COVID-19: What it Means for Rent Payments
Just like many other individuals and industries around the world, landlords are also impacted by the current COVID-19 pandemic that we are facing. Things like showing properties, handling maintenance issues, and performing walk-throughs have all had to be adjusted to meet the social distancing requirements brought on by the pandemic. Sure, this is all an inconvenience that will likely pass with time, but there is one crucially important – potentially detrimental - aspect of being a landlord that has been affected by this new way of life. Can you guess what it is?
That’s right - collecting rent payments.
Landlords need their rent payments. Just because a property is being rented out does not mean there is no active mortgage on the property. It is quite common for the landlord to rely on monthly rent payments to pay the mortgage, taxes, property maintenance, and so forth. Without this income, landlords may struggle to make these payments, leaving their properties in jeopardy.
According to a report recently filed by Rentec Direct, there was a decrease in the number of rent payments that were received by property managers and landlords in May 2020. However, there was also an increase in the number of individuals who chose to pay their rent online. A true sign of the times.
So, what happens now? How do we move forward in the way of this pandemic and still collect rent as stated in the lease?
Let’s be honest for a moment. With the moratorium on evictions that was/is in place and the increased rate of unemployment, there may be a lag in rent payments until everything gets situated and things begin to show signs of life. In the meantime, the best thing that you can do, as a landlord, is to offer your tenants solutions.
You want your rent payments, right? Make it easy and safe for your tenants to pay their rent without having to come in contact with anyone by any means. Create an online portal to collect payments, or offer options such as PayPal, Zelle, Venmo, etc.
Keep the lines of communication open with your tenants. Maybe they can’t pay the entire amount, but they can pay something toward their rent. Maybe they can pay their rent but it will be late. Or, maybe they just got back to work and want to make up for lost rent. Being approachable will allow your tenants to come to you and explain their situation. Review the facts and move forward as you see fit. Offer a payment plan, waive a late fee, etc.
And, finally, if you find yourself in hot water with your own payments on the rental property, reach out to your lender.
Everyone is going through some sort of difficulty at this time. Do your part to keep what you can together and let the rest go for now. Things will all work out as our country begins to re-open and things slowly return to our new normal.
