Recent massive mortgage company layoffs have some real estate workers worrying if they will be next - but it’s business as usual in the single-family rental market.
Dozens of lenders, including giants Rocket, Lower.com and Better.com, have let go of hundreds or thousands of employees to cut costs amid unfavorable market conditions.
Talk of a recession has been doing the rounds. According to a KMPG survey, 91% of CEOs in the US agree that one is imminent and more than half plan to reduce their staff over the next six months in preparation for the worst.
Within the property industry, PropTech startups and brokerages aren’t immune to the housing downturn or recession concerns either – Pacaso, Divvy Homes, Compass, and Redfin all announced job cuts since September 2021.
But the worst affected companies all have something in common: they rely on real estate sales, and so they are heavily exposed to rising mortgage rates and slow existing home sales.
Rental-focused property businesses such as property management firms appear relatively unscathed. Prospective homebuyers are waiting out the economic storm by continuing to rent, so money flowing out of mortgage lending and sales businesses is ending up in the single family rental market.
Property management can provide recurring revenue in a tough sales market, helping real estate firms to come through a market downturn strong. And with the right technology in place to overcome growth plateaus, it can be a very profitable niche in good times too.
If you’re not already in property management, it’s not too late to recession-proof your business. Find out how you can banish time-consuming admin and earn stable income from residential rentals.
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Mortgage apps reach the lowest level in 25 years – HousingWire