Landlords are worried about lost rents…
As of the start of May, Property managers are receiving fewer full and partial rent payments then in April.
Many renter are having trouble paying rent due to lack of work for many businesses, while others have been rumored to be hoarding money, waiting to see where the CARES ACT takes them. Many of these concerns are understandable, but the renters with legitimate problems are being joined by tenants that are able to pay, but are using the civid-19 pandemic as an excuse to “stick it” to the property managers.
As economic effects of Covid-19 wear on, the number of renter paying on time (or at all) has dropped a noticeable, 4% across the nation, according to multi-family housing owners. Although the current conditions are not as bad as many were expecting, Landlords are still holding their breath to see what May and June will bring.
Lenders are taking a proactive approach to the loans on these rental properties.
Many banks are offering forbearance (albeit, with limited terms) on borrowers that are having problems making payments due to the coronavirus. The Paycheck Protection Program gains popularity to help business owners in keeping their employees working. One bank has reported over a one hundred million dollars in PPP loans in the last 45 days.
Although the PPP loans are seen as a good way to keep the economy running and people working, there are rumors that that banks will get “their fill” of loans and begin tightening up their qualifications in order to “pick and choose” the best borrowers. Even with the large numbers of PPP loans being processed, sources say only 1% of these loans are being requested by Property management companies and landlords.
Not all Property Managers are losing
Although property managers in charge of single-family residential housing do not report this data like multi-family property management companies do, the few that do are not reporting a drop in “paid rent” as much as their multi-unit counterparts. Much of the maintained rents rolls of single-family rental houses have been attributed to a more proactive approach with the tenants and increased communication in resolving issues as they arise. “We are staying in constant contact with our tenants and handling issues on a case by case basis. So far, it has worked out well for us”, Says Denise Tillman, Double D Property Solution. “ I have always had a good relationship with my tenants and they know they can call me if there is real need”.
Other concerns to maintaining rents for landlords is the end of the government’s temporary coronavirus relief program for the unemployed. If tenants are not back at work by the time the program is cut off, landlords will be in hardship to maintain operations of their portfolio. With this program having a time limit, landlords are questioning if tenants will pay their rent or hoard the funds, thinking any forbearance of rent is actually “forgiveness “of rent.
Tenants taking advantage of crisis
Many tenants of multi-unit buildings are reportedly being increasingly aggressive with slogans of “#cancelrent”. Groups of tenants nationwide are taking rent forbearance one step further. As tensions rise, many tenants are rallying together, hoping to get out of paying rent altogether. Since local governments have agreed to not allow eviction during the coronavirus pandemic for the purpose of protecting tenants being laid off due to a legitimate hardship, some tenants are taking this opportunity to get out of paying rent with the hopes it won’t catch up with them.