What are the most pressing property management issues for 2022?
Today’s landlords and property managers are facing a number of concerns as 2021 comes to a close. For landlords and management firms with employees, one of those is simply filling jobs. The labor shortage is affecting all industries, and property management and maintenance is no exception. Many employers have increased compensation and benefits offerings to help attract workers, but landlords and property managers may want to review new leases before signing to consider changes that may be needed due to labor shortages.
Eviction moratoriums are still affecting some property owners and managers as the new year approaches. Many tenants were able to continue living in properties without paying rent when moratoriums were in place, but property owners still had to keep up with bills. This created a shortfall for some owners. As moratoriums continue to lift in 2022, property owners and managers are going to need to know their legal rights in order to make informed decisions about what to do with tenants who have past-due rents. While evictions may be possible again, the difficulty of recovering unpaid rent, and the legal costs associated with an eviction, can limit the benefits, especially if a tenant is not working.
Will the eviction process be easier in 2022?
The eviction process might be easier in 2022, provided state and local eviction moratoriums and freezes are lifted. As new COVID-19 variants emerge and the new year begins, a surge in the ongoing pandemic could result in a number of these protections being put back in place or extended.
If new or further extensions are granted, evictions will be a challenge or even an impossibility for those tenants that qualify. Otherwise, property owners may be able to more easily pursue evictions to keep their revenue streams going, assuming the court backlog isn’t super long. Some may already be facing a large number of potential evictions. Others may need to figure out how to deal with past-due rent, or the tenants who want to pay their debt to stay.
Are condo and multifamily properties expected to continue recovering value in 2022?
The challenges in the rental industry impacted the value of condo and multifamily properties in 2020 and 2021, while single family home values increased. With evictions now possible, and concerns over COVID-19 easing, the value of condo and multifamily properties will likely continue to increase in 2022.
One factor that may help with overall value are the increases in rent. In 2019, rent prices stayed stagnant. In 2020, rent declined for multifamily properties, which continued into 2021. However, in late 2021, median one-bedroom rent prices in the United States started to rise back up. The increase in rent and value of multifamily properties is expected to rebound and even continue to increase through 2022.
Will 2022 be a good year to invest in additional properties or improvements?
Yes, 2022 may be a good year to invest in additional properties or to improve upon existing properties. Real estate remains in high demand, but many people are seeing signs of balancing from the fall of 2021. For example, single family home price growth from 2020 and 2021 is expected to stabilize significantly, but is still likely to continue the usual slow growth. The combination of slowing inflation and fewer home sales may mean more bargain-priced homes on the market, which could be good news for investors.
Interest rates also remain fairly low. Low rates can make financing and mortgages more affordable, which is a perk for investors. However, mortgage rates are generally in a state of flux, so this could change at any time.
Homeownership increased drastically in 2020 and 2021 as people moved out of densely populated cities. It is possible that some of those new homeowners will opt to return to renting in 2022, which could create a higher demand for rental units. That said, with how things are trending, it could also result in more demand for condos and other multifamily properties that offer amenities.
Should rental property owners consider expanding into other types of property investments?
Rental property owners may benefit from diversifying their real estate portfolio. 2022 may be a good year to invest as interest rates are low and the economy is recovering and rebuilding. However, investors always need to consider each investment before jumping in, being particularly mindful of the lessons learned from the pandemic. Some industries, like retail, continue to struggle in the post-pandemic world, where many shoppers are still making their purchases online.
While there is a market for investment properties, you may need to do more research into the local markets. It is always smart to make sure you are buying a property that has a high-demand industry and a strong potential return on investment. Turnkey properties look a little different than they did two years ago, but many opportunities still exist in both residential and commercial markets.
If you decide to expand your portfolio with a new type of real estate, familiarizing yourself with common agreements and documents may help. Commercial and short-term rental agreements are often very different from residential Lease Agreements, and are usually more strictly enforced.
If you have legal questions about growing or managing your real estate investments or rental business, reach out to a Rocket Lawyer On Call® Attorney.
This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.