COVID-19 Impact on Landlords and Property Managers
Since the beginning of the pandemic, landlords and property managers have been on an emotional roller coaster ride. The COVID-19 impact on landlords ranges from having to constantly update themselves on county, city and state moratoriums to having to come up with new safety protocols for contact less viewings of vacancies. On top of it all, thinking ahead of how many tenants won’t be able to pay the following month’s rent due to a loss of income?
How many tenants couldn’t pay rent for April 2020?
During the month of May, AAOA was able to survey over 1,000 of their members to get a feel of how COVID-19 was impacting landlords and the rental property industry. The survey included questions such as how many tenants paid their rent in full for April and May. It is also asked how landlords were dealing with nonpayment of rent.
For the month of April, the survey showed that 54.3% of landlords reported they had tenants that were unable to pay their rent due to a COVID-19 related loss of income.
While unemployment rates sky rocketed to 14.7% nationwide in April, it showed a slight improvement at 13.3% for May. We also can’t forget to mention the stimulus checks and unemployment benefits that were handed out by Congress that began rolling out during the second half of April. Does this mean we would see an improvement on tenants being able to pay rent?
The survey showed that 58.92% of landlord reported they had tenants that were unable to pay their rent due to a COVID-19 related loss of income which was slightly higher than April.
June 2020 Update
For the third straight month, AAOA asked over 1,000 of their landlord and property manager members for valuable information on how many tenants paid their rent in full. The numbers for June are in!
The amount of landlord who had at least one tenant either asks for rent deferral or stated that they couldn’t pay rent due to a COVID-19 related loss of income dropped slightly to 58.29%.
The results for June are giving landlords and the entire property rental industry a little optimism on what could mean a recovering economy. Will we see improvements for the summer?
Are landlords willing to work with tenants?
The survey showed that in April, 67.29% of landlords were willing to work with their tenants to come up with some sort of payment plant or defer rent for an agreed amount of time. While seeing an increase of tenants not being able to pay rent in May, this number then surged to 79.84%.
Landlords are most likely now getting a better idea of how COVID-19 is impacting everyone and how devastating it is on the economy.
Crippling eviction moratoriums and the sudden closure of courts may also have something to do with the new wave of compassion towards their tenants. How could landlords enforce nonpayment of rent when some moratoriums won’t even allow you to serve a 3 day notice? These drastic “protective” measures leave landlords no choice but to work directly with tenants.
A lot of landlords have also opted to create written agreements, or “promise to pay” letters. You can ask your attorney or your apartment association for more help on these.
What is the biggest concern for landlords during COVID-19 times?
When landlords were asked this question COVID-19 impact on landlords, the top answer remained the same for three straight months. The biggest concern landlords have is their tenant not being able to pay their next month’s rent.
For the month of April, it was at 43.88% followed by landlords not being able to pay their mortgage at 19.09%.
In May, 43.49% of landlords were concerned about tenants not being able to pay their rent followed by not being able to pay their mortgage at 17.96%
In June, 42.01% of landlords remained concerned about whether or not their tenants would pay their rent.
We’re seeing the economy begin to reopen now in July, 2020 and with it come, perhaps, a sense of optimism both for tenants and landlords as tenants begin to recover jobs which help make ends meet. The long term effects of rent deferments, however, is something we may not know for quite some time.
Additional COVID-19 impact on landlords to consider
When it comes to eviction moratoriums, which are still in place on county, city and state levels, landlords are opting to throw out 12 or 24 month leases and switching to month-to-month contracts. This will enable them to easily start evicting problematic and nonpaying tenants.
The industry consensus is that of trying to create short term solutions for anyone who is affected. It is a lot easier and cheaper to accept partial rent or to come up with payment plans for the more affected tenants. Some landlords have gone as far as forgiving a month’s rent!
At Fast Eviction Service, help on any of the issues discussed in this article is simply a click or phone call away. Email firstname.lastname@example.org or call our office at (800) 686-8686 to discuss your questions for a free evaluation of your case.
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This post is filed under: Landlord & Property Management