-family tenants because this money will also help you to cover repairs on your properties when needed as well.

Consider Refinancing or HELOC – As recommended by Ryan, another option is to consider using is a home equity line of credit. Yes, the credit market is tightening but if you pull the cash out of the home equity line of credit and put it into savings, the bank can’t touch it.

Talk with Your Lender Before Things Get Bad – You should speak with your lender ASAP and find out if they have any options for you like a forbearance to keep your rental from foreclosure. Being proactive now and reaching out to your lender now will save you the hassle of having to wait to wait for them to call you back once they do start getting a lot of calls.

The fallout from coronavirus (COVID-19) is evolving because it’s affected each rental market differently so during this time it’s important to focus on getting your news from qualified sources, avoid fake news, and social media posts that promote hype.

Remember, we’re all in this together and until coronavirus is over it’s up to owners and tenants to work together to create an outcome that’s best for everyone.

Contact GoldenWest Management

For more information about what’s happening with the rental market in San Diego, Phoenix or Las Vegas, during coronavirus, or to speak with us about the property management services we can offer you, contact us today by calling (866) 545-5303 or click here.

GoldenWest Management Is Still Open During Coronavirus

Over the last 30 days, coronavirus has been on the minds of everyone as the virus has caused many cities nationwide to issue “shelter at home orders” which has also resulted in some businesses shutting down.

At GoldenWest Management, our team is still working remotely from our home offices. This has enabled us to continue serving our tenants as normal during the coronavirus crisis without shutting our business down.

We’re continuing to serve our existing clients as before because building maintenance is considered to be an “essential service” so if you’re a GWM tenant who has a maintenance request, please contact us at (866) 545-5303, or to learn more about our property management services please click here.

Reasons Why Short-Term Rental Properties Are Overrated In 2020

Short Term Rental properties like Airbnb’s are a byproduct of the 2008 financial crisis because they’ve been able to benefit from a Bull Market that’s lasted for over 10 years.

Sadly, even though Short-Term rental properties are common in the rental marketplace of 2020, they are highly overrated, especially for these reasons:

Reason #1 – The Business Model Hasn’t Been Truly Tested Yet

Yes, even though we’ve had vacation rentals for years, Airbnb’s and other similar short-term business models have not been “tested” yet.

With the onset of CoronaVirus, short term rentals are being increasingly tested by the day as the threat of this virus has prompted many people who were booking stays in short term rentals to cancel their vacations due to fear of Covid-19 exposure.

Reason #2 – Not Enough Competition in The Short-Term Rental Marketplace

Even though Airbnb may be the “go-to” website for booking short term rentals, this isn’t necessarily a good thing because it means that owners either have to be on Airbnb, or their rental properties will not get the exposure that they need to generate money for their owners.

Reason #3 – High Regulatory Risk

Last of all, but most important, another reason why short-term rentals are overrated in 2020 is that this industry faces a high risk of regulation from city, state, and local governments.

The increased regulations imposed on short term rentals have a lot to do with the rental housing shortage that states like California are facing right now.

Many cities and states are pushing back against short term rentals and Airbnb because of the obvious fact that if most of the rental properties on the market are short term, those properties eat up the supply of long-term rentals and this leaves a rental housing shortage.

What’s the solution to the problem? Short term rental properties are here to stay but if you’re looking for stable income from your investment properties you should consider investing in long term rental properties.

By investing in long term rental properties, you can expect consistent monthly income because the average lease is either month to month, six months, or one year. This means that you can grow a portfolio of investment properties without having to spend a lot of time and effort keeping your rentals occupied.

Contact GoldenWest Management

To learn more about the property management services we can offer you contact us today by calling (866) 545-5303 or click here to connect with us online.