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Owning + Managing Rental Property Is Recession-Proof

The Nexus Property Management Business Model Continues Strong Even During Recessions. 

 

During this most recent Coronavirus pandemic many industries have suffered a brutal financial and mental beating. Such industries include the airlines, hotels/hospitality, restaurants/bar, nightclub, sports, music artists/arenas, and beyond. This has caused one of the most abrupt halts to the global economy in the history of mankind! With that being said, I plan to outline in this article how the Nexus Property Management business model has not slowed down by any means, but multiple parts of our businesses have picked up during this crisis. When selecting a business to operate in (and invest your life savings) you want to ensure that it has as much insulation as possible from external factors. All businesses have risk, however, as we’ve come to see, some businesses truly are impenetrable (financially) even in the most dyer circumstances.  

 

  1. Housing Becomes Priority #1 – When fear and anxiety set in about your job, your child’s schooling, your healthcare, your utilities, your food, your medical supplies, and beyond, there is 1 thing that we all need no matter how bad things get; HOUSING! We all need a roof over our head no matter how good or bad things may be. The nights out on the town, vacations, travel, and hobbies all are quick to take a backseat when things get serious. What we’ve seen is that there is a great deal of tenants paying EARLY for April rent compared to normal months. This shows me folks are getting serious about their housing and want to ensure it remains uninterrupted. As a matter of fact, we have also seen an uptick in the number of rentals available for lease, and the amount of applicants applying!
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What we are seeing now in Rhode Island is that all non-essential businesses are closed. So, pretty much we can go to the supermarket, Walmart, pharmacy, get gas for the cars, and go to home improvement stores like Lowe’s or Home Depot. For the last 2 weeks this has been my life. I have been restricted by the government as to where I can go, and in turn, where I can spend my money. So, doubly, as a property management franchise owner (and rental property owner) you are benefitting because your chances of receiving the rent increase when there are fewer disposable opportunities for tenants to spend it on. Then, couple that with the fear/anxiety those tenants may have about being homeless. In sum, they have less places to spend money, and likely will pay their rent over everything else to ensure they have shelter. Not many businesses can make this claim about their products + services.

 

  1. Minimal Government Intervention Can Happen- As of right now here in Rhode Island the worst thing that has happened to us rental property owners/managers are that the eviction calendar has been suspended until April 17th, 2020. What this means is that the courts are not open for these ‘non-essential’ matters until the middle of next month. If your tenants have paid for March rent, then that doesn’t affect you at all. The bottom line here is rent is still due, and ultimately if tenants do not pay you can take them to court for evictions as normal.

 

Nexus Nvest® Real Estate Investing Service

 

In addition to that, there really isn’t much the government can do to restrict us as a business or the way our property owners choose to operate. The property owners are private investors and oversee their own destiny. Even with the quarantine/non-essential business closures us as a property manager can continue to operate because we are considered critical. We fall under this subsection of public works exemptions:

 

“Workers such as plumbers, electricians, exterminators, inspectors and other service providers who provide services that are necessary to maintaining the safety, sanitation, and essential operation of residences, construction sites and projects, and needed facilities”

 

After this, as I mentioned previously, home improvement stores continue to operate as normal because they are essential. So, our workers can continue to go about their business, and have no interrupted supply of getting materials for their job. That is a very crucial and important benefit of operating a property management business. You have insulation in times of crisis to work and get your supplies concurrently!

 

  1. Recession = Investment in Rental Property- Nexus was founded and made its growth spurt during the tail end of the last recession in 2013. What we saw during this time was that investors were scooping up great properties for below market prices and ensuring their family’s future was insulated by the rental income and eventual appreciation on the home value they would obtain. I purchased my first property in 2015 for $175,500. It was a 4-family property. Fast forward to today it was recently appraised just under $300,000. All the while I was collecting rental income, and now, I have the opportunity to sell it for a massive profit, or refinance to take the equity and buy another. This was all made possible due to the recession. When times are bad people buy property because it is tangible; like how they buy precious metals.

 

In sum, there are very few business opportunities that can assert they can grow + operate while remaining unaffected by any conditions of the economy. When you own a Nexus Property Management you are taking the first step in being in business for yourself, but not by yourself. We provide services 24/7/365 to homeowners and tenants alike, and for that we are rewarded greatly. You too can be safe, secure, and successful. Contact us today to learn how you can get started!

 

Gregory Rice is the Vice President of franchise sales for Nexus Property Management™.  

Nexus Property Management™ is a National Property Management Franchise that manages all types of rental property from single family homes or condos to large apartment buildings and complexes.

 

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