Property Management Reality During COVID-19 (helpful links included)March 26, 2020
Nobody could have predicted the impact of the Coronavirus outbreak on the global economy. Because it wasn’t taken seriously at first, now the world is struggling to fight the pandemic, save people’s lives, and maintain economic stability.
COVID-19 is not just a regular flu. As cases grow across the globe, it has officially been proclaimed a pandemic by the World Health Organization- 198 countries have confirmed cases of the disease with thousands of new cases registered every day. These statistics are staggering, but we all need to be aware of the real numbers in order to stop the spread and fight the consequences it might possibly bring.
Today, most non-essential businesses are shut down and every state has established its own lockdown procedures. Moreover, each state has taken measures to keep everyone inside, with some exceptions. (You can check out state-specific orders here.)
What happens with property management
The property management industry is affected by the current situation as much as any other business. Amid the COVID-19 pandemic, tenants are losing jobs which can lead to the inability to pay rent. Meanwhile, landlords are worried about how they are going to make mortgage payments if they waive next months’ rent. The overall picture looks quite bleak at first glance.
But state and federal programs are available to help homeowners and tenants to get through the tough times:
- The IRS has already postponed the Tax Deadline to 7/15/2020.
- Cities have put forward measures to prevent landlords and courts from evicting tenants.
- The government announced a pause on rent increases.
- Some mortgage lenders may defer payments for a certain period of time.
Numerous landlords are choosing to help their renters by decreasing rent prices, waiving one month’s rent, or offering to cover utilities because it’s often better to receive no rent payments for a month or two than have multiple vacancies during this crisis.
A landlord from California shares her thoughts on the possibility that her tenants won’t be able to pay on time due to the Coronavirus outbreak.
“It varies by city but there’s an eviction moratorium. That means rent is still due and accrued but no evictions. Personally I wouldn’t charge late fees either. I sent letters saying this and giving online ways to pay, told tenants to call me if they needed to talk it out. In theory, you also could probably ask for proof of hardship but that could be hard- how do you prove a lay-off or shorter hours? I’ve talked to a few and they are SCARED. It’s nice to be able to reassure them they won’t be out of a home on top of this right now. We have a cushion to pay mortgages for a month or two but if it goes beyond that we will call our loan companies and have payments put on the back end of the loan which is what most are doing. I also let all my owners know all this so they were aware we might not be getting full rents.”
- Take a look at the list of what some states are doing to help homeowners: Mortgage relief guide (the information is constantly updated).
- If you feel like creating a rent deferral plan for your tenants, this article might be helpful.
We want to know your attitude towards the new policies during the coronavirus crisis. How do you manage your rental business during this difficult time?
Share your thoughts in the comments section below.
And don’t forget to stay inside!