5 tips for landlords during the Corona epidemic
According to National Public Radio, a record more than 30 million Americans have filed for unemployment due to the continued rise in new cases of COVID-19. Due to mass layoffs, many are struggling financially, struggling to pay for necessities and falling behind on rent.
This huge loss of income has affected not only tenants, but also landlords who can only rely on rent checks. If tenants continue to not pay their rent, landlords will struggle to cover the expenses of their own needs, maintain building utilities, and worse, default on the rental property’s mortgage. .
If you’re one of those homeowners struggling to make ends meet, below are the steps you can take to alleviate the situation you’re in right now.
Follow instructions from trusted sources
There is so much news going around 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 reputable outlets.
The World Health Organization has consistently provided reliable information about the outbreak. They are the most reliable source of information, even media around the world got their information from this agency. You can give your tenants information about local COVID transmissions to remind them to be careful at all times.
You can also check the local government website or social media pages for public announcements regarding government regulations and protocols. If you have concerns, it is best to contact the relevant authorities to answer questions and clear up confusion rather than relying on unverified information.
As the government’s response to the coronavirus pandemic, President Donald Trump signed the Coronavirus Aid, Relief, and Economic Security or CARES Act on March 27, 2020. This act will help provide economic relief to families, workers and to American companies. affected by the COVID-19 pandemicand that includes you and your tenants.
Before informing your tenants or creating new regulations based on the updates and information you see, first confirm its legitimacy.
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 to your tenants’ concerns and entertaining them personally. Additionally, you can send memos regarding any additional or updated rules to each of your tenants. Showing them your concerns during the outbreak will help them feel more comfortable with you as the owner.
Also, having established a relationship with your tenants will make it easier to implement new policies during the outbreak. Consider creating new policies that will help stop the spread of COVID and keep your tenants safe.
Evaluate your rental contracts
Now would be the best time to evaluate your lease agreements with your tenants. Whether your tenants are individuals or corporate tenants, it’s always good to differentiate between them. Give preference to the company’s tenants, because they are the ones who risk insolvency. Collect their payments for rent as soon as possible.
Also, check leases with guarantor clauses. You can call on their guarantors if they cannot pay their rent. Another thing to look for in rental agreements is rent deposits. You can use the deposit to make up for the months your tenants struggled to pay.
Be flexible in payment terms
You can put an arrangement in place to help them with their rent and, at the same time, keep tenants who were paying their rent religiously before the outbreak even started. You can talk to them about paying 50% of their rent. This will ensure that your rental properties are not emptied during and after the outbreak.
You can’t afford to lose your tenants right now. Finding a new tenant during this confinement would be impossible. Also, potential tenants might avoid renting your apartment if it is viewed negatively by previous tenants. Therefore, keeping your good paying tenants under a customizable arrangement will benefit you in the long run.
Also, eviction of tenants is not an option for landlords as tenants are protected by the eviction moratorium issued by the government. Units leased as part of federally funded properties are also covered by the CARES Actwhich provides assistance to tenants strongly affected by the pandemic.
Create an emergency plan
Having a contingency plan would be very helpful for your rental business, especially in these difficult times when income is scarce due to unemployment and tenant furloughs.
Consider the type of business you run as you plan. Since landlords can’t force an eviction, having some cash on hand would help you with your finances when tenants can’t pay their rent.
Having an emergency fund for your business will help you a lot in times like this. Prioritize a separate account for emergency purposes only. Also, always establish special regulations that you and your tenants can follow in the event of a crisis.
In addition to having an emergency fund and special regulations, it is also important that you have control over your personal finances. Contact your bank or private lenders if you have outstanding debt and discuss repayment alternatives, such as debt consolidation loans, to reduce your financial costs. It will help you stay afloat in terms of personal finance during the pandemic.
Find out about any available support you can get for your business to maintain your income during the pandemic and plan accordingly. You can also try to consider negotiating costs with your tenants, such as temporarily suspending rents and adjusting rental rates until everything is back to normal.
This pandemic will end, and when it does, that’s when your business should come back. Until then, relax your spending habits in these difficult times. Try cutting back on some non-essential purchases and you’ll find you can save a lot.
Running a business alone is difficult, and with today’s events, it will only get worse. When creating a contingency plan, think about the worst case scenarios that can happen to you and your tenants. Make sure you take the necessary measures and preparations so that you do not encounter any problems.
Due to the pandemic, the world is at a standstill. Around the world, business owners are struggling to cope with losses. For landlords and landlords, balancing 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 focusing on business, finance, and real estate. In her spare time, Tiffany likes to relax and watch her favorite TV series or read her favorite novels.