Federal eviction moratoriums lasted nearly 18 months, from early 2020 through late August 2021. Even after the federal eviction moratorium ended, many cities and states continued preventing landlords from enforcing their lease contracts.
Some cities went so far as to use federal tax dollars to give free legal aid to tenants to fight lawful evictions long after moratoriums ended. And that’s even after taxpayers paid for nearly 10 million rent assistance payments, albeit months after it did many landlords any good.
But that’s behind us, right? Never to happen again?
I don’t believe so. The precedent has been set, and eviction moratoriums are now in the government’s playbook. When it becomes politically expedient to do so—and it will, sooner or later—politicians will pay that card again.
It even makes a twisted sort of sense. Over a third of the U.S. population are renters, while a tiny fraction of that are landlords. And one of those groups is politically sympathetic, while the other is reviled.
Five years ago, no real estate investor considered eviction moratoriums a risk. Today, you should bake it into your investing calculus as one more risk and take steps to mitigate it.
As you invest moving forward, keep the following options in mind to reduce your risk of lease agreements becoming enforceable only by renters.
1. Invest in Commercial Real Estate (Not Offices, Though)
Pandemic-era eviction moratoriums only applied to residential leases. Commercial investors could still enforce their leases.
And no, that doesn’t just include office space, with all its current troubles. It also includes self-storage facilities, industrial real estate, retail space, hotels and hospitality, restaurants and bars, and beyond.
Of course, each one of those subcategories comes with its own unique risks and rewards. But one risk they don’t have is eviction moratoriums or the government handing money to tenants to fight…