With The Eviction Ban Over, What’s Next For Property Investors?
A federal judge overturned the national eviction ban in May 2021. What are the next moves for property investors now?
An end to the national eviction moratorium is great news for all real estate investors. It is a move that once again returns confidence to the market, and opens up the regular flow of business and cash. That’s good for flippers, rental property owners and others.
Eviction Bans
Several judges have now ruled that the CDC overreached its authority, or even acted unconstitutionally when it banned evictions last year.
As many as 20% of US renters have been struggling to pay their rent according to CNBC. A significant number of those may be ripe for evicting.
While this is positive news for real estate investors and owners, there are considerations to keep in mind. There may be state and local eviction bans still hampering landlord’s efforts to regain control of their properties, and those local rules weren’t within the scope of the court’s ruling.
Expect major appeals of this ruling. If for no other reason than to avoid massive lawsuits for a year of financial damages among landlords.
Yet, for now the window of opportunity may be open to evict occupants which are just taking advantage of the system, while motivating other tenants with good intentions to get and stay on track.
Value Add Opportunities
There is still record demand for real estate. Individual investors, big institutional funds and end retail buyers are all prioritizing real estate investments. Especially with the frothiness and hyper volatility in other sectors.
There are value add opportunities among both multifamily buildings and single family portfolios. This is a chance to acquire them, clear out non-performing tenants, remodel and resell at peak value or convert them into condos.
Restructuring Tenants
Just because landlords can now evict doesn’t mean they should evict everyone who has struggled with their rent over the past year. No one wants that. This is the chance to restructure the mix, and strengthen the leasing base.
Smarter Leasing
To optimize income and prevent a repeat of the issues of last year in any new crisis landlords may also explore more alternative and creative leasing structures.
This may include memberships, short term month to month, extended stay, or vacation style rentals. Or switching to HUD and government paid tenants.
