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In August 2020 we released the first Landlord Studio Residential Rental Index. This report looked at rent collection trends over the 8 months of 2020 collating data from over 10,000 active leases across the US.
The report reveals the impact of COVID-19 on rent collection trends. It also shows how economic policies enacted at a federal and state level have propped up the US rental market. However, this in itself sheds a worrying light on the future of the market as financial aid runs out and personal finances for many are stretched to the very limit.
“Our data shows evidence of an increasing number of missed or incomplete rent payments, especially in April and August. A trend has emerged that correlates with the federal economic aid and broader financial savings data,” said Charles Chan, CEO of Landlord Studio.
The trends outlined in this report align with the lockdown measures which were implemented in March and April in an attempt to curb the spread of COVID-19 which resulted in a rapid rise of unemployment within the US. Perhaps surprisingly though, May, June, and July rent collection rates remained stoic for Landlord Studio users despite increasingly evocative news headlines and a continuing rise in unemployment.
This is supported by additional data from our partner Rentprep whose tenant screening service is integrated into the Landlord Studio app. “Millions of Americans that have been hit hard by the pandemic, but landlords are continuing to seek and screen new tenants at higher levels than last year,” said Stephen M. White, CEO of RentPrep. “While we saw a slight 8% dip in growth at the beginning of lockdowns across the country, we have since seen 21% year over year growth for our tenant screening solutions. It’s evident that landlords are continuing to fill vacancies, despite all of the economic turmoil today.”
We can attribute the “business as normal” to a few factors. The CARES Act for example, pumped $2.2 trillion into the economy and offered temporary financial relief for many through the $1,200 stimulus checks and additional finances made available for unemployment benefits until the end of July.
To create the report we pulled aggregated anonymous data from our property management software for the months of January to August. This data represents over 10,000 active lease for residential rental properties spread across the US. We analysed rental collection trends looking for anomalous trends when compared to like data from previous years. To ascertain the reasons behind these trends we then explored salient contextual data to discover a clear correlation between the stay at home orders, unemployment, federal financial aid, and overall rent collection trends.
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