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Rental property during quarantine: realities and prospects

Rental property during quarantine: realities and prospects

Rental property during quarantine: realities and prospects

There is no sphere of human life that has not been affected by quarantine and the coronavirus epidemic. The real estate market is no exception. The quarantine measures had the most tangible and immediate effect on the rental market. Which segments have seen the most change?

What to expect in the coming months?

With the start of quarantine, many landlords lost their customers, who, in turn, lost their source of income and, accordingly, the ability to pay for rented housing. Many have left the capital and large cities for the duration of the quarantine to their native regions. From this we can conclude that the cost of rental housing should be significantly reduced.

In reality, the situation looks different. For most landlords, renting an apartment at a reduced price during quarantine is not a profitable and troublesome business. They are not ready to set low prices for more than 4-6 months.

Often, customers are warned that the price will be increased to the old figures immediately after the quarantine is lifted.

Daily rent in today’s realities has lost its relevance and demand as much as possible. Some owners of such real estate are trying to rent apartments for a long time. The other part is inclined to postpone such a decision, not wanting to associate themselves with the need to evict people at the end of quarantine.

Daily rent always brings more income than long-term. Hoping for a short quarantine, apartment owners are often ready to wait for the market to recover from the crisis, not agreeing to less profitable options.

The events in the commercial real estate rental market are unfolding sadly. The closure of all shops and companies that do not provide services critical to the viability of the population and the city creates a problem with paying their rent. Most landlords are currently trying to step in and delay payments, and sometimes not charge money during the forced shutdown of their customers. It’s only for short periods.

Some tenants and landlords break the contract. A large percentage of those who continue to work are asked to review the cost of rent during the quarantine due to a decrease in demand for their services or goods.

Prolonged continuation of the quarantine will exacerbate the crisis in the real estate market, which will generally lead to a decrease in property prices and an increase in the available supply of commercial