How the U.S. Government Shutdown is Impacting Real Estate Across the Country
Summary
The U.S. government shutdown is impacting the real estate market, potentially affecting rental payments and causing delays in housing programs. Hosts in states like Florida, which rely heavily on real estate, should prepare for potential disruptions and understand their rights regarding Section 8 tenants.
Key Insights
- •Small investors and landlords without deep reserves could be particularly vulnerable during a government shutdown.
- •Real estate accounts for nearly 20% of the U.S. economy. The lapse of the National Flood Insurance Program could be devastating in states like Florida.
Action Items
- ✓Plan for payment of operating expenses from a property reserve (it could be in the form of a loan) until you get reimbursed.Effort: mediumImpact: medium
- ✓Document everything, including rent receipts, HUD letters, and defaulted payments from HUD.Effort: lowImpact: medium
- ✓Stay updated with local authorities about funding and payment schedules. Check the authority website for updates.Effort: lowImpact: medium
- ✓Keep an honest, open discussion with tenants to maintain trust and manage uncertainties.Effort: lowImpact: medium
Common Mistakes
- ⚠Landlords cannot evict Section 8 tenants or enforce rent hikes during a government shutdown. Landlords cannot penalize tenants for delayed federal payments or ask tenants to make up the shortfall.
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