Finding a niche is one of the best things you can do when you're trying to stand out online, and given the events of the year, landlords are looking like they're going to be a hot group to target moving forward. Here's why focusing on the landlord lead may be the best decision you've ever made:
Quick! What is the number one pain point of homeowners across the country?
If you said “making their mortgage payment,” you nailed it.
If the homeowner is a landlord, it’s even worse. In April, an estimated 31% of tenants couldn’t pay their rent. May looks a bit better, with 20% of renters not being able to pay.
That’s the national average. Break it down by state, however, and the most expensive states are having the biggest problem. In California, for instance, 85% of tenants didn’t make their May rent payment.
For each of these tenants, there is a landlord who most likely has a mortgage and definitely has ongoing expenses to pay.
Reading interviews with landlords across the country finds a mixed bag of responses to the lack of consistent income from their rentals. A few were smart enough to have a couple months of expenses banked.
Many, many more, however, have been living paycheck-to-paycheck and rent-check-to-rent check.
It may be an ongoing problem, too – as long as folks are unemployed, they’ll be cash-strapped.
For ideas on how to generate leads during lockdown, check out this article – otherwise, read on.
The U.S. census bureau estimates that there are about 8 million landlords in this country and that they own, typically, between one and 10 properties. These are the small, as opposed to institutional, investors.
Most have been landlords for between six and eight years, but their numbers increased dramatically in 2018, according to a Core Logic report.
The lion’s share purchased their rentals between 2012 and 2014. Again, these are individual landlords who scooped up almost half of the investment properties during that time.
But, 2018 was a banner year for small investors entering the investment real estate market. Their share of purchases skyrocketed to 60%.
Little did they know that in two years their tenants would not be paying rent and they would be forbidden from pursuing remedies.
The small landlord’s biggest concern right now is the lack of rental income. In a late April survey, slightly more than half (52%) of tenants were “confident” that they would be able to pay their full rent in May.
To add to their woes, nearly 60% of investment homeowners don’t have access to any sort of line of credit, according to Avail.co, a landlord software company.
So, nearly half of America’s landlords are left in the lurch.
How long can the “Mom and Pop” landlord continue to add to their pile of bills while cash inflow is almost non-existent?
Even if granted forbearance, there are still maintenance and operations costs that will go unpaid. “If something breaks in the apartment, if the HVAC goes, it still needs to get fixed, and it needs to get fixed ASAP,” Caitlin Walter, with the National Multifamily Housing Council tells MarketWatch.com.
“And so those are expenses that will continue whether or not the person is paying their rent,” she concludes.
Apparently, many are considering doing just that, in their efforts to avoid losing the property to foreclosure.
“Many landlords who are behind on their mortgage are in a dangerous situation,” claims an unnamed writer at SanDiego.com.
He or she also claims that because “property prices are going down, they are risking to go ‘underwater’ or ‘upside-down’ on their mortgage.”
By the way, a Zillow report finds that property prices slipped for one month (March) but still rose on a year-to-year basis. It’s a bit early, in our opinion, to claim that “property prices are going down.
But, if they do, the unnamed writer’s prognostication could spell doom for many small landlords.
It’s up to you to let them know that selling the property now is their best option. Now, while prices are still at all-time highs and buyers are in the market.
Here are some tips on how to better leverage landlord leads.
Another enticement to sell for weary landlords is that, right now, they’re most likely sitting on substantial equity.
“The average 2012 homebuyer is now sitting on $141,000 in home equity,” according to Alcynna Lloyd at HousingWire.com, citing a Redfin study.
She calculates that figure represents an increase of 261%.
Impressive, right? It will be equally as impressive to the landlords you pursue for listings in this, hopefully, post-lockdown market.
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