In this article, we’ll explore how the eviction moratorium has affected landlords and rental property owners, how the pandemic has reshaped the current real estate market, and some strategies for selling your home during COVID-19. By being adaptable and understanding regulations related to rental investments, people can navigate the current real estate market more efficiently.
How Has the Pandemic Affected the Real Estate Market?
The coronavirus pandemic undoubtedly had a tremendous impact on the real estate market, and the duration of its consequences is hard to determine. The span of COVID’s effects has influenced the entire span of real estate. Stay-at-home orders have resulted in fewer houses on the market, increasing their demand among those looking to buy homes. Interest rates have lowered, so there has been an increase in individuals looking to purchase homes or rental properties as their purchasing power has effectively increased. Due to widespread economic hardship, many renters have been unable to make their monthly rent, which resulted in the CDC imposing a federal eviction moratorium invoked in March of 2020 under the CARES Act.
All things considered, people still need a place to call their home and real estate is a never-ending industry. Homeowners and rental property owners need to adapt to the current market to sell their homes, manage their tenants, and ensure they make educated choices during this hectic period. Let’s explore what the eviction moratorium means for landlords, tenants, and homeowners protected under the CARES Act.
What is an Eviction Moratorium?
The eviction moratorium was imposed by the CDC to assist those that have suffered from financial trauma due to COVID-19, whether it might be a loss of employment or medical bills that have resulted in non-payment of rent. The order doesn’t remove the possibility of late fees or penalties charged by the rental property owner or landlord, nor does the eviction moratorium allow tenants to break their lease outside of nonpayment scenarios. As of July of 2021, the eviction moratorium was extended for parts of the country that are still struggling in their case numbers of COVID-19. The eviction moratorium has very specific requirements for eligibility. It’s not as if any tenant who wishes to skip rent can use it to their advantage. Tenants need to apply to government assistance programs and qualify under the CDC’s requirements.
To qualify for protection, tenants need to:
- Provide income information
- Prove inability to pay rent
- Make their best efforts to pay rent as much as possible
- Be in a position in which they have nowhere else to turn
While meeting these requirements may deem a tenant eligible, there are serious ramifications if application info is falsified. After ensuring they have verified eligibility, tenants must fill out and send the CDC’s declaration form to their landlords or rental property owners to indicate they are covered under the moratorium. Once the tenant has followed all required steps and provided this documentation, renters are unable to evict the tenant due to nonpayment of rent.
What the Eviction Moratorium Means for Landlords and Rental Owners
One of the biggest takeaways from understanding how the eviction moratorium affects landlords is that legal advice is valuable. Each state is different in how its eviction process works, and knowing the correct steps to take as a home or property owner renting their space is crucial for success. Often times, reverting to a local expert could be the best decision if things point towards an eviction. Real estate lawyers are a great resource for understanding what to do if tenants are not paying their rent. Here are some of the biggest points for landlords and rental owners to consider during these unprecedented times.
Evictions Are Still Possible
The eviction moratorium was put in place to assist individuals who have suffered a substantial financial loss that has resulted in failure to pay rent. That being said, tenants are not only evicted due to non-payment of rent. If the tenant needs to be evicted for reasons non stated in the moratorium, such as smoking in a non-smoking building or otherwise violating their lease, an eviction can still be pursued. It’s just important for landlords and property owners to verify all necessary information before moving forward with an eviction toward a potentially covered individual. Additionally, it’s also possible to sue people for rent rather than eviction, which effectively sidesteps the eviction moratorium. Most tenants will want to avoid legal complications and small claims court.
Explore Month-to-Month Leases
Something that’s become increasingly common during the pandemic has been month-to-month leases. Typically, renters are accustomed to year-long leases but having a month-to-month option can be an appealing selling point for renters as well as an advantage for landlords and property renters. Month-to-month leases allow tenants to have a bit more flexibility in their living situation which can be helpful during a time of economic uncertainty. On the flip side, renters and landlords can replace current tenants easier by not renewing to tenants who have not paid their rent. Non-renewal is not an eviction but still allows landlords to save some of their sunken profits in situations of month-to-month renters not paying rent.
Communication is Key
As any landlord or rental property owner is well aware, healthy communication is the only way to have an accurate snapshot of your tenants’ needs. Communication is especially important for both renters and tenants during this time. Covered tenants are required to accurately follow the steps of the moratorium and communicate with their landlords of complications paying rent, and landlords should be responsive and document all correspondence. The eviction moratorium is put in place as a temporary halt on evictions, but tenants are still expected to pay their rent in the future. Keeping track of all tenant communication is highly suggested, not only to be able to guide them through the moratorium requirements but also to provide evidence if needed down the line.
Renters Have Assistance, Too
For homeowners choosing to rent out their space, it’s important to understand that housing qualified individuals under the eviction moratorium may result in financial losses and the inability to pay their own mortgages down the line. Similar to the eviction moratorium, the foreclosure moratorium was put in place to help homeowners place a pause on federally-backed mortgages. Despite this ending in August of 2021, if a home or rental property owner applied for forbearance under the Cares Act and is still struggling financially due to pandemic-related hardship, they may be eligible for an extension.
It Might Be Time to Sell
As with any major investment, rental properties are all about generating positive cash flow. When it comes to how the eviction moratorium affects landlords, it’s certainly adapted the way they have to view their rental property investments. Especially for those renting out a home, selling your house during COVID-19 could prove to be an intelligent decision due to the current demand within the housing market. If a rental property is not generating revenue from its tenants, sunken profits can be highly anticipated. The eviction moratorium has provided landlords challenges, but the pandemic as a whole has provided insight into the success of a rental property and how much revenue the property is truly bringing in. If landlords are only projected to lose profit, it might be the best time to sell.
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Strategies for Selling a Home or Rental Property During COVID-19
Even with the backdrop of a pandemic extremely present, the real estate world does not stop. In terms of how the eviction moratorium affects landlords and rental property owners, it’s provided an opportunity to move forward, and in many cases sell. Many rental property owners and home sellers are simply waiting for the right time to list their homes and find a buyer. As difficult as it may appear for rental property owners to consider marketing their investment within a pandemic, you can still sell your home in today’s market.
From a buyer’s perspective, now could be seen as a great time to buy. Interest rates have once again dropped to all-time lows and many lenders have loosened some of their most restrictive guidelines. With states and individual companies embracing remote work schedules, buyers have more time than ever to investigate and research their dream home. While COVID-19 is changing the way you may go about it, selling your home or rental property is still very possible. If you’re wondering how to sell your house during COVID-19, here are a few strategies for selling your home during COVID-19 as we continue to fight against the coronavirus and its variants.
Leveraging Technology to Sell Faster
Over the past year, many real estate agents have shifted how they preview and show their listings. To maximize their time, they have started producing property virtual materials for websites or public viewings. Homeowners or rental property owners can easily take videos of their property for agents to share with prospective buyers who can view these materials and quickly decide if they’d like to move forward. The benefits of these virtual materials will outlive the pandemic as an appealing option for non-local buyers to view properties that they might have struggled to view or gain interest in originally. Virtual staging, 3-D tours, and video tools such as Facetime and Zoom have completely transformed the way buyers can get the first impression of a property, and utilizing these technologies to perform real estate tasks is a smart decision.
Utilize Modern Marketing
In a traditional real estate transaction, initial interest is usually derived from an alert through a multiple listing service (MLS), a database utilized by real estate brokers for information regarding properties for sale. In modern markets, sellers and real estate agents have become more creative. The most common starting point nowadays is social media and online marketing. With an uptick in remote work, there has been a subsequent increase in online traffic. Sellers can use this to their advantage for organic interest in the listing through virtual tours, video tours, sponsored posts, linked websites, etc. This allows buyers to access facts and data regarding a property more often, with many of these online resources also providing alerts to agents, investors, and brokers to see new listings. By adapting to modern marketing techniques, exposure shouldn’t be an issue when selling a home during the coronavirus pandemic.
Showing Your Property (Carefully)
As much as a virtual property tour or dedicated online marketing campaigns can provide valuable property information to potential buyers, nothing can replace the confirmation a buyer receives from physically walking through the property. Especially with the increase of vaccinations, if there is true interest in the property it’s likely that the buyer will want to see it in person. It’s important to note that not all prospective buyers or sellers are vaccinated, so it’s important to still follow county and individual state regulations regarding COVID-19. The bottom line is that if a buyer needs to put eyes on the property, they are still allowed to, so sellers should be aware of local guidelines when selling their home during COVID-19.
Contact CT Homes for Help Selling Your House or Rental Property During COVID-19
The coronavirus pandemic has caused changes in local real estate practices and procedures that will become the new normal in a few years. While it has altered the way homeowners and landlords have conducted their business, COVID-19 doesn’t have to be a major roadblock in your real estate experience. At CT Homes, we’re passionate about helping homeowners sell their homes with cash offers that can speed up the entire transaction. Additionally, CT Homes has valuable insight into selling rental properties for landlords and rental property owners looking to make a change.
Learn more about how CT Homes can help with selling a home during the coronavirus pandemic today!