There will always be situations that change the state of Houston’s housing market. However, the current coronavirus pandemic has made one of the most dramatic impacts ever seen. Some experts say the negative impacts are mostly caused by fear, but potential home buyers and renters have a good reason to be concerned.
Even with a federal moratorium on evictions, there is no guarantee homes won’t go into foreclosure at some point. At some point, the accumulation of unpaid rent and mortgages will need to be paid back. At that time, if the payments can’t be made, foreclosure will be inevitable.
With millions of people out of work, and no sign of the economy going back to normal, people are afraid to take on more debt. If you’re going to rent or sell your Houston property in the middle of an uncertain economy, here’s what you need to do.
1. Highlight the perks that appeal in an uncertain economy
Under normal circumstances, you’d advertise the perks people want most, including good schools, quiet neighborhoods, and proximity to shopping centers. In an uncertain economy, these perks take a backseat to things like being close to major job centers, and having enough land to grow a vegetable garden.
In an uncertain economy, people are thinking about their long-term survival. Potential buyers or renters might be looking for:
- Large pantries to store canned goods in large quantities
- Large yard space sufficient for planting a vegetable garden
- Space for an external freezer to store food
- Solar power, passive heating, or any alternative systems that store energy
- Walking distance to retail spaces for potential employment opportunities
- Good insulation to limit the use of HVAC systems
- Gas-powered appliances that can run on propane
Don’t bury these appealing features in your listing. Highlight them prominently. For example, when your listing is viewed by people who want to grow their own food, they’re going to look for space to grow their garden. If your pictures and descriptions don’t overtly demonstrate adequate space for a garden, they’ll probably just move to the next listing.
By advertising perks that appeal in an uncertain economy, you’re increasing the chance of selling or renting your home.
2. Raise your standards for credit scores and income for renters
If your rental property is currently empty, consider raising your standards for credit scores and income. Although raising your standards can make it harder to find a qualified tenant, it’s a good long-term strategy to mitigate the potential for unpaid rent.
When you require a renter to earn income equal to three times the rent, you’re in a better position than having no income requirements at all. Say your rent is $2,000 per month. A qualified tenant would need to make a minimum of $6,000 per month. Considering the majority of unemployed people have been laid off from retail jobs, someone earning $6,000 per month is more likely to have a job that survives an uncertain economy. When that same person has an exceptionally high credit score, you know they’re also responsible with paying their bills. This is a winning combination.
If you rent your home right now to someone who meets minimal requirements, you could end up with an unemployed tenant next month. With a federal moratorium on evictions, that means you can’t just get another renter. In this case, you’d end up with no rental income for at least several months, possibly longer.
Just like the rest of the world, Houston’s economy is suffering. However, there are people who have steady jobs, money in the bank, and are capable of maintaining mortgage payments. You will find these tenants by raising your standards for credit scores and annual income.
3. Don’t list your property cheaply to attract buyers or renters
Although the COVID-19 crisis has created an unemployment problem, you don’t need to undercut yourself on your rent or sale price just to get a tenant or buyer.
Many cities, including Houston and other areas of Texas, are experiencing a surge in home sales. Home sales are up because people are afraid there will be a repeat of the last recession that hit in 2007. As a result, there are actually more buyers than homes for sale.
With a limited supply of available homes, buyers are engaging in serious bidding wars and competition is fierce.
Whether you’re trying to sell or rent your home, don’t drop your price below market value. There are plenty of people willing and able to pay full price for what your property is worth.
4. Hire a property management company
Trying to sell or rent your home under normal circumstances is hard enough. When you’re in the middle of an uncertain economy, the task may feel overwhelming. What if you choose the wrong tenant? What if the buyer loses their job next month? These are valid concerns that will be put at ease when you hire a property management company.
Being a landlord isn’t easy, and neither is trying to sell your home. A property management company essentially gives you your life back and helps you turn your property investment into a source of passive income.
Contact Green Residential for help renting or selling your Houston home
If you need to rent or sell your Houston property, we’re here to help. At Green Residential, we’ve got decades of experience renting, selling, and managing homes in the greater Houston area.
If you’re looking to sell, we can save you thousands of dollars in closing costs. If you’re looking to rent, we will thoroughly screen all applicants to find a high-quality tenant. If you already have a tenant and you just need some help, we’ll take over your landlord duties so you can get back to your life and start generating truly passive income from your property investment.
For more information about how we can help, contact us for a free property analysis. We’ll review your information and contact you to discuss your needs and explain exactly what we can do to help.