Coronavirus has hit us pretty hard. And you may be a landlord, just like me. As a landlord, what’s your number one concern? It’s probably collecting rent, right?
From the landlord side the moratoriums on evicting people who chose to not pay can be frustrating.
From the tenant side of things, the idea of not paying rent may sound appealing. I’m in a unique situation because I chose to rent my home. This allows me flexibility and, in this case, it also helps me see this situation from both sides.
From a renter standpoint, I felt exactly what everybody felt whenever the first opportunity to not pay your rent came about. I decided to pay my rent each month, even though I knew my landlord could not currently evict me, because I wanted to treat other people the way I’d like to be treated.
Some renters may feel like this is an opportunity to “screw the man.” But most landlords are individuals. We (the landlords) are regular people just like you.
To keep the property from foreclosing, we have to pay the mortgage, taxes, and insurance every single month. On our large multifamily properties, we also have to pay maintenance staff and front office staff. We have to keep the grounds safe, and also clean and sanitize the property. If something breaks we still need to pay people to fix it.
I think a lot of people think landlords or investors are greedy. They’re wealthy billionaires who have tons of money and can afford to take a hit. So a rent strike or “screwing the man” may sound appealing.
But you’re not fighting the man, you’re fighting your fellow entrepreneur.
Owning apartments is a business. So, if we can’t get the rents that we need, we can’t pay the mortgage. We can’t pay the insurance, the taxes, etc. We also can’t keep the grounds clean and safe and keep people employed, which is one of our biggest concerns right now.
We rely on your rent to ensure we don’t have to let anyone go. So, before you decide to skip out on your rent just because you can get away with it for now, think about all the other families and lives that are affected. If we have to get rid of some of our staff on property, they have families that they have to feed that they no longer can. So, you doing the right thing to pay for the roof over your head is also something that needs to be prioritized just like buying food is right now.
For the Landlords
You might be freaking out a little bit about people either threatening striking or people paying late because it’s just not the norm. Here are some solutions.
If your tenant already contacted you and shared that they cannot pay due to COVID, it’s important to work with them. It’s always better to keep good tenants in your building. This situation is just as new to them as it is to you. Our policy is to always work with our tenants.
If they are a good tenant, create a plan to work with them. We want people in our apartments who truly want to live there.
Step 1: Increase communication with all of your residents.
Be proactive and reach out to all of your residents. Let them know that you can work with them if they have a job loss due to COVID.
For tenants in this situation we provided resources. Some of the things we provided in our apartments included:
- Information on how to apply for unemployment
- Information on SNAP in Texas, Supplemental Nutrition Assistance Program to help with buying food
- Community resources like St. Vincent DePaul, places doing food pantries, and places helping with utility bills
- Information on paycheck protection program and SBA loans for people who are self-employed, like contractors
Communicate to your tenants “if you have been affected, please come talk to us, we want to work with you.” Be clear that “we know you are good tenants.”
Step 2: Contact your providers
Contact your utility companies, phone carrier, etc. Ask if they are doing any credits. Most are also not charging late fees.
Step 3: When they come to you it’s essential that you empathize with them.
There are lots of solutions, but the first step is to put yourself in their shoes. Let them know you get it you understand, that you’ve lost a job before and understand the hardship. We get what they’re going through because all of us usually go through hardships when things change in the economy. It doesn’t affect just a small group of people, it affects everybody.
It may be a scary time for them, they may be afraid of losing their home or losing the ability to pay for their children’s education, or pay for their vehicle. There’s a lot going through their mind. So, let them know that you understand and that you want to work with them.
Step 4: Figure out what you can give for either rent concessions or ways of being creative.
Some ideas are:
- Give a rent concession
- Be creative with pulling monies out of their deposit account to be able to help pay for rent
- Split up when rent is due so that it’s not all due at once
- Waive fees related to credit card payments
- Accept late rent all month, with no late fees
- Offer a deferral plan. In the most extreme scenarios, you may want to offer a deferral plan. You could defer rents and charge them a very small amount to stay in the unit. Then after a certain amount of days (90, 180, etc.), the entire amount of what was owed is due. You may charge them a fee, in the meantime, because we are financing a portion of our property to this person to use it. When that period is over, the amount is due in full or you can agree to spread those payments out say a 4-month or 6-month period.
Because we signed a lease, rent is still due. Now again, there can be workout plans, we can accept funds late, we can do a discount, we can do all kinds of different things, but the point is rent is not going away.
It’s your job to remind them of your business agreement together. If you feel like you need to explain it to somebody who wants to argue with you, share that you still have obligations on your end that you have to pay. Once you’ve empathized with your tenants, it’s important to then go back to “rent is still due.” Don’t allow them to roll over you.
I hope that some of these ideas help you if you are a landlord.
I hope if you’re a tenant you’re able to see that landlords are regular people who are not out to steal or screw you. But that they do have bills to pay to keep the property working and not repossessed by the bank. So, if you want to enjoy where you live, it’s important for everybody to work together and to try to see through each other’s eyes.
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