Multi-Family Investing in the New Coronavirus World
 By David Larson

The next 60 days will be telling as to how the real estate market will react to the fallout of the Covid-19 pandemic. The impact will hit certain sectors more than others.  Putting on my fortune teller’s hat I see little impact in the industrial market. Reno-Sparks is positioned well for growth in the industrial market, with lower taxes and a more business friendly environment than surrounding states, the industrial market should do well. Recently, warehousing has seen a boom in our market. This boom will continue, consumers became more used to shopping online during the pandemic and will not fully switch back to brick and mortar stores for all their spending. Retail businesses as well as the real estate they occupy will take a large hit.  Single family homes priced below $400,000 will show resilience, as we have an undersupply in this market that will continue. Higher end home sales will suffer. 
   With so many people out of work and people living paycheck to paycheck, collections of lease payments and rents in apartment properties will suffer. Surprisingly, as of this writing on May 7^th, the number of tenants delinquent in payment in Reno and Sparks is lower than I would have expected with approximately 95% of the market paying. I believe the 5% delinquency rate will rise in the next few months even after the bulk of the workforce go back to work.
   Investors are nervous. Money is sitting on the sidelines waiting for the results of the pandemic to play out. With collections down and demand for apartments currently waning there is nowhere in the short term for apartment values to go but down.
   In the long run apartment values will rise. Because of our diversifying economy the Reno-Sparks market will continue to grow, attracting new companies and jobs. People need a place to live. With the high rents that are required to make a new apartment complex profitable, the older complexes which command a lower rent will be in high demand for renters and eventually investors. In the short run we will be in a buyers’ market. Like the financial crisis of 2008, the Covid crisis brings opportunity for those who can see beyond the doom and gloom.