It’s no secret that the coronavirus has changed life as we know it. Schools are closed, nursing homes have banned visitors, millions of employees are working from home, and restaurants have shuttered their dining rooms. With a health and economic crisis looming, landlords are feeling the need to brace for impact, but what exactly can be done? Here are some strategies for navigating the coronavirus with your tenants.
The most important thing you as a landlord can right now is work to stop the spread of the virus in your communities. Education plays a big role in the containment of the virus. Help your tenants understand best practices like frequent hand washing and limiting interaction with others. Encourage them to only leave their house for essential items and services. People who are sick should call their doctor and wear a face mask. Click here to read the full recommendations from the CDC.
Take extra precautions in common areas. Consider closing onsite gyms and pools. If you decide to keep shared areas open, disinfect surfaces frequently and provide hand sanitizer and cleansing wipes to your tenants. Limit the risk to both you and your renters by implementing a contactless rent payment option.
Communication is Key
Be proactive and talk with your tenants one-on-one to better understand their current financial situation and make plans for moving forward. Utilize online programs like Skype, FaceTime, and Zoom to limit contact. If those are not an option, a phone call will also suffice. The sooner you are aware of the situation the longer you have to find a solution. Encourage your tenants to reach out to their renter’s or business insurance providers to see if they have coverage for this interruption.
If you are able to, consider giving your tenants a break on their rent like this landlord in Milwaukee, MN who reduced April’s rent to $100 or this landlord in South Portland, ME who won’t be collecting rent at all.
Know the Local Laws
President Trump recently announced that the Department of Housing and Urban Development will suspend “all foreclosures and evictions” through the end of April. This doesn’t mean that your renters no longer have to pay. For example, the Los Angeles eviction moratorium allows tenants up to six months to repay any unpaid rent. Similar programs have been established in other cities including San Francisco, Seattle, Miami, and Boston.
Research Rent Assistance Programs
Because the coronavirus is a global pandemic, many financial and government agencies are working on plans to assist those who are affected. Do some research to see what programs are being offered in your area and pass the information along to your tenants. A simple way to find local relief is to call the United Way at 211.
Offer Credit Card Payments
Credit card payments offer income flexibility to your tenants while still allowing you to meet your financial needs. Your renters may not have the funds necessary to pay their whole rent payment on-hand but might be expecting some in the near future. Allowing them to pay their rent with a card will help them to manage the ebb and flow of income between payments. While nearly all rent payments will be assessed a fee (PayRent charges a 3.5% fee plus .30), it is typically less than the cost of a late fee or a bounced check and overdraft charges from their bank. Many online rent payment platforms offer this payment method. You can read about other benefits of accepting credit card rent payments here.
Work out a Payment Plan
Your willingness to work with your tenant will likely benefit you financially in the long run as well as create goodwill between you and your tenant. Partial rent payment is better than no rent payment at all. As appropriate, work to find a rate that will give some relief to your tenant while still allowing you to meet your financial obligations. Decide what portion of the rent payment can be deferred. Spread the unpaid amount throughout the remainder of the lease. Get the full agreement in writing.
Talk with your Lender
Lenders are obligated under the law to work with the borrower in times of hardship. Make your lender aware of your current situation and work with them to find a solution. For instance, many lenders have implemented special waivers because of the coronavirus. You may be able to get a short-term loan modification to help you weather the storm. Here are the coronavirus response pages from the major banks in the country:
Knowledge is Power
Information is the most powerful weapon you have to fight this current challenge. It all comes down to knowing what you’re up against, and working with others to create an action plan. You aren’t alone in this and as time goes on we will all work together to find solutions.