There’s no end to the list of ways COVID-19 has changed our lives. Even as we look toward the light at the end of the tunnel and hope for a return to normalcy, we’re still forced to cope with constant, often unexpected, changes. For landlords and property managers, the ways we do business on a day-to-day basis have been completely altered. But despite all the challenges the pandemic has thrown at us, there’s a surprising silver lining for those who own or manage rental properties: rental property tenant turnover has plummeted. Let’s take a closer look at the reasons why, and the potential ramifications of this trend.
Rental Property Turnover Has Plummeted Amid COVID-19 Shutdowns
As we move toward summer, we’re entering the part of the year that is traditionally seen as moving season. Ever notice how much harder it is to book a moving company in the summer? It’s the season when people typically think about buying or selling their home, but it’s moving season for renters too.
The summer months are the time of year when temperatures rise, and renters move out, often shopping for a better deal or relocating to a new neighborhood. It’s tenant turnover season and it always has been.
But this year, we’re noticing a change. Renters are choosing not to move. More renters than ever before are canceling their move-out plans and requesting short-term lease extensions. Property managers, grateful for the ability to retain more tenants, are usually more than willing to accommodate them.
Changing times, changing needs
Of course, there’s a simple and obvious reason why fewer people are moving right now, and that reason is Coronavirus. With the entire country in some state of quarantine, self-isolation, or shelter in place; moving is challenging. In some states it’s practically impossible.
But it’s not just that people are choosing not to move because they don’t want to break the rules. Renters, like the rest of us, are on uncertain ground. Many are out of work, working part-time, or working from home. Many are facing an uncertain financial future, and that makes moving scary.
Rental property renters all over the country are rescinding their non-renewal notices, and choosing to stay put (as of April, 3.7% of notices were rescinded, up from 2.0% this time last year). Some may sign new leases instead, but many property managers are stepping up to the plate by allowing tenants to stay where they are on a month-to-month basis.
Good news, bad news
The current drop in tenant turnover is a double-edged sword for property owners and managers. Retaining tenants is, of course, a great thing in the short term. One of the biggest expenses for landlords and property managers is filling vacancies created by tenant turnover, and we work hard all year long to keep the tenants we have so we don’t have to find new renters.
In such uncertain times, anything we can do to keep a tenant is worth doing. But there’s a potential problem to watch out for down the road. Most of the renters who are changing their moving plans and rescinding their non-renewal notices aren’t deciding not to move; they’re just deciding to move later.
Tenants are adjusting plans they made before COVID-19, and it’s likely that their plans will resume as the pandemic recedes. As a result, property managers may have to deal with a sudden uptick in tenant turnover later in the year, which we need to be prepared for.
Property Managers are Here to Help
The world is changing in unprecedented ways during the Coronavirus pandemic, and we’re here by your side every step of the way. Contact us today to learn more about our resources for property managers. Son-Rise Property Management has been serving the property management needs of Bellingham and Whatcom County since 1996.