The last two years may have held the economy hostage with mass layoffs, disrupted supply chains, and the real estate market's impending crash, things have changed for the better in 2022. Investors are no longer on their toes due to an unpredictable economy and many businesses, especially those operating in the service industry, have adapted to a work from home model. People are getting their jobs back and the economy has made significant recoveries.
So how does 2022 look for landlords? At Area Texas Realty & Management, we’re going to do our best to introduce you to some of the top considerations for landlords who are planning on making the most of 2022.
Work on the Tenant Screening Process
The pandemic shook the economy and many professionals are struggling to get back on their feet. But you have bills to pay and timely rental income is an important part of your finances. This means you need to work on the screening process based on a tenant's monthly income, stability of employment, and a history of responsibly paying their bills on time.
Note that the major credit bureaus will no longer report medical debt that was paid after it was sent to collections.
Remember, any late rental payments could result in an unpaid mortgage and disrupt your property's maintenance. While you can fall back on evictions, the entire process will take up too much of your time and maybe too expensive. A property manager will ensure that you only choose a qualified and responsible tenant from the get-go.
The screening process should include the following:
- credit checks
- analyze their financial habits
- check in with their previous landlords
- talk to their employer
Adjust Your Rent Price
With the pandemic in the rearview and the economy approving, the rent has been growing at an unprecedented pace. Surveys show that the rent rose by 33% from January 2021 to January 2022. The trend is mostly leaning toward larger rental units, but smaller apartments have also seen tangible growth.
2022 is a landlord's market and you can adjust your rental price - but don't go overboard! If you need further help determining whether to adjust the rent, contact your property manager. They know the market and can advise you about the best rental pricing strategy.
Make Those Repairs
Tenants expect rental units to be in good working condition. This means that everything from the refrigerator and HVAC system to the electricity and plumbing should be properly functioning. Now is also the time to make adjustments to your interior decor.
Picture the type of tenant you want to attract and make appropriate changes to the property. A property manager usually has access to vendors and handymen who can provide services at an affordable price due to economies of scale. Work with a property manager near you to learn more.
Buy More Properties
2022 is a good year to invest in properties or make improvements to your existing rental units. There is a never-ending demand for real estate and the growth will continue well beyond 2023 - as long as the economy is headed toward an upward trajectory.
Interest rates have also stabilized and are fairly low. This makes financing and mortgage rates more affordable, which is always a plus for investors. However, this could change at any time depending on the economy, so make sure to take advantage of low interest rates as early as you can.
Hopefully, the discussion above will help you define and refine your budget for the coming year and make it more profitable.
If you’re looking forward to applying the above for your rental property, you can always hire property managers to plan out the budget for you. This will leave you with more time to figure out how to serve potential tenants better, offering more affordability, more personalization, and authenticity as opposed to worrying about your rental income.
We strongly suggest hiring a property manager to streamline your rental income and improve your ROI. Click here to learn more about our services and how a property manager can help.