As we continue to work toward resuming normal life—or something close to it—a lot is still up in the air. If you're a landlord with questions, then you're certainly not alone: our team at Renters Warehouse Hampton Roads is here to help you navigate the uncertain waters that lie ahead.
One of the questions we've always heard as Chesapeake property management is, "What should I do if my tenants don't pay rent?" However, recently that question has become a lot more complicated thanks to the novel Coronavirus pandemic. As much as we might like to get back to a business-as-usual mentality, the reality is that we're not quite there yet—and it's still important to approach topics related to rental payments and evictions with caution.
Foreword: If you've found this blog, it may be because you're facing a serious financial crisis. While we provide exceptional Chesapeake property management, this blog is not intended to replace legal counsel. If you need live support, get in touch with the team of Professional Landlords at Renters Warehouse Hampton Roads!
Finding Balance in a Time Without
It can be tough to balance your needs as a landlord with your tenants' needs, even under the best of circumstances. Right now, a bit of genuine empathy and compassion goes a long way. Even now, as we approach June 10th and the lifting of Governor Northam's Executive Order 53, many renters are wondering how they'll make their rent for June when they already made payments in April and May on dwindling financial reserves.
Even as many businesses are re-opening, and some people can return to work, many aren't yet able to do so. There are many more for whom the financial hardship of the last few months will continue throughout the months ahead. Additionally, many members of our community face the terrifying reality that they may not have a job to return to.
Maintain open communication with tenants, and if some of them are not able to pay rent, let them know that you understand what they're going through. At the same time, it's important that you make it clear that you're facing your own challenges. Your rental property is, after all, a business, and you need to eventually collect the rent you are owed.
Work With Tenants as Much as Possible
It's generally best to assume that your tenants are honest folks who would prefer to pay rent if they were able to. With that in mind, it's in your best interest to work with them as much as possible. Try to develop a payment plan that allows your tenants to pay what they can, when they can.
How exactly you approach this is up to you:
- Some landlords are offering temporarily reduced rental rates to tenants in need until the crisis lifts
- Others have developed rent deferment plans that will allow their tenants to pay in full over time
- There are even some cases where, when property owners can afford it, they waive rent completely.
Unfortunately, we know the latter is not a position most landlords can afford to be in: the vast majority of us were unprepared for the financial impact of a global pandemic—and it's being reflected in our bank accounts. When you have overhead that you can't afford to ignore to keep your properties operating and your tenants housed, it's worth gently reminding them that whatever they can pay helps cover mortgage payments.
While some property owners received protections under the CARES Act, not every landlord was sheltered by it—and those who didn't receive such coverage found their banks much less forgiving.
- Keeping thorough and accurate records is more important now than ever.
- If you're offering payment plans and rent deferment options to your tenants, make sure you're keeping precise track of what each tenant owes, how much they've paid, and the dates of all payments.
- Bookkeeping may not be the foremost thing on your mind right now—but this is not the time to let your documentation slip!
Evict Only as a Last Resort
Our property management team at Renters Warehouse Hampton Roads understands that eviction is never the most desirable outcome. In fact, as Chesapeake property management providers, we consider it a worst-case scenario for tenants and landlords alike. During a time when moratoriums have been placed on evictions across much of the country (they've been lifted in some areas, but not in others), it's important to tread lightly. There is a fair argument to be made that evicting people from their homes during a public health crisis will only exacerbate the number of cases, and hit our community even harder while it's trying to recover.
Even if you are legally able to evict a tenant, it's best to think of eviction only as a last resort. When you consider all the expenses associated with finding a new tenant (inspections, advertising, and tenant screening), it's almost always preferable to keep the tenants you have.
You Need an Expert in Chesapeake Property Management
As a landlord, collecting rent is part of your job—but it's probably not your favorite part. When your tenants have a hard time paying, many landlords often feel like the villain when they try to collect—even if they have expenses of their own. Whether you own one rental property or dozens of them, working with professional property managers is one way to ease this burden.
The right property managers can make all the difference:
- Great managers will treat your tenants with respect and compassion
- Skilled professionals keep up excellent communication efforts with your renters
- Your property partner will go the extra mile to make sure rent is paid, and your business thrives.
This is just one of the many jobs a property manager does, and it frees you up to focus on other things (like growing your business and building wealth).
A great way to learn more about how the right property manager can help your rental property stay profitable during challenging times is by downloading your free copy of our Collecting Rent in a Crisis Handbook. It gives DIY property owners an up close and personal look at the kind of mentality they need to have when pursuing rent collection in a time like this—and what we take on for you as your property manager!