Property Management Blog

FELLOW LANDLORDS FACING THE CORONA COMA: Update on “We Don’t Know What We Don’t Know!”

KRS Holdings - Monday, June 22, 2020
Property Management Blog

In our May Newsletter, I expressed the conviction that no individual and no institution have any idea where C-19 will take us, when it will end and what life will look like after the defeat of the Corona Coma. As a manageable planning horizon for residential landlords, my target is rental market expectations through 2021. This month, my intent is to share with you how things have progressed over the last 30 days and real or expected effects on the residential investment scene.

Here are the top 8 issues as I see them. As ever, your thoughts are welcome!

  1. Stimulus
  2. Unemployment
  3. Single Family Home Investment Opportunities
  4. Inflation
  5. Supply Chain Issues
  6. Eviction Regs
  7. Demonstrations/Protests
  8. Coronavirus Redux

In this issue, let’s tackle the first three. The remaining five are all “in-play” daily as new data, regulations and demonstrations in the streets continue to unfold. We’ll save those for next issue.


In the face of historically high C-19 related unemployment, coupled with unprecedented mandates for many businesses to cease or at least curtail operations … several government financial initiatives were implemented.

Employers have been and continue to be encouraged to keep employees on the payroll by automatically participating in three main support programs:

  • Paycheck Protection Program (PPP)
  • Employee Retention Credit
  • Paid Sick Leave & Family Sick Leave Credits

Likewise, unemployment benefits for C-19 displaced workers have been generously expanded.

Admittedly it’s early days, but if history is any predictor of the future, expect government to be expanded, not abandoned. A case in point … earlier this month the PPP requirements were changed by unanimous vote of the Congress resulting in significant flexibility to make it easier for more borrowers to reach full, or virtually full, loan forgiveness


The May jobs report was both unexpected and astonishing! U.S. employment surged by 2.5 million jobs across a cross-section of industries including retail, construction, health services and leisure/hospitality. Percentage-wise, the drop was from 14.7% in April to 13.4% in May.

This is in stark contrast to the expectations of most economists who anticipated a jobless rate hike up to 20 percent … and another 8 million or more pandemic-related job casualties. Apparently, America is on the mend!

Single Family Home Investment Opportunities

Multi-family residential investors are faced with lenders taking a more cautious, defensive approach and tightening credit … that means developing new relationships is tough. Larger investors aren’t able to secure 30- year fixed rate loans … 5 years is the likely maximum with adjustable rate mortgages as the alternative.

That’s not the case for individual single-family home investors (landlords or owner occupants) who may qualify for 30-year Fannie Mae/Freddie Mac loans. That is especially significant in this climate of the lowest interest rates in several generations … less than 4%!

Admittedly, low rates drive upward pressure on sales prices as lower payments qualify more people for larger loans. So, you may face escalated prices from the recent past, but remember future appreciation in your asset will be based on the higher valuation.

In the aftermath of the coronavirus coma, there is evidence of an unprecedented trend that may drive demand for single-family home rentals offering the space and convenience of a functional home office … rather than the confines of apartment living.

HR experts anticipate that organizations that did not allow employees to work from home before the pandemic will have a difficult time enforcing that policy after COVID-19. This unexpected work-from-home mandate has forced many companies to accept remote work as a matter of business continuity. To recruit and retain employees in the future, those same organizations will continue a policy of flexibility for employees to choose their work location.

Be sure to read this story about how a local RVA company, Elephant Insurance, is extending its stay-at-home work strategy through year-end for its 650 employees. Reason: No loss of productivity coupled with increased safety for workers. We’ll see how this example may become the norm for other employers as well.

As facts continue to unfold, I’ll be in touch to keep us all abreast of how to best prevail

in preserving our investments, maintaining positive cash flow and helping

our renters get through these next few months.