It’s expected that an $800 billion plus stimulus package proposed by President Obama will pass this week. Details of the final plan are sketchy.
A crucial question remains unanswered: How will the Stimulus affect landlords?
There are three possible upsides to the bill that may help with the current rental market:
Easing Unemployment May Increase Available Renters
1. Experts point to rising unemployment as a primary factor in current high vacancy rates. If the Stimulus creates or protects jobs, it could bolster the rental market.
2. Part of the Stimulus funding may be directed to extending unemployment benefits. This could keep renters in place and help them honor their leases.
Extending Tax Credit May Ease Glut of Rental Inventory
3. Another stimulus proposal is extending the home buyer’s tax credit, an incentive to aspiring home buyers that the NAR says is crucial to spurring home sales. Many investors would prefer flipping their properties to remaining reluctant landlords, and sales could reduce the overstock of rental inventory that is helping to drive down rents.
But these are short-term fixes. There are other factors that are hard to predict in the long run. What will the overall cost be? What are the downsides? What will the impact of the Stimulus plan be on landlords? Share you thoughts by posting a comment below.
See our feature, Rents Show Decline for First Time in Five Years.
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