The Covid-19 pandemic has brought many changes in the marketplace.

Change creates opportunity for those willing to embrace it, but can bring despair for those unwilling to accept change.  

In the early 1900s there were many icehouses in the country.   These were businesses that provided blocks of ice so that customers could keep their food cold and prevent it from spoiling.    It was a thriving industry at the turn of the century.  A few decades later refrigerators became available.  People preferred electric refrigerators over replacing blocks of ice and eventually the ice houses went out of business.


The pandemic has caused me to reflect on the book, “Who Moved My Cheese?”, by Dr. Spencer Johnson.  When the cheese moved in the maze in which the mice lived, some of the mice just sat there and complained.  Other mice went looking for the cheese in new places.

We have had significant changes during the pandemic.  Some spurred by technology and others imposed by the government.  

Regardless of the source of change, we have a choice.  We can sit and wait and complain.  Or we can recognize things have changed.  In the end we will have either results or excuses.  And excuses don’t count.

So what are some of the main lessons in the book that we should recall and consider how to apply them?

Don’t get fixated on what you have.  Always be looking for new opportunities.  And keep moving.


What are the changes that we see in the marketplace?  Which will become permanent and which are only temporary?

At this time vaccinations are available for everyone over the age of 12, and 70 percent of the people in the US have received at least their first shot.

We are not just looking at real estate, but also other lifestyle factors that will continue to have an impact.

Zoom – More people are working from home and many want a dedicated office at home.  Since people are working remotely they can live just about anywhere, not necessarily in the same town where a large corporate office lies. Many companies can get by with less office space.  So there is a shifting demand to use less office space.  What will happen with the office space that companies no longer require?  Will it be converted to apartments or some other use?  

New construction continues. New apartments are mostly Class A.  New home construction also continues.  Cost of materials remains high as there are shortages affecting lumber, appliances, and other supplies.

Home prices remain high with a very limited supply.  A 2-month supply of homes is considered healthy.  During the great recession a 5-6 month supply was observed in many places.  Now the supply is only maybe two or three weeks.  Houses are being sold to institutional buyers who pay cash.  Would-be homeowners are getting squeezed out of the market as prices rise amid the low inventory.

The CDC eviction moratorium has also caused some landlords to rethink their strategy.  Some are deciding to take advantage of the higher prices and cash out of some properties.  This is a good time to sell your “dogs”, or less desirable properties.  Other landlords are considering alternate uses for their properties, such as short-term rentals.

There are still a significant number of mortgages in forbearance.  Some people believe there is a wave of foreclosures around the corner.  However, unlike 2009-2010, most homes have been increasing in value and the homeowners are not underwater.  It will be possible for many of these homeowners to work out a loan modification or sale and avoid having a foreclosure on their credit report.

Rising wages and falling dollar 

As of April 2021 the US has released over $5.2 Trillion in stimulus spending since the pandemic began.  

Companies are finding it harder to hire new employees and are having to increase wages.  This is not surprising after many people received stimulus checks and many also received significant unemployment checks.  These people have had a low incentive to return to work while the checks are coming in.


How are you choosing to adapt to changes in the wake of Covid?  We can choose to simply survive the changes.  Or figure out how to thrive and make our business better by capitalizing on new opportunities..

One simple change is renewing leases on a month-to-month basis instead of annual leases.  This makes it easier to evict, if necessary.  Some landlords are finding that this makes it easier to keep rents more in line with a rapidly increasing rental market.  Rents in some areas are up 25 percent from a year ago.

Another change is raising the bar with our requirements for new residents.  Don’t just accept anybody with a present job or cash.  We want to be certain their income will continue.  With Attune Investments, we are increasing the criteria for our new residents with good success.  The demand is high in  our markets and we can be more selective.

Watching for alternate investments when the available properties in the market do not meet our criteria.  This can lead to private lending or joint venture opportunities.  One we have been exploring is motel to apartment conversions.  We are reading about others finding good opportunities here.

We have recognized that inflation is increasing our costs for repairs, renovations and payroll.  We are also expecting higher taxes in the upcoming years.  Start raising rents as soon as practical.  

We are also looking in different markets where we expect strong growth for the next 10-15 years.  We want to be invested in the path of progress.  For that we look at where industry and jobs have been growing, and cities that are proactive in creating an atmosphere that makes people want to move there.


What are you doing differently in the market today?

If you want to learn more about how others are investing with us then I invite you to join our club and request a conversation with us.

Through the power of a syndication, a partnership with other investors like you, working with managing partners who are experienced in managing apartment complexes, you can own multifamily assets.

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