w 10,000 tenants he says
Click here for Top Ten Discussions. CLICK HERE for Q & A Homepage
Receive Free Rental Owner Updates Email:  
MrLandlord Q & A
     
     
w 10,000 tenants he says (by Tony [NJ]) Apr 11, 2024 5:55 AM
       w 10,000 tenants he says (by Bonanza [NC]) Apr 11, 2024 6:33 AM
       w 10,000 tenants he says (by NE [PA]) Apr 11, 2024 7:19 AM
       w 10,000 tenants he says (by plenty [MO]) Apr 11, 2024 7:39 AM
       w 10,000 tenants he says (by RB [TN]) Apr 11, 2024 8:04 AM
       w 10,000 tenants he says (by ken [NY]) Apr 11, 2024 10:36 AM
       w 10,000 tenants he says (by Ray-N-Pa [PA]) Apr 11, 2024 6:01 PM


w 10,000 tenants he says (by Tony [NJ]) Posted on: Apr 11, 2024 5:55 AM
Message:

moneywise.com

'This is the stuff that doesn’t show up in headlines': This real estate expert has 10,000 tenants across America — here's what they're telling him about the US economy

Vishesh Raisinghani

6–7 minutes

2024 is not like 2008

Having observed the 2008 housing and financial crisis, McElroy draws clear comparisons to explain why what's happening in 2024 is different.

"In 2008, we did not have a rent inflation problem because demand did not exceed supply," he says.

Back then, predatory private mortgage lending and unregulated markets created a housing bubble. When it burst, many homeowners were forced to sell and enter the rental market, McElroy explains. There was enough to go around.

This was followed by a period of little construction of new homes, which contributed to the "severe" undersupply of housing we see today. Household formations outpaced housing starts in 2022, according to Realtor.com. The gap between single-family home constructions and household formations grew to 6.5 million homes between 2012 and 2022. People who cannot afford to buy homes are pouring into the rental market.

He also pointed out other key differences in the economy during the two different periods.

The minimum wage is many states has risen. In the aftermath of the financial crisis, the unemployment rate reached 9.2% by November 2009. In contrast, the unemployment rate now stands at just 3.9%. The labor participation rate, or the percentage of the population employed or looking for work, is also down.

Unconventional solutions to unprecedented problems

McElroy’s data suggests renters are acting out in desperation because of the housing crisis. A surprising trend is the rise of fintech platforms that allow tenants to “finance their rentals,” he says. Flex is a platform he’s seeing more people use in recent years. “We would have never had to use a company like this before, but now it actually helps us,” McElroy claims.

He also notes a downturn in demand for single-bed and studio units in recent years as more renters have turned to cohabitation to afford rent.

People are “living with roommates,” says Shannon, the director of property management at McElroy’s company. “Even couples are living with roommates or moving back in with family.”

A 2021 survey by the NHP Foundation (NHPF), a nonprofit provider of affordable housing, revealed that 44% of American renters had been forced to turn to cohabitation as a result of rent affordability. More than half of these cohabiters were individuals with a total household income of less than $50,000 a year and 50% of that group entered into such situations less than two years prior.

Some renters have multiple jobs to make ends meet. Shannon says there’s a higher number of tenants within their portfolio with multiple jobs and income from gig work. Tenants are “working a lot more,” she says. “Doing their traditional job, and then having a weekend or night job where they're supplementing what they're not making or what they need to make above what they used to have to make because of the changes in the economy.”

Unfortunately, tenants with multiple sources of income are more complicated for McElroy’s due diligence team. He says there’s been a jump in fraud, with some applicants fabricating income and tax documents. The company has turned to third-party services to verify incomes and bank account statements.

The denial rate for applicants has also climbed, as applicants are taking their chances even if they don’t meet all the criteria for approval. “It's very different. It was never that way just a few years ago,” says McElroy. “This is the stuff that doesn’t show up in the headlines. If you look at the headlines, everything is just fine.”

Meanwhile, the eviction rate for existing tenants has also climbed substantially. McElroy’s team claims the monthly eviction rate for their portfolio currently stands at 17%, which is significantly higher than the five-year average rate of 3% or 4%.

“Our standards have not changed,” the economy has, says Shannon.

In summary, it's a difficult for anyone renting a roof over their head.

Vishesh Raisinghani is a freelance contributor at MoneyWise. He has been writing about financial markets and economics since 2014 - having covered family offices, private equity, real estate, cryptocurrencies, and tech stocks over that period. His work has appeared in Seeking Alpha, Motley Fool Canada, Motley Fool UK, Mergers & Acquisitions, National Post, Financial Post, and Yahoo Canada. --73.215.xxx.xx




w 10,000 tenants he says (by Bonanza [NC]) Posted on: Apr 11, 2024 6:33 AM
Message:

I have watched some of his videos. I think his tenants must be in lower economic brackets if he is seeing 17% per month eviction rate and if he is using Flex to help his tenants finance their rent payments. --65.188.xxx.xxx




w 10,000 tenants he says (by NE [PA]) Posted on: Apr 11, 2024 7:19 AM
Message:

What’s the name of McElroy’s new book? I don’t believe in the housing crisis, because it’s a political talking point. Blah, blah, blah. What I do believe in, is the qualified applicant crisis. I can verify that. I would like to say that 99 out of 100 do not qualify but I think it’s closer to 499 out of 500. --24.152.xxx.xx




w 10,000 tenants he says (by plenty [MO]) Posted on: Apr 11, 2024 7:39 AM
Message:

Notice in my area alot of very large buildings, built with one bedrooms. Are they thinking these families that are housing up together will spread out? Their expenses will double in these one bedrooms, the prices they are asking are crazy, of course they are beautiful, granite and tall ceilings, workout rooms, in unit laundry... Reading on here it's across the board applications "taking a chance" use to be they just screened themselves out but now they are not watching their pennies and just hand over the fee to apply as if they are defended but not responsible!?! This is gotta blow up. --172.59.xxx.xxx




w 10,000 tenants he says (by RB [TN]) Posted on: Apr 11, 2024 8:04 AM
Message:

Because they can. --69.130.xxx.xxx




w 10,000 tenants he says (by ken [NY]) Posted on: Apr 11, 2024 10:36 AM
Message:

17% eviction rate? somebody needs to be looking at how easy it is for deadbeats to get in the place, a young guy i know took a job as a leasing agent at a 300 unit complex and he said i am way pickier than they are.If they have 3x the rent,have first and security they are in as long as the landlord name they provide lines up with public records,no attempt to even call current or previous landlod,no background check etc --74.77.xx.xx




w 10,000 tenants he says (by Ray-N-Pa [PA]) Posted on: Apr 11, 2024 6:01 PM
Message:

Couch surfing is the slang --24.101.xxx.xxx





Reply:
Subject: RE: w 10,000 tenants he says
Your Name:
Your State:

Message:
w 10,000 tenants he says
Would you like to be notified via email when somebody replies to this thread?
If so, you must include your valid email address here. Do not add your address more than once per thread/subject. By entering your email address here, you agree to receive notification from Mrlandlord.com every time anyone replies to "this" thread. You will receive response notifications for up to one week following the original post. Your email address will not be visible to readers.
Email Address: