Multifamily Owner Challenges in 2021

[Joanna Parungao]

There's a lot of speculation about a housing crisis in 2021, I've read some articles that predict absolute doom and gloom while others seem a bit more optimistic. What do you guys think are the top five things multifamily property owners have to look out for/prepare for in 2021? 

[Patrick M.]

Depends entirely on your location and class of rental, but here goes a couple...

1. Reserves will be taken more seriously - I was saying it back in March when some landlords were declaring "Free rent!" - You must hoard your cash and build reserves. I had pessimistically predicted that we would be exactly where we are today, not because I "knew" but because I wanted to be prepared.

2. Landlords will get more professional in their vetting or hire property managers that will. Many problems have arose because tenants have taken advantage of blanket relief that they do not require. The properly vetted tenant is unlikely to do this.

3. Landlords will be more professional - April and May saw an inordinate amount of landlords who "wish" they had taken action against bad tenants earlier. Some who chose to stop collecting rent because the tenants "were like family to me," and as a result put themselves over the barrel. Those who are left in the coming years will be more likely to run their business as a business.

4. Landlords who can justify upgrades, will- One thing that has come out of this is that the tenant who can telecommute is king. Those landlords who are in a market that can attract such a tenant will want to upgrade to attract them.

5. Space and outside amenities will hold more value- Yards, Parks, Trails, Beaches... These will all carry more value in the coming years.

"I've read some articles that predict absolute doom and gloom while others seem a bit more optimistic."
They are both 100% correct.