This is the second story in a four-part series on rentals in the time of coronavirus. Read other installments of the series here:
The ongoing coronavirus outbreak has left both landlords and tenants fearful, as well as driving unemployment among renters to more than 50 percent, according to a new report from property management software company Avail.
The survey is based on responses from more than 2,700 landlords and 7,300 renters. Among the renters who responded to the survey, an astonishing 54 percent said that they had lost their jobs due to the pandemic. That number is vastly higher than last month’s already mind-bogglingly high federal unemployment numbers.
Job losses among renters were highest in Nevada, California, Michigan, Pennsylvania and Louisiana, respectively.
A report based on the survey’s results further notes that standard unemployment numbers may not capture “the number of renters who lost their self-employed income due to covid-19.”
“Our research showed that 16 percent of those who lost their job were self-employed,” the report adds.
Though the survey and report aren’t specifically about agents, presumably some of those who lost self employment income may be members of the real estate industry; agents are typically classified as independent contractors who are effectively working for themselves.
In any case, given these dire circumstances it’s no surprise that anxiety permeates the rental industry right now.
“Responses from landlords and renters painted a picture of unemployment, uncertainty and fear far worse than expected,” the report adds.
The survey also found that people are not communicating well, with nearly 75 percent of renters saying they hadn’t yet heard from their landlords regarding the crisis. Moreover, 65 percent of renters who lost their jobs had not communicated that fact to their landlords.
Additionally, 66 percent of renters did not know if their state had paused evictions — which many places have in fact done. Among landlords, 59 percent reported knowing about eviction rights.
Other findings in the report include the fact that most tenants want to pay their rent, but that 32 percent said if they can’t they’ll simply stop making payments; that landlords are unprepared, with 58 percent saying they don’t have credit options to float expenses in the case of an emergency; and that just 4 percent of landlords have default insurance.
Small-time landlords are also the property owners most likely to suffer in the crisis, according to the report.
“DIY landlords may be one of the worst-hit groups in the real estate industry as a result of this pandemic,” the report concludes. “As renters are faced with high unemployment, both landlords and renters are left with few options. Independent DIY landlords likely won’t have the ability to recoup the cost of missed rent in the same way that larger real estate owners will.”
The survey responses were collected last month. Avail was founded in 2015 and focuses on providing software solutions for DIY landlords. The company says that it currently works with 160,000 landlords and 400,000 renters.
The findings of the survey provide further evidence that the coronavirus pandemic is decimating the economy. As the crisis picked up steam weeks ago, it sent the stock market plummeting. In the day since, widespread social distancing and isolation mandates have shuttered restaurants, bars, shops and travel businesses, forcing millions of people out of their jobs.
The chaos has prompted growing fear of a recession among real estate consumers.
Cities, states and the federal government have responded with an array of stimulus packages and plans to keep people in their homes, though the ultimate economic toll of the crisis still remains far from certain.