let’s talk: HOW THIS PANDEMIC IS AFFECTING RENTERS & LANDLORDS
A couple of weeks ago we talked about how the coronavirus might affect the real estate market. But this week I want to talk about how it is affecting renters and landlords specifically.
So, as we do, let’s talk Real Estate, let’s talk THE CORONAVIRUS IMPACT ON RENTERS & LANDLORDS…
There is much debate as to how rent should be handled during these unprecedented times. I have seen the #cancelrent hashtag trending many places. And to some extent, I can understand that, especially when people are losing jobs and all over the news you see that banks are allowing for the deferral of mortgage payments. But it’s not that simple.
Here is the reality we are facing as of April 1, 2020.
As of now, we still owe mortgage payments for all of our properties. We still have to pay taxes. We still have to pay water bills and insurance premiums. As of now, as a landlord, myself and my business partners are still liable for all of our expenses. And this is why we can’t just #cancelrent. Both tenants and landlords have a big responsibility here – they both have to pay their bills in order to keep a roof over everyone’s head. I think the problem is that, landlords have this reputation of being super rich. More often than not, that is not the case. If the rent isn’t paid, the landlord may not be able to cover the mortgage, and thats when the property is at risk, and everyone loses.
So here is how we are handling the situation with our tenants.
Under normal circumstances, our tenants have until the 5th every month to pay their rent in full, without incurring any late fees.
For the next three months, we have waived any late fees, as long as they pay 50% of the monthly rent on time. We are essentially giving them the full month to make their full payment, as long as they pay 50% by the 5th of the month. The hope is that this gives them extra time to collect the rest of their rent, whether it be via unemployment or stimulus checks, etc, in the event they face any financial distress during this time.
Now, the new stimulus package says that “Landlords with federally backed mortgage loans on their rental properties are not permitted to carry out an eviction due to failure to pay rent for 120 days. They are also not to collect late fees or penalties in the same time period”. The thought is that landlords are supposed to be able to defer their payments if they are federally backed, and therefore do not need to collect rent from their tenants during this time. But we do not have federally backed mortgages, and as of now, we still owe our regular mortgage payments. This is where the problem lies.
This is a tough situation for everyone. And I do not know if there is one specific right or wrong way to handle this. So I am curious, if you are a landlord, how are you handling rent collection right now? If you are a renter, is your landlord providing any rent forgiveness? Let us know!
Interested in giving back?! Please check out the below list of organizations working to provide food and medical help during this pandemic.
“This organization helps feed communities and individuals facing hunger across the United States through a nationwide network of food banks.”
No Kid Hungry
“With coronavirus forcing mass school closures across the country, millions of children are losing the daily meals they depend on. No Kid Hungry uses donations to send emergency grants to food banks and local community groups. It diverts resources to feed kids in the hardest-hit communities. The organization also has plans in place to ensure families know how to find food while schools are closed and making sure kids get three meals a day.”
Meals on Wheels
“This organization delivers meals to the country’s elderly population. Many of its local programs are struggling with the additional costs of delivering meals during the outbreak.”
The CDC Foundation
“This nonprofit organization for the CDC is raising funds to help respond to the public health threat when federal and state funding is not available. The foundation said it will use the funds to support state and local health departments in the US as well as support the global response including logistics, personal protective equipment, and critical response supplies.”
The American Red Cross
“As the number of coronavirus cases increases in the US, the number of people eligible to give blood and platelets for patients in need could decrease further, the Red Cross said. The organization is urging all eligible, healthy donors to donate blood and platelets to help maintain a sufficient blood supply flow and avoid potential shortages.”
Happy Wednesday! & Stay Healthy!
p.s. LET’S CONNECT ON SOCIAL MEDIA
p.p.s. if you are looking for an online class to help boost your social media presence – check out http://www.gogosbootcamp.com I have personally done this class and found it super helpful!
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OpinIons stated here are my own and not the views of eXp Realty.
Data Sources for Today’s Content:
Me – this is based on my own personal experience!
My Business Partners