5 Side Effects Of Coronavirus Real Estate Owners Need To Be Prepared For
It’s here. It is likely to continue to spread. Italy has set a precedent with a nationwide quarantine and restricting movement in and out of neighborhoods. For at-risk groups, the fatality rate is as high as 20%. Don’t panic, but do be alert to these side effects. Plan, budget, and adapt for them.
1. Fewer Movers
Between the economic toll, workers being put on leave, limited travel, and how scary some areas are making this pandemic, expect fewer movers. For example, Seattle landlords shouldn’t expect many new people moving to the city in the first half of 2020. That could mean far fewer new leases in hard-hit areas. Some may want to leave the densest and hardest hit urban centers if they can. Though not all will be able to afford it.
Offset this by focusing on renewals and retaining residents.
2. Renter Performance
There seems to be little question that the economy is being impacted. Between canceled business trips and events, not being able to go to work, fewer customers out shopping for non-essential items, and layoffs, or merely being sick and missing work, incomes will take a hit.
Expect higher rates of late payers. Address issues with tenants early before these drag out and become defaults. Forward-thinking landlords and property managers will get proactive in working with renters to give them the resources they need and a plan to stay on track and in place.
3. Building Supplies & Labor
We already see an impact on many industries due to stalled imports. There could be more difficulties moving construction equipment and material within the country too.
If you are building or working on a major renovation, plan these delays into your timeline. Or come up with alternatives quickly.
Also, factor in a lower supply of labor and extended completion times due to challenges workers are facing.
4. More Deliveries
While there is still a lot of debate over the safety of the mail and Amazon packages, it is likely we’ll see even more online shopping happening over the next few months.
If you haven’t already made adjustments for package acceptance, now is the time to catch up. This could be repositioning office space to mail and package locker space and instituting new policies for ensuring healthier mail and delivery services.
5. More Demand For Onsite Services & Spaces
Many multifamily apartment buildings and mixed-use properties have seen community spaces sorely underutilized over the past few decades. That could be about to change.
Whether due to self-isolation, mandatory quarantines, or just more workers and children staying at home, expect these spaces to be used a lot more. This can include co-working and business center spaces, onsite gyms, recreational areas, and kids’ playgrounds, as well as any food and shopping facilities.
Be prepared for increased maintenance and cleaning needs for these spaces.
ABOUT THE AUTHOR
Bill Zahller is the Managing Partner of Park Capital Partners, LLC and resides in Asheville, NC. As a Multifamily Real Estate Investor and Syndicator, he founded Park Capital Partners, LLC in 2016 after 14 years involvement in real estate investment. He works with accredited investors and professionals who are interested in real estate investment, diversification, and financial freedom.
Bill has been flying since high school. His father was a Naval Aviator and Captain for TWA. Bill has been flying professionally for over 25 years, 23 of those at his current company. He has accumulated over 12,000 hours and 7 Jet type ratings. He has also held Instructor, IOE Instructor and NRFO pilot positions with a large fractional flight company. He is currently flying the Global 6000 in a long range mission capacity. This keeps it interesting – one week its Beijing or Sydney; the next Rio or Rome.
Bill is also the founder of the Asheville Multifamily Investor Club. Visit www.ParkCapitalPartnersLLC.com for more information.