High inflation and rising living costs have taken a toll on households across the U.S., impacting both tenants and landlords alike. To help tenants with their rent payments, federal eviction protections were set up during the COVID-19 pandemic. Yet rental aids are no longer valid nationwide, so collecting rents has become increasingly difficult for property owners in the U.S.
So, what does it take to be a landlord in times of economic uncertainty?
Our research team used internal Legal Templates data to gauge rent price increases across the U.S. and see how they might have contributed to the rising eviction and late rent notices in 2022. We also surveyed more than 300 landlords to understand how the state of our economy is impacting renters.
Keep reading to learn more about the rental process and what to consider if you’re owning rental properties right now.
Being a Landlord in 2022: Top Things to Consider
1. Rising Living Costs
Higher home prices have caused the cost of rent to rise considerably in the past year, and it is not expected to decrease anytime soon. Landlords can determine how much rent to charge based on the lease agreement they have with their tenants, but they also have to comply with landlord-tenant laws.
Let’s see where rent prices have increased the most in recent months.
Hawaii topped the list, with their rent increase notices up by a staggering 875%. Hawaii’s housing costs are already well above the national average, which makes the effect of rent increase all the more burdensome. At 625%, Arkansas ranked second for its rise in rent increase notices, followed by Florida (211%) and Oklahoma (192%).
Surprisingly, some states known for having a high cost of living had a lower percentage of rent increase notices in 2022. For instance, California experienced a 76% rise in rent increase notices. This is significantly lower compared to the states that topped the list but could be owed to their relatively strict fair housing laws.
And while decreases in rent increase notices were uncommon, some did occur; renters in Wyoming saw the most significant decline this year (-75%).
More than 8 in 10 landlords said they increased a tenant’s rent price in the past year. Nearly half — 46% — said they were just trying to keep up with the rental market, while almost the same number said they raised rents to meet their financial needs. Nearly 1 in 3 landlords, however, charged their tenants more simply because they felt like it.
Despite tough economic times, most landlords appear to be doing well financially and have maintained a positive cash flow. Nearly all of them (92%) said their rental income remained the same or increased compared to last year, and 87% were satisfied with the financial benefits of the job.
2. Late Rent Payments
Renters across the country found relief once government officials enacted eviction moratoriums. This temporary safety net ensured tenants wouldn’t become homeless during the pandemic. Still, many landlords issued late rent notices to tenants who didn’t pay on time—and in many places, they continue to do so.
Let’s see where late rent notices rose and fell nationwide this year.
Rhode Island was the top state for late rent notices, seeing a 692% increase in 2022. Rent prices there have been increasing recently as well, making it difficult for tenants to pay on time. Montana came in second with a 575% increase, followed by Delaware (543%) and Arkansas (420%).
In addition to the late rent notice, nearly half of the landlords we surveyed (45%) faced tenants that refused to pay rent. About the same number of landlords have dealt with bad tenants purposefully causing property damage or refusing to move out. Handling these situations can be tricky, but shouldn’t discourage property owners.
Having clearly defined terms in a signed lease agreement and conducting tenant screening and credit and background checks can help landlords attract responsible tenants and maintain a positive cash flow.
3. Increasing Eviction Rates
Evictions have become a reality for many people lately, some of them even going viral. In the last part of our study, we zeroed in on eviction trends in 2022 and determined where landlords stood on the issue of evictions.
On average, eviction rates increased by 36% since 2021, and evictions most often occurred because tenants failed to pay rent (61%). Vermont experienced the highest increase in eviction notices, topping the list with a 447% increase in 2022. Georgia (163%) and New Mexico (162%) followed next, and while their numbers were high, they were still lower than Vermont’s.
Meanwhile, some states showed a decrease in eviction rates: Michigan, Alaska, and South Dakota.
It takes a landlord time to ensure they’re within their rights to evict a tenant, and legal actions can also extend the process. Maybe that’s why, of the 75% of landlords who’ve evicted someone over the last year, 74% said the eviction process was difficult. Each eviction took an average of 19 days.
The Reality of Being a Landlord
Being a landlord involves more than collecting rent, finding tenants, and addressing emergency repairs. It also requires screening tenants and evicting those who fall behind on paying rent. This is no easy feat, especially as evictions require a deep understanding of state and federal laws.
Yet for many landlords, evictions are a necessary evil if they want to cover their property’s mortgage payments, property taxes, and maintenance costs.
As our data shows, the entire rental process is not going to get any easier. Evictions, late rent notices, and rent increases have impacted the outlook for the rental property market. With inflation increasing costs around the country, it’s hard to predict how becoming a landlord is going to get any easier. But staying on top of landlord-tenant laws can keep them a step ahead.
Legal Templates used internal data on rent increases, late rent, and eviction notices. We also surveyed 301 landlords for this study. When comparing the internal data from 2021 to 2022, we looked at both years’ first and second quarters.
About Legal Templates
Whether you need a template for a late rent notice, a lease agreement, or an eviction notice, Legal Templates is here to provide essential documents for landlords and tenants alike. We help you create contracts and legal documents in minutes, making the process easy and informative to ensure that you have what you need quickly and efficiently.
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If you’re a landlord or tenant interested in the rent hike and eviction trends this year and enjoyed our findings, you’re more than welcome to share them. We just ask that you link back to this page and that your purposes are noncommercial.