You wouldn’t believe some of the stuff landlords are doing to keep their heads above water these days—seriously, it’s wild. I mean, with rent control tightening its grip in some cities and the housing market still reeling from pandemic aftershocks, many property owners are finding themselves between a rock and a hard place.
Did you know that a recent survey by the Urban Land Institute showed nearly 45% of landlords reported struggling to cover maintenance costs in 2022? Crazy, right? And get this—some have started offering quirky services, such as pet-sitting or part-time co-working spaces, just to make ends meet.
It’s like they’re having to think way outside the box, and honestly, who could’ve seen this coming a decade ago? Well, buckle up because I’m about to tell you about seven of the absolute wildest ways landlords are staying afloat—some might just blow your mind.
Taking on a Second Job
A striking example of the struggles landlords face comes from Massachusetts. A landlord, after dealing with professional tenants who stayed rent-free for over two years, was forced to take on a second job as a financial analyst to meet his obligations. During this time, legal battles with the tenants depleted his savings, while property expenses continued to accumulate.
This case underscores an unfortunate reality: even those who invest in real estate cannot escape financial vulnerability. For absentee landlords managing properties remotely, late tenant payments aren’t just inconvenient; they can create cascading financial setbacks.
Selling Properties
Another trend among landlords is opting to sell off properties rather than face the mounting risks. The National Association of Realtors notes that small-scale property owners account for 41% of rental units in the U.S., making them particularly susceptible to revenue disruptions. Faced with losses and market volatility, many landlords view selling as the only viable exit option.
Experts caution, however, that liquidating properties in a saturated market can force hasty sales at lower profit margins. Despite this, many landlords prioritize immediate financial relief over continuing to manage problematic investments.
Increasing Rents (Where Possible)
Rent hikes are one way struggling landlords offset losses, although this comes with caveats. Market conditions and local rent control policies limit how much landlords can increase rental rates.
According to a 2022 report by Zillow, the average rent in the U.S. increased by 14% over the previous year; however, regulations in areas such as New York and California capped rent increases for many property owners.
Modest rate adjustments may help balance the books, but raising prices too high risks alienating existing tenants and driving up vacancy rates. Landlords must strike a delicate balance between operating costs and tenant retention.
Delaying Maintenance
Deferred maintenance has become a survival strategy for landlords seeking to reduce costs. Repairs that aren’t immediately urgent, like refreshing paint or landscaping, are often postponed to ensure mortgage payments and utilities are covered.
A study by the Joint Center for Housing Studies at Harvard University found that small-scale landlords, especially those owning properties with 1–4 units, are more likely to reduce property upkeep during financial downturns. This approach saves money initially, but it can lead to larger expenses down the line as deferred issues accumulate.
Seeking Government Assistance
Some landlords turn to government programs for financial relief. During the early stages of the COVID-19 pandemic, federal and state rental assistance programs disbursed over $46 billion to struggling landlords and tenants. However, not all landlords have found this route viable. Many report processing delays for applications, unclear eligibility criteria, and limited program reach.
For instance, a report by the Treasury Department revealed that only 36% of rental assistance funds had been distributed as of late 2021. These programs can offer a lifeline, but the bureaucratic challenges discourage many landlords from pursuing this option.
Negotiating with Banks
Landlords with mortgage commitments are increasingly turning to banks to request loan modifications or deferments. Many financial institutions are open to restructuring loan terms, but for long-standing clients in particular, this approach isn’t without risks. Restructuring can lead to penalties or extended loan repayment terms.
Experts recommend open communication with lenders to explore flexible solutions, particularly during periods of unexpected cash flow disruptions. Banks may offer repayment freezes, temporary interest-only periods, or reduced monthly installments.
Engaging in Legal Battles
For landlords dealing with tenants who default on rent, legal action remains both a last resort and an expensive endeavor. The average cost of evicting a tenant in the U.S. ranges from $3,500 to $10,000, including court fees and lost rent.
Legal proceedings can drag on for months, but they’re often necessary to remove problematic tenants and regain access to properties. However, these initiatives take both financial and emotional tolls on landlords who may already be stretched thin.
KEY TAKEAWAYS
Landlords are juggling multiple jobs: With rising costs and tenant issues, some landlords are taking on second jobs to cover their financial obligations.
Property sales are on the rise: To escape mounting risks, many landlords are selling off properties, even if it means accepting lower profit margins due to market saturation.
Rent hikes are a tricky move: Some landlords raise rent to offset losses, but market conditions and regulations make it a risky balancing act that could drive tenants away.
Deferred maintenance is a survival strategy: With financial strain, many landlords are postponing non-urgent repairs, which could lead to more significant, costly problems down the road.
