Since so many people lost their jobs during the pandemic, landlords were asked to understand and be considerate to their affected tenants. Indeed, many renters made significant changes to their spending and lifestyle as the pandemic carried on. If they used to dine out frequently in the past, that was no longer possible with the business closures and all. Traveling was also restricted, so no renter left their homes for a leisure trip.
But one of the most common adjustments they made was postponing their rental payments. According to a survey, 22% of renters requested a postponement or cancellation on their rental dues, while 17% couldn’t pay full rent.
As much as payment delays and cancellations put landlords at a disadvantage, this situation was expected anyway. Of course, renters couldn’t budget for rent if they lost their jobs. If you’re a landlord who had been thriving before the pandemic hit, chances are you’re facing a setback today and now doubting if rental income is still sufficient for you.
Adjustments by Landlords During the Pandemic
As many as 1 in 5 renters said they’ve fallen behind their payments during the pandemic. If you own several rental properties, more than one of your tenants, if not all, probably asked for some flexibility on your end. At least one tenant might’ve even vacated their unit because they have nothing to pay you anymore.
Luckily for the affected tenants, some apartment communities have bent down their policies. 37% of renters had their late payment fees waived, and 66% took advantage of this opportunity to pay rent later in the month.
Gen X and Millennial renters seemed to be in a better financial position; more than 29% of them managed to pay rent via credit card. Out of those, 50% were Gen-Xers, and 28% were Millennials. 52% of both generations said they’ve always paid the rent with their credit cards, while 32% could pay in cash but took advantage of their communities absorbing the fees associated with credit card rent payments. Lastly, 12% said they had no other way to pay rent.
Considering these findings, landlords don’t seem badly hit by the pandemic’s impact at all. But of course, that doesn’t mean their finances didn’t suffer a dent. You can be a testament to that fact if you also experienced payment issues with your tenants. But being flexible had surely helped you. The more considerate you are toward your tenants, the more likely they will stay and eventually be back on track with their payments.
Options for Renters Who Can’t Pay on Time
You’re not at all bound for bankruptcy if most of your tenants couldn’t pay rent. As long as you abide by the law, you won’t lose tenants, even if they couldn’t pay you on time.
The Centers for Disease Control and Prevention (CDC) issued an order requiring landlords to keep their tenants in their units until the end of the year. This order made evictions due to late payments illegal. So as long as your tenants provided a declaration about their payment issues, they can stay on your property. The mutual respect between the two of you can boost your property’s reputation, attracting more tenants in the future.
Ignoring CDC’s order will not coerce tenants into paying money they don’t have. Instead, it can become an open invitation to ruin your own reputation. You can be branded as a landlord who disregards the law and the health and safety of your tenants. Remember, the pandemic relief efforts were mostly for the benefit of the people who lost their jobs and shelters. If you’re grumbling about a late or partial payment, the public won’t likely sympathize with you.
Boosting Rentals While in a Pandemic
At the end of the day, a rental property is a business and a source of income. If that’s where most of your cash flow is coming from, it’s reasonable to keep it alive.
Consider topping up your property. Make a one-time investment, such as home improvements, to make your properties more marketable. Renters prefer spaces that allow them to do different activities, like working or exercising.
And since work-from-home has now become the norm, make your properties work-from-home ready. Install an A/C unit, a faster internet connection, and create a suitable space for working. You don’t need to buy office equipment, but make the space accommodate a work desk and an office chair.
If all else fails, you can sell your properties and start anew. If your rental property is a house, a simple Google search on how to sell your house fast will lead you to companies buying homes quickly, without asking you to make improvements and repairs.
Overall, a rental property can still be profitable during this period, but it’s wiser to keep your options open. If you’re no longer attracting payments and new tenants, you can give up the business for now and bring it back when we’ve finally put the pandemic under control.