According to National Public Radio, a record of more than 30 million Americans filed for unemployment due to the continuous surge of new COVID-19 cases. Due to massive layoffs, many are struggling financially, finding it difficult to pay for their necessities and falling behind on their rent.
This huge income loss affected not only renters but also landlords who only have rent checks to rely on. If tenants continue to fail in paying rent, landlords will find it difficult to cover the expenses of their own needs, keep building utilities running, and, worse, fail to pay the rental building’s mortgage.
If you’re one of these landlords struggling to make ends meet, listed below are the things you can do to alleviate the situation you’re in right now.
Follow Instructions from Reliable Sources
There is so much news circulating regarding updates and information about the coronavirus outbreak. From developing a cure to alternative medicine, you name it. Check your sources and only believe information from reliable outlets.
The World Health Organization has been consistent in providing reliable information regarding the outbreak. They are the most reliable source of information, even media around the globe have obtained their information from this agency. You can give your tenants information about local COVID transmissions to remind them to be cautious at all times.
You can also check the local government’s website or social media pages for public announcements regarding regulations and government protocols. If you have concerns, it is better to contact the proper authorities to answer questions and clear up the confusion than rely on unverified information.
As the government’s response to the coronavirus pandemic, President Donald Trump has signed the Coronavirus Aid, Relief, and Economic Security or the CARES Act last March 27th, 2020. This act will help provide economic assistance to American families, workers, and businesses affected by COVID-19 pandemic, and that includes you and your tenants.
Before you inform your tenants or create new regulations based on the updates and information you see, confirm its legitimacy first.
Establish Good Communication with Your Tenants
Establish good communication between you and your tenants to help each other during the crisis.
Show sympathy by opening your doors for any concerns of your tenants and entertaining them personally. Additionally, you can send out memos regarding any additional or updated rules to each of your tenants. Showing your concerns towards them during the outbreak will help them feel more at ease with you as their landlord.
Moreover, after establishing a relationship with your tenants, implementing new policies during the outbreak will be easier. Consider creating new policies that will help stop the spread of COVID and keep your tenants safer.
Evaluate Your Lease Agreements
Now would be the best time to evaluate your lease agreements with your tenants. Whether your tenants are individuals or company tenants, it’s always good to differentiate both of them. Prioritize company tenants, as they are the ones at risk of insolvency. Collect their payments for rent as soon as possible.
Moreover, check for leases with guarantor provisions. You can call their guarantors if they cannot pay their rent. Another thing to look into lease agreements is the rent deposits. You can use the deposit to compensate for the months your tenants struggled to pay.
Be Flexible in Terms of Payment
You can set up an arrangement to help them with their rent and, at the same time, keep the tenants who paid their rent religiously even before the outbreak began. You can talk to them about paying 50% of their rent. Doing so will assure your rental properties will not be emptied during and after the outbreak.
You can’t afford to lose your tenants right now. Finding a new tenant during this lockdown would be impossible. Additionally, potential tenants might avoid renting your apartment if it gets a bad rap from former renters. Hence, keeping your good paying tenants under a customizable arrangement will benefit you in the long run.
Moreover, evicting tenants is not an option for landlords as tenants are protected by the moratorium of eviction released by the government. Units being rented under federally-financed properties are also covered by the CARES Act, which gives aid to tenants heavily affected by the pandemic.
Create a Contingency Plan
Having a contingency plan would be very helpful for your rental business, especially in these trying times when income is scarce due to tenants being unemployed and furloughed.
Consider the type of business you are running as you plan. Since landlords cannot impose eviction, having spare cash would help you with your finances when tenants can not pay their rent.
Having an emergency fund for your business will help you a lot during times like this. Prioritize having a separate account for emergency purposes only. Additionally, always make special regulations that you and your tenants can follow whenever a crisis strikes.
Aside from having an emergency fund and special regulations, it is also important that you keep your personal finances in check. Contact your bank or private lenders if you have pending debts and discuss repayment alternatives, such as debt consolidation loans, to reduce your financial burdens. It will help you stay afloat in terms of personal finances during the pandemic.
Find out any available support you can get for your business to retain your income during the pandemic and plan accordingly. You can also try to consider negotiating costs with your tenants, like temporarily pausing rents and adjusting rental rates until everything goes back to normal.
This pandemic will end, and when it does, that’ll be the moment your business should make a comeback. Until then, ease your spending habits during these trying times. Try to lessen some nonessential purchases, and you’ll find that you can save a lot.
Managing a business alone is tough, and with today’s events, it’ll only get tougher. When creating a contingency plan, think of the worst-case scenarios that can happen to you and your tenants. Make sure to take the necessary steps and preparations so you won’t run into any trouble.
Takeaway
Due to the pandemic, the world is at a standstill. Business owners everywhere are having a hard time coping with losses. For landlords and property owners, the balancing act of taking care of tenants and their means of income can be extremely difficult. Hopefully, the tips mentioned above can help them weather this storm.
Tiffany Wagner is a content writer and blogger who focuses on business, finance, and real estate. During her free time, Tiffany loves to chill and watch her favorite TV series or read her favorite novels.
