Many experts have stated that a recession is likely to impact our economy within the next few years. Despite the negative affect that a recession has on many lives, it generally doesn’t have quite as devastating an impact on the housing and rental market. It may slightly determine changes in average rent and interest rates, but an economic recession is more likely to impact the unemployment rates than the housing market.
The Demand for Housing
Whether or not a recession impacts the economy, there will always be a need for a place to live. Houses are not being built at a rate that exceeds the necessity for them, which means that the housing market is likely to continue flourishing. Some experts state that home prices may drop slightly, but most agree that the impact will be slight. Though many recessions have occurred throughout recent decades, very few of them have impacted the housing market. Additionally, the recession may actually benefit the rental market, as people may wait to purchase a home until more stable economic times.
How to Combat the Recession
As a landlord, there are many ways that you can prevent the recession from negatively impacting your business. Vacancies are ultimately what will lose you money, so the satisfaction of your tenants is incredibly important during this time. A recession will have a greater impact on the budgets of tenants than their need for housing, so you may want to consider lowering rent, as a tenant that pays lower rent monthly will still bring in more money than a vacant unit. Consider what amenities you may be able to provide that will encourage your tenants to stay in your rental property. Ensure that you are doing thorough research and ensuring that your rent prices are comparable to those of your competitors.
Hearing about an economic recession can generally cause panic and concern for many people, especially those who have not yet fully regained their standing after the recent Great Recession. Fortunately, not all recessions will have the same severe impact as the Great Recession, so there is no reason for landlords to begin to panic. To learn more about how to maintain a healthy business despite the looming recession, contact us at the Keyrenter in San Diego today!