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5 Things that will Impact Real Estate Investing in 2022

5 Things that will Impact Real Estate Investing in 2022

and what effects it will have on the market

At this time last year, I figured the world would be closer to being back to normal than it was. However, 2021 just ended up being a really long extension of 2020. So... what can we look forward to in 2022?

1) Evictions to start ramping up
For some tenants, having a reprieve of evictions for nearly a year and a half meant that when work wasn’t going so well, they could get back on
track and stay in their home. Unfortunately, we saw this taken advantage of more and more as Covid went on, and some tenants, without hardship, decided they were no going to pay. Since there was no recourse for the landlords, we were stuck servicing their work orders and not able to collect rent. We’ve had a few failed attempts at government assistance helping to pay the back rent, but this left over 50%, in our experience, still behind on their rent. Meanwhile, Mom and Pop landlords are struggling to stay afloat. All of this means we are going to see an increase in eviction filings over the next few months as the IDHA and Chicago grant money run out.

2) Repair prices will continue to rise
With Covid running wild, we were all worried about our health and jobs these last few years- and rightfully so! However, one thing that was not
expected was how low inventory would be for everything. We all remember the toilet paper scare in 2020. However, right now, almost any part made from plastic is back-ordered or has had a huge increase in price. Beyond that, The Great Resignation has caused labor prices to rise. In order to attract qualified workers, we are seeing our vendors pull out all the stops.

3) 1+2 = increased rents
Lost income from over two years, plus the cost of running a rental rising means that rental prices, which have stayed stagnant over the last two years for the most part, will increase.

4) Shift in what tenants want
With more and more jobs staying remote, tenants will be able to live anywhere they want. That means, they can move farther away from the city if they can’t find what they are looking for:

a) The biggest trend will be towards bigger homes
Tenants will be wanting to rent a house instead of a condo, and a two bedroom instead of a one.

b) Less focus on common areas
Because a lot of pools and exercise rooms were closed during 2020 and some of 2021, tenants will be looking more for a place to be with themselves and friends and not with their neighbors.

c) Safe packages are a must!
Whether it’s groceries or Amazon, the amount of things we order online now to avoid going to the store has increased a ton. This means having a way for packages to safely be delivered will be more and more critical moving forward.

d) Smart homes
I can write five articles on this. For many Millennials, if we can’t control it with our phones, then we don’t want it.

5) More institutional landlords
2020-21 took a toll on many small landlords. However, hedge funds were able to wait it out and are ready to pounce on the influx of properties
that I believe will be listed for sale in 2022. Unfortunately, these companies don’t always have the best services. And since they are owned by shareholders, nine out of ten times, they care more about the bottom line than the lives of their tenants. I think we will see a major shift, especially in single family homes, towards corporate ownership, and this will not be good for the overall being of tenants and neighborhoods.


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Want some more great reading material check out our post on working with section 8 tenants