Prowess Property Management

How is COVID-19 affecting the rental Market?

How is COVID-19 Affecting the Rental Market?

The COVID-19 outbreak halted almost all of the active businesses and impacted people’s lives on a global scale. Governments are imposing travel restrictions, establishments are shutting down, and we are to comply with home quarantines to impede the virus from spreading.

Clearly, this year has been a turning point for all of us. Especially in the rental market, where property managers rely on face to face negotiations if they are to physically meet incoming guests. A Forbes article shared an IPX 1031 survey wherein it said that 45% of Airbnb hosts won’t be able to continue renting out their property if the pandemic will last for another six months.

It may sound alarming but with the aid of technology; most of the operations now can be done virtually such as self-check-ins and online payments. Even though there is no guarantee as to when will we recover from this pandemic, we can take heed from experts and adapt these changes to slowly get through this new normal concept.

Government Initiatives

How is COVID-19 affecting the rental Market?

To prevent new cases from rising, the government is in close coordination with the medical team. Community quarantines are imposed; schools and universities are temporarily suspended, and malls and restaurants are back in business to observe social distancing at 50% capacity.

Some countries initiated monetary assistance to small businesses and relief for landlords, especially for those tenants who can no longer pay their monthly rent because of job loss and retrenchment.

Job Losses

How is COVID-19 affecting the rental Market?

Some of the companies need to let go of employees because they can’t fund them anymore. And it’s the reality that we’re facing right now. Lucky for those people who own a house, they don’t need to worry about paying monthly rent. But how about those workers who pay rent and mortgage?

Considering the situation, most countries cease property evictions. This allows renters to stay in the property with no issue for non-payment from the landlord. It may sound like tenants get free lodging but it’s not – their monthly is just accumulated and by the time they can start working again, then they can pay it depending on the agreement with the owner.

Utility charges are also part of the government’s initiative to alleviate both tenant and owner’s state. Same as rent payment, it will be accumulated until such time that people can start working (remote of skeletal) and pay bills slowly.

Cancelled Bookings

How is COVID-19 affecting the rental Market?

Airbnb is just one of the online rental platforms that are greatly affected by this unwanted transition. 64% of guests did plan or have canceled their existing booking due to COVID-19. Since Airbnb updated their cancellation policy, bookings flunk while homeowners and property managers struggled to maintain the occupancy rate of their respective rentals.

Though guests feel safe booking an Airbnb accommodation again for this summer or fall, it’s hard to tell because the uncertainty remains even up to this date.

Opportunity for Long-term Stays

How is COVID-19 affecting the rental Market?

Property managers’ marketing strategies have been put to test as they venture not just short-term but also advertise an Airbnb listing for long-term stays. On the platform, it is considered long-term if a guest books a property for 30 days and beyond. Payments will then be wired on a monthly basis.

Although Airbnb still sticks with offering short-term rental accommodation, some guests are using the app when searching for long-term stays and hosts are adapting this option to generate more bookings.

It’s still early to conclude and assess the future of the rental market using today’s figures and predictions. Even with restrictions and intensive impositions of laws, if the pandemic is here to stay, then the industry will have to recalibrate current techniques to better suit the situation. But one thing’s for sure: rentals will continue its services as long it is still relevant and in need.

If you need assistance with management services, don’t hesitate and give us a call at 1-888-538-7769 or e-mail your queries at marketing@prowessproperty.ca.

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