A research study shows that of small landlords with three or fewer properties, 56 percent are dealing with delinquent renters, according to a release.
The research from Nevada Realtors (NVR) was only for the state of Nevada, but points out how small landlords, often called “mom-and-pop” landlords, are carrying a heavier burden than larger corporate landlords. The National Multifamily Housing Council (NMHC) found that only 19.8 percent of tenants in professionally managed apartment units had not made a full or partial payment as of Aug. 6, 2021.
John Restrepo, owner of RCG Economics said his research, commissioned by Nevada Realtors, shows smaller landlords had to deal with greater disadvantages including higher vacancy rates, higher rates of delinquent payments, and more renegotiated leases.
“So, the impacts are pretty significant on these mom-and-pop landlords,” Restrepo said in the release. “It was really striking to us how much more they were affected by the moratorium.”
The survey, while small and confined only to the state, did include 140 property owners representing nearly 22,000 residential units across Nevada.
NVR President Brad Spires said small landlords have suffered more than their share of these economic hardships and typically have fewer resources than owners of multiple-unit developments and apartment communities.
“We know from experience that these state and federal eviction bans have been devastating to property owners,” said Spires, a longtime real estate agent based in Gardnerville, Nevada. “This research helps us put this damage into perspective from an economic point of view. It shows that everyone involved is suffering financial harm, including tenants and owners of apartment communities. But it reinforces what we’ve been saying throughout this pandemic about the disproportionate harm these policies have had on individual property owners who depend on rental income to survive.”
The report also estimated that the ongoing ban on evictions as still mandated by the Centers for Disease Control (CDC) has already cost Nevada and its economy at least $511 million in lost economic output.
Small landlords and delinquent renters: Highlights of report
- About 41 percent of all rental properties nationwide are owned by individual investors, or what the report classified as “mom-and-pop” landlords.
- According to research from the Brookings Institution, about 33 percent of these individual landlords have an income of less than $90,000 per year and rely on rent from their tenants for 20 percent of their annual incomes. “The research indicates that many of these landlords may simply lose their properties,” the NVR report found.
- Nevada landlords were forced to forgo an average of $422 per unit from the beginning of the pandemic in March 2020 through February 2021.
- That amount of missed rent due was much higher for owners with only a few units, who missed out on an average of $1,870 in rent per unit during this time to delinquent renters.
- In addition to reduced spending, state and federal eviction bans in Nevada have resulted in a loss of an estimated 1,430 full-time equivalent jobs and an estimated $39.1 million in associated earnings to date.
- Based on lost wages and economic output during 2020, the eviction ban in Nevada cost the state a projected $12.6 million in lost sales and use tax revenue last year.
- The tax hit could have been even worse; despite dealing with delinquent tenants, the report found that most landlords have continued to pay their property taxes.
