We're all struggling right now: as millions of renters across the country have seen their income eliminated or drastically reduced, landlords are right there with them, wondering how to move forward and stay afloat.
- How do you continue being a good landlord during the pandemic?
- Equally as important, how do you continue being a successful landlord?
These are important questions—and that's exactly why we decided as Hampton property management experts to provide the best answers we can to property owners stuck between a rock and a hard place during this time. If your tenants have lost their ability to pay rent, there are a few important things to consider.
Foreword: If you've found this blog, it may be because you're facing a serious financial crisis. While we are experts in Hampton property management, this blog is not intended as a replacement for legal counsel. If you need live support, get in touch with us!
Assess Your Situation
As the New York Times recently reported, the novel Coronavirus pandemic and the nationwide shutdown in its wake have affected landlords and renters alike. If you have tenants who are unable to pay rent, we recommend as a Hampton property management provider that you first assess how that will impact you as a landlord and property owner.
If you're an established property investor with a diverse portfolio of properties, you may be better able to absorb the blow. However, if you own just one or two properties, and one or more of your tenants suddenly can't pay the rent, that's a big hit—especially if you rely directly on the income.
It's also important to factor in your savings—and how much you owe. Are you still paying off the mortgage on your rental property? If so, you're in a more challenging position than someone who, for example, inherited their parents' house and decided to turn it into an income property.
Know the Law
The novel Coronavirus pandemic has put landlords and tenants on ever-shifting legal ground—and it can be hard to keep up with what the new rules are. At present, rent has not been canceled—at least not in our part of the country. However, as a Hampton property management provider, we are keeping a close eye on the situation and how it might affect our renters and property owners.
Keep in mind that; even though it's still legal to collect rent, now is not the time to pursue an eviction. Eviction proceedings across the country have been put on hold, and at the time of publication, we're waiting to find out if that hold will be extended across the Coastal Virginia area. That said, if an eviction becomes necessary in the future, now is the time to be gathering the materials you would need to enforce it.
As an expert in Hampton property management, we think that compromise is the better path right now to realize both the needs of your renter and you as a property owner. We've found that, when given the option, the majority of renters prefer this route to a harrowing future eviction. This is where your payment plan comes in to save the day!
Balancing Compassion With Your Needs
It can be hard to balance your own needs with those of your tenants—but in difficult times, it's important to do so. You don't want to lose your residents, which makes compassion something that benefits everyone. Rather than demanding rent or bullying your renters—something you shouldn't do even under normal circumstances—it's better to try a little understanding.
- Make it clear to your renters that the times we're living through are strange, challenging, and anxiety-inducing.
- Let them know you're in the same boat, and that you understand what they're going through.
- Encourage your renters to approach you if they've lost access to income so that you can develop a solution together.
Chances are, your renters are honest people who would prefer to pay their rent in full and on time—but are simply not able to due to financial hardship. If that's the case, you definitely want to work with them to come up with some kind of deal. Losing a resident means you'll need to find a new one, which can be challenging and costly even in the best of times. Plus, it's worth remembering that getting part of the income you need is better than getting none at all in the short term.
- Start by asking your tenant what they can afford.
- Make it clear that rent in full will be expected, but that solutions can be found.
- Indicate that you're prepared to come up with a mutually beneficial payment plan until their work resumes.
This could mean:
- That they pay only part of their rent now and make up the deficit later
- That you put a hold on rent completely until they are able to pay
- Offering an installment plan that will distribute payment over time.
Your final choice will primarily depend on what you can afford. However, make sure to put it all in writing.
We're Here to Help!
Collecting rent is never the most enjoyable part of being a property owner, and challenging times like these make it all the more difficult. That's just one of the reasons why working with a professional Hampton property management company is so beneficial! We take the stress and headaches out of being a landlord, from collecting rent and handling tenant relations to taking care of repairs and overseeing maintenance tasks.
That said, we're also here to help DIY property owners tackle this current crisis head-on. For more information on how to build a tenant payment plan and keep your rental business afloat, we're offering you our Collecting Rent in a Crisis Handbook for free! Download your copy today to get started.