It's been a tough year for residential landlords, to say the least. Federal eviction moratoriums left many mom-and-pop landlords unable to collect rent or move forward with evicting tenants. Even once those restrictions lift, landlords will still be in quite the tough spot. In fact, there's a good chance landlords will grapple with vacancies in 2021 as living arrangements shift to accommodate these economically uncertain times. And landlords in higher-end buildings may struggle to attract tenants following a year like the one we've had.
If you're worried about your bottom line as a landlord, the right strategies going into the new year could better position you to draw in tenants and protect yourself financially. Here are a few moves to consider.
1. Expand common areas
After a year of isolation, tenants are tired of feeling stuck in their apartments. But seeing as how the coronavirus pandemic won't be over when 2021 rolls around, interfacing with other people is a potentially dangerous prospect.
As a landlord, one way you can help is to build out sizable common areas that lend to social distancing while giving tenants an opportunity to escape their apartment walls. Look into rearranging furniture to create more lobby space, or invest in some landscaping or hardscaping that lends to a larger courtyard outdoors -- or even a walking trail. Giving tenants a place to roam or relax safely could help you retain existing tenants and attract new ones.
2. Rent out properties by the room
If you own a single-family income property, you may be used to renting it out as one unit. But given the circumstances, renting that home on a room-by-room basis may be a better bet. Doing so could give you more income security. If one tenant loses a job or seeks to break a lease prematurely, you'll have rental income from your remaining tenants to fall back on. You may also get away with charging more in total by renting your home by the room instead of as a single unit, which could help you recoup some of the losses you may have suffered in 2020.
3. Be flexible with lease terms
A lot of people's plans may be up in the air due to the pandemic. As a landlord, it's in your best interest to be as flexible as possible when it comes to signing new leases, because if you're not, you may lose out on tenants. Though one-year leases are pretty standard in residential situations, you may want to agree to six- or even three-month leases as current and prospective tenants attempt to figure out their living situations.
The Millionacres bottom line
Will 2021 be a better year for residential landlords? It's hard to say. Though the jobless rate has steadily declined since reaching a high in April, many Americans are still out of work or dealing with income insecurity. Unfortunately, that's trickled down to landlords and may continue to do so in the new year.
If an effective coronavirus vaccine is indeed rolled out to the masses by mid-2021, things will hopefully improve economically in short order. But until then, you'll need to think strategically about managing your rental property, offering great value to tenants, and working with renters, given these continuously uncertain times.