How the COVID-19 Pandemic has Affected the Oahu Rental Housing Market

September 9, 2021

Like so many sectors of the economy, Oahu’s rental housing market has been affected by the COVID-19 pandemic.

How the COVID-19 Pandemic has Affected the Oahu Rental Housing Market

Financial burdens for property owners

In the early months of the pandemic—back in spring of 2020—many tenants across Oahu were facing financial hardships, including job loss. With some tenants unable to make their rent payments, the financial burden of mortgage payments (for financed properties), necessary repairs and general upkeep fell squarely on the shoulders of property owners. Additionally, Hawaii Governor David Ige instituted a moratorium on evictions, which prevented property owners from evicting tenants for non-payment of rent during the pandemic.


Needless to say, it’s been an especially trying time for Oahu landlords, as most State and Federal protections have not been extended to them. This has made it difficult for landlords to enforce rules and collect rent that is owed to them.

 

Value of a property manager in tough times

In this challenging rental market, having a knowledgeable property manager on your side is key. One of the many benefits of using a property manager  is that property managers are trained to have difficult conversations with tenants while ensuring that landlord-tenant laws are adhered to. Our managers can act as mediators to make sure that property owners’ best interests are protected while tenants’ rights are upheld.


Early in the pandemic, our experienced property managers reached out to property owners who were able to offer rental forbearance and rent reductions. Together with property owners, our managers were able to place tenants on individual rental payment plans tailored to their financial situations. Fortunately, government and nonprofit organizations stepped in to offer rental assistance to those in need. These programs not only helped many tenants to get back on track, but helped to keep them current on their rent. Some tenants were able to prepay their rent until the end of the year.


Locations’ property managers have been highly successful in collecting overdue rent payments for our Oahu clients. Only half a percent (0.5%) of our tenants were four or more months behind in rent payments as of August 2021.

 

Rising home values could displace renters

As we’ve emerged from the worst of the pandemic-induced health and economic crisis, an interesting shift has occurred in the housing and rental markets. The Oahu housing market has rebounded (and then some!) from the effects of the pandemic, reaching record-high median prices for single-family homes and condos in May 2021. Rising home values, cash offers and homes sold for above the asking price, have led some property owners to consider selling, which could displace many long-term tenants. If fewer rental properties are available, rents will likely tick up further.

 

Strong demand, limited rental inventory

There’s always been strong demand for housing, and rental housing, in Hawaii. As remote work has gained in popularity during the pandemic, many workers—particularly high earners—have found Hawaii to be an ideal work-from-home location. Hawaii’s relatively low COVID-19 rates, desirable weather and abundance of outdoor recreational activities has attracted an influx of remote workers. As demand for rental housing on Oahu continues to climb, rents are likely to increase, too.

 

What’s next for Oahu’s rental housing market

Oahu’s rental housing market is likely to get more competitive as housing prices climb and for-sale inventory remains low. It’s not unusual for us to receive multiple applications per rental property—one indicator of strong demand.


Like home prices, rental rates vary greatly by neighborhood, but overall Oahu rental rates have increased by one to three percent.

Oahu property owners who are still managing their own properties owe it to themselves to consult with a licensed, reputable property manager, like the professionals at Locations, to ensure their investment is performing to the best of its ability.


If you’re thinking of listing your property for rent, contact Locations Property Management to see how we can help you to maximize your rental income.

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