It’s no secret that Covid-19 has been haunting our world for quite some time.
According to reports, nearly 36.5 million Americans lost their jobs within a period of 2 months.
The unemployment rate is currently at an all-time high.
And that’s the reason why thousands of tenants all across the world aren’t paying their rents on time.
The longer the crisis continues, the higher are the chances that they won’t be able to pay their rents.
So, what exactly, as a landlord, should you do?
Should you take some kind of action? Or should you just let it pass?
Chances are that you might not be able to meet your own financial obligations.
Delay in mortgage payments might be one of your biggest concerns right now.
And that’s the reason we are here to help you out.
In this blog post, we will be taking a brief look at what you should know and do in order to tackle this situation.
Well, then! Let’s dive in.
Listed below are the points we’ll be covering:
Before we begin, let’s begin with the basics.
If it wasn’t for Covid-19, you could easily terminate the tenancy, if the tenants didn’t pay their rents on time.
You could have served them with:
And if the tenants still don’t pay their rent or simply pack their bags and move out by the deadline, landlords can simply file an eviction lawsuit to deal with the situation.
However, right now, it’s high-time.
It’s Covid-19 looming upon us.
Health & safety concerns, as a result of this crisis, have led to various states, cities, and countries, as well as courts, to place moratoriums on the evictions.
However, the scope varies greatly.
Some have banned almost all the actions with respect to the evictions. While some have postponed all the evictions or hearings until the situation is dealt with.
And if you are a landlord dealing with the same situation, chances are that your evictions might not be heard currently.
But, if there aren’t any temporary bans in your place, I would advise you not to evict the tenants during this crisis.
Evicting your tenants, right now, will lead to you being called a 'ruthless landlord' and this might negatively impact your reputation.
Instead, what I will advise you to do is considering the following options.
Firstly, I’d advise you to evaluate your personal finances.
Covid-19 has impacted the lives of millions of people all across the world. And your tenants might not be any different.
Hence, as hard as it may seem, my advice would be to take into consideration the worst-case scenario.
Maybe your ability to pay the mortgage as well as your personal bills might be impacted.
Let’s consider the worst-case scenario.
You aren’t able to pay your mortgage as well as your personal bills due to the fact that your ability to pay the mortgage hinged on monthly rental income.
So, what should you do here?
Of course, you need to take some kind of action.
There are some options you may try, such as getting in touch with your lender, asking your tenants to pay partial rent, etc.
If your financial situation isn't that poor and you already have a few months' reserves, my advice you to make a compromise with your tenants.
If you haven’t faced any trouble with your tenants in the past, you could forgive their rents.
But, if you have a bad history with them, you could put some pressure on them, by reducing or postponing rent.
Depending on your assessment, you may try working out a temporary solution with your tenants.
Listed below are a few of the options you may go with:
If you are able to, you can simply waive their rent for a month. You can make them sign an agreement to revisit the payment arrangement on a specific date.
You can postpone the rent for a month or maybe two, depending on your current situation.
Prepare a repayment agreement, stating that your tenants should pay the rent owed over time or all at once.
What you can do to help them is reduce their rents temporarily.
Take into consideration your monthly mortgage payments and personal bills and ask them to pay a reduced rent, that enables you to meet your obligations.
However, before taking some kind of action, I’d advise you to talk with your tenants.
It doesn't matter whether you have a few months' reserves, you should seek outside assistance.
What if the crisis lasts much longer?
Here’s what you can do about it.
Most of the private lenders, currently, are more than willing to work with the borrowers to make sure that they don’t lose their homes.
All you need to do is to pick up your phone and dial in the lender’s number.
Let your lender know about the steps you are willing to take.
Various states as well as countries have already extended the deadline for property tax payments. They have canceled the late fees as well as interest.
You may take a look at your country’s tax assessors’ website in order to have a better understanding.
You may seek a loan from friends, family, or private lenders.
Or you may get some assistance from the U.S. Small Business Administration. You will come across a great deal of information on their disaster loan assistance page.
Another option is to get in touch with your regular bank or credit union and ask them all about the assistance they are willing to offer.