Whether you’re new to real estate investment or you’ve been at it for a while, the COVID-19 pandemic presents some unique challenges to landlords and property managers.
Many of our Addition Financial members have come to us for advice on how to handle rental properties during a crisis. A recent Forbes article provided some helpful pointers and strategies that might help. Here’s what you need to know.
Keeping Properties Safe
Because COVID-19 is a public health crisis, it’s your responsibility to put the health and safety of your tenants, employees and contractors above everything else.
Among other things, that may mean:
- Articulating social distancing procedures for tenants, staff and visitors
- Adopting cleaning and sanitization recommendations from the CDC for common areas
- Providing masks, gloves and other personal protection equipment to employees
- Reducing or eliminating non-essential maintenance
Of course, you’ll need to comply with any federal, state or local laws regarding COVID-19, which may include closing common areas such as fitness centers and pools for the safety of your tenants and staff.
It’s important to put any safety precautions or administrative changes in writing to avoid confusion.
Communicating with Tenants and Staff
One of the areas where we’ve seen a lot of businesses rise to the occasion during this crisis is in the way they communicate. As a property owner and landlord, it’s your job to make sure that everyone who lives or works on your property understands their rights and responsibilities.
You should expect to increase your communication with tenants in regard to:
- Social distancing policies
- Safety measures
- Closures and limitations
- Maintenance
- Rental payments
If you already have a newsletter for tenants, you can use your mailing list to keep them informed. You should also put relevant COVID-19 information on your property website or rent portal, and you may want to consider using text messaging to communicate, as well.
For employees, we recommend creating written policies for COVID-19 procedures and training employees when necessary. For example, you might need to demonstrate proper CDC cleaning recommendations to ensure your staff understands their responsibilities.
Rent Relief and Financial Considerations
One of the most difficult aspects of the COVID-19 crisis is that millions of Americans have lost their jobs. The $1,200 stimulus checks offered some relief, but for many, it’s not enough to meet their financial responsibilities, including rent.
Let’s start with legal obligations. In some parts of the country, governors have enacted protections that help both tenants and landlords. For example, in Florida, Governor DeSantis signed Executive Order 20-94, which suspends mortgage foreclosures and evictions for non-payment of rent through June 2, 2020.
In the short term, you won’t be able to evict tenants for non-payment. Some landlords have chosen to work with their tenants by announcing rent leniency programs, offering payment plans, or even waiving rent payments for a month or more. We read about one landlord who decided to allow tenants to pay with credit cards and waived the 3% card processing fee.
The option you choose will depend upon your ability to withstand a loss of rental income. However, you may get the best results with your tenants if you enact policy changes that offer some peace of mind during this stressful time.
Taking a proactive approach to rent collection allows you to build some good will with your tenants. It may also help to prevent unwanted vacancies.
You may also need to lay off some employees or reduce their hours. Here again, it’s important to be compassionate and do as little harm as possible. Make sure to be clear with your employees, so they understand the changes you’re making and why they’re necessary.
Property management is a challenge at the best of times, and the current crisis requires property owners and management companies to rise to the occasion. We suggest looking at your own financial picture first, so you can plan accordingly.
Need help with financial planning during the evolving COVID-19 crisis? Click here to become an Addition Financial member today!
Posted on Jun 10, 2020
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