The Landlord Lens - How Trump's Tariffs Will Hurt Landlords and Renters

Episode Date: March 7, 2025

Trump's tariffs will make it more expensive to be a landlord—and renters will feel the impact too. From rising construction costs to higher prices on appliances and materials, these tariffs are likely to squeeze the housing market. In this video, we break down how landlords and tenants alike are paying the price. Don't forget to like, comment, and subscribe for more real estate insights!

These are all going to raise, and this is going to negatively affect landlords. And they're probably going to pass that cost to the renter. So this could essentially be raising rent. There are a lot of tenants in the country. Hi, I'm Alex. I work at TurboTenant. I'm with John Martin. Yeah, I'm John. Good to meet you guys. The Trump administration has imposed major tariffs on China, Canada, Mexico. We've got 25% tariffs on all goods coming from Mexico and Canada.

but temporarily pause because of concessions they've provided, 10% on Canadian oil and energy. And we have a 10% tariff on all Chinese imports. And lastly, a 25% tariff on all steel and aluminum being imported in the U.S. Yeah, bonkers. Yeah. So, John, tell me what do you make of these tariffs and what do you think the impact will be of them on homeowners, landlords, renters? Yeah, dude. Lots of stuff.

But one thing I'll immediately call out is already impacting stuff, right? Like actual prices, oil futures right now just are up due to the announcement of the tariffs, right? So people are anticipating that the price of a barrel of oil will be more expensive. It's going to be a huge impact. I mean, steel and aluminum, like those are the things you build houses with. Lumber comes from Canada. 60% of our domestic lumber supply that we use in construction comes from Canada. So if you've been following the housing market, you know that we're drastically undersupplied when it comes to housing.

It's why rents are going up. It's not because landlords are greedy. It's not because we are all consolidating in one place with remote work. That's not the case. It's because we don't have enough houses. And so these tariffs are going to impact that. So that will have a long-term impact on the supply demand dynamics of the housing market. You're going to have continued pent-up demand.

It's going to impact landlords, the DIY landlords in the short term by just putting a tax on their rentals. Anything they spend on their rentals. If your tenant calls you in six months and says, hey, the microwave's out, you're going to need to replace that microwave. And it's going to be 10, 20 percent more expensive because guess what you need to build microwaves? Aluminum. And that's kind of ironic, right? because Trump ran on a platform of lowering inflation, lowering prices, lowering taxes, and essentially tariffs are going to raise a lot of these.

Yeah. Maybe not on everything, but we're going to feel this. Oh, yeah. And you're going to feel it in lots of ways. I mean, there were a lot of news stories during this inflation period where companies that did not need to raise prices, raised prices, because they just rode on the inflation thing. That's going to happen again. Yep.

you know, because you've just tested the market and it can bear more money. So that'll definitely happen again. But, you know, I'll briefly here to defend Trump. Like, we have not attempted to use our economic power as the most important consumer market in the world to change our fellow nation states' policies towards us. This definitely makes, there are people scrambling across. the country right now because the main buyer of the thing they make is going to force them to mark up their prices, function.

Yes. And that's going to lower their market power. It's leverage, right? And to the extent that Trump can use that leverage to secure concessions that matter to Americans is still to be seen, but, you know, there's some hopeful news with the concessions he's gotten out of Mexico with the immigration stuff. So. Well, let's talk about why Trump says he uses.

these tariffs, right? Because he's got a few reasons listed on White House.gov and, you know, bring jobs back, domestic jobs, stop the flow of drugs over the border, and also to hold undocumented immigrants coming over the border. These are some of the main reasons that, you know, he says he's leveraging these tariffs for. Right. But at what cost is kind of what we're saying, right? Because we have been struggling with inflation for several years. And it doesn't seem like this is good policy to combat that or rising prices. So what cost are we going to be using these tariffs to the regular consumer or homeowner? Yeah, I mean, it'll be the tune to like 10, 15, 20 percent increase depending on the good. It's a huge cost. His reasons, though, and I'll address

those briefly, the two at the end of halting illegal immigration and stopping the drug flow, we'll see. I mean, I don't know if that's a piece of the negotiating with China. It definitely has been with Mexico. I have no idea what kind of drugs come out of Canada, if any. So maybe domestic jobs can be brought back. Like there might be a cast of entrepreneurs listening to this, watching this unfold, thinking, okay, where are the markets where manufactured goods from states that are going to be impacted by these tariffs, China's, you know, UK, whatever, I've no idea what kind of exports they put out. But what are those things

that Americans buy will buy more of in the next 10 years and this tariff might actually last? These entrepreneurs are watching this like hot because they're thinking,

shoot, I can spin up a business. And that, you know, there's no reason to think that won't happen. Markets are efficient. But those companies when they're building in America, they're going to have to charge more

to the end consumer because the labor to employ an American is not the labor to employ a Bangladeshi. Yeah. Right? Like it's going to be four or five. six times more labor cost.

That's a great point. So I'm generally hopeful. I've never seen, this is the first like Western country to try this, right? To try to bring jobs back that they've shipped to India or China. Yeah. So it's going to be an interesting case study. But when your wallet and your, you know, your family's financial interests are wrapped up in it, it's pretty scary. And we get the majority of our lumber from Canada.

Those prices are going to go up. And that's certainly not going to help the housing supply, appliances, drywall, cement, all with the steel tariff. Yeah. These are all going to raise, and this is going to negatively affect landlords. And they're probably going to pass that cost to the renter. So this could essentially be raising rent for a lot of tenants in the country. Not only for the cost of maintaining those units, but because there will be fewer units.

Because builders will have their profit per unit when they build a new thing is going to be smaller. So the incentive is going to shrink. Those two forces are going to act negatively on housing prices and rent prices. Do these tariffs benefit anybody? We've gone over Trump's reasoning for implementing them and leveraging them. But is there anyone who actually benefit from the tariffs? Anyone that can wait it out. So, you know, if you're sitting on a rental with a good tenant and you're cash flowing decently

and you've got a fund that you've saved for maintenance costs or renovation costs, you're probably fine. And this benefits you because it might give you opportunities to buy. Because there are going to be a lot of landlords that came online in the last five years for the first time because they were watching, you know, some YouTuber talk about how great it is to get into rentals right now. And, you know, they're going to be, their cash flows just start disappearing in such a way that is $50 a month really worth the headache of managing my own rental. I can't get a property manager because I'm losing money. So I'm going to sell this thing.

and if you're selling a working rental and you put that in the listing, the people that can wait it out are going to snatch it. And I reference that fictional landlord, the paid off rental and everything, the people who are really going to be most interested in snatching up the rental you put on the market down the street from you that you've been managing for three years. It's going to be the gray stars. It's going to be the Black Rock. It's going to be the private equity guys who are in their skyscrapers in Los Angeles and New York who can wait. it out. They have the ability to like leverage the crap out of all their assets. Yeah. To jump on the opportunity. Those people are going to make out pretty well. I think there's also going to be a clear winner and loser setup with suppliers. So,

you know, if somebody starts thinking, oh, okay, I can raise prices now because I'm going to, you know, I can point to the tariffs and blame that. And it's going to make the, the homeowner more likely to jump on it. You know, P.P. HVax, right? This kind of thing where we've already seen huge price increases. They might end up better off once the dust is settled. But also, you know, I think one question I'd be having if I'm watching this at home is like, when does the dust settle? And we don't know. Yeah. We have no idea. Well, that's unsettling to say the least. Yeah. What can we do to prepare? What can landlords do to prepare? Yeah. So fire your property manager if you have one, do not hire a property manager if you're considering it.

That's a little self-serving considering what we work. But, you know, if you're paying a 12% of your rent, your total rent, not just what you're cash flowing, to a property manager, that's going to rob you of the flexibility you're going to need to respond to the rising prices, especially when you're surprised by it. So pocket that extra $100, $200, $300 every month and manage your property yourself. That's the first thing. The second thing, also kind of batten down your hatch's kind of message is try to make big moves you anticipate making this year now because prices will likely move up.

If you have a vacancy coming up and you're thinking about a renovation you've got to do, I would recommend doing that sooner rather than later. Because as prices start to rise, what we're going to experience probably is price. probably is prices rising, just like how inflation felt. Remember, we have no idea when it's going to stop, right? And that's how it's going to feel because the market's going to be trying to respond in such a way that stabilizes, because that's what markets do. But that, you know, we're talking, what, 25% universal on steel and aluminum, the two major inputs to every appliance in your house. Like, that could take a long time to stabilize.

And so you're going to want to buy those items if you need them. early in that upswing. So those are kind of the two batten down your hatches things. I'd also point to consistently reassessing the rental trends near your rentals. You might see rental demand increase as, you know, these zoomers and stuff are graduating college. They're much less likely to buy a house because we've just talked about how the housing market will be affected.

So a larger share of those people are going to enter in the tenant pool. So you might be able to raise rents. And I recommend you look for opportunities to do. that, especially if you have a narrow cash flow property. So minimizing costs, you know, do renovations now before prices skyrocket. You know, to wrap this up, these tariffs are not looking good for smaller DIY landlords. Big corporations might not be hit as hard and might be able to weather the storm. But, you know, for any of our smaller landlords with two to three properties who are struggling,

this could be pretty devastating. 100%. Yeah. Please like and subscribe. sign up at turbotenant.com. It's free for landlords. Thanks for giving us your insight, John. Yeah, dude, no problem. Happy to help. TurboTenant is the all-in-one platform for landlords to manage their rental properties. From vacancy to tenancy, we have you covered with industry-leading tools and expert advice.

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