Top Property Management Challenges Facing Landlords In 2024
While investing in real estate is likely to be even more attractive in 2024, landlords do face their fair share of challenges when it comes to managing their income properties this year.
Here are some of the most important things to watch out for and get ahead of, and how to navigate them.
Squatters
Squatters are a nightmare for income property owners. Not only can they tie up a property that should be producing income, but there are legal costs for evicting them, and they can do a lot of physical damage too.
Each state has its own squatters rights laws. With some states like Florida proposing new changes in favor of landlords, this could send more professional squatters to other states.
Unfortunately, reclaiming your units, and then remodeling and releasing them could be a 6 to 12 month process. We had one that took over seven years!
It’s far better to get a unit occupied with a tenant of your choice to avoid this risk, even if this means taking a little more time to be selective.
Changing Renter Pools
We appear to be experiencing a substantial divergence in the economy. A few are becoming far wealthier. The middle class, however, appears to be disintegrating under the pressure of inflation, jobs being replaced with technology, and companies making mass layoffs.
The available renter pool in 2024 may look much different than what some have been used to. This will also require landlords to be flexible in keeping up, and updating their criteria for tenant applications.
On one hand there may be luxury rental applicants that have the financial resources, but which demand more. While financial distress for others may mean lower average credit scores, recent employment changes, and evictions and mortgage defaults being more common.
Subsidized tenants may also become much more common over the next couple of years.
Staffing
Finding reliable and high performing staff to help manage properties, conduct cleaning, maintenance, customer service, and repairs is likely to continue to be a challenge in 2024.
High prices mean that workers need to earn more money in order to make working make financial sense for them. Even if more layoffs mean more potential hires in the recruitment pool.
Regulations
As the economy continues to rotate and states become more polarized by politics, landlords should be anticipating more regulatory changes.
This may affect everything from approving tenants to website requirements, eviction procedures, and more. Staying on top of these changes will be critical for avoiding legal issues and financial penalties.
Summary
A variety of factors in the economy may make real estate a far more in demand investment this year. However, solo landlords taking the DIY approach may face more challenges than they expect. This will be an environment in which proven property management expertise will be vital for efficiency and profitability when investing in income properties.
