Protecting Your Rental Income During the Pandemic
The CDC has extended the federal eviction moratorium through the end of June 2021. Millions of people are behind on rent, and the eviction moratorium is leaving landlords holding the bag. One in four Americans is feeling the financial strain from Covid-19. Most renters are now living paycheck to paycheck. It is highly likely that you have tenants that can’t afford to pay their rent.
You may find that you are currently having difficulty filling your rentals during this time as well. Many people are choosing to move in with family members when they lose their jobs. This can lead to more stress as well.
What can a landlord do? Here are a few steps that can prevent loss of rental income and protect you from vacancies.
Connect current tenants to financial help
As a landlord, it isn’t your job to help your tenants find the money that they need to pay their rent. Unfortunately, many people are finding themselves in a financial bind they didn’t anticipate. Providing the resources to help them out can mean the difference between whether you get paid.
Many states have rent relief programs. California Rental Assistance provides rent assistance for renters and landlords through the California Covid-19 Rent Relief Program. Visit the Housingiskey.com application portal or call 1-833-430-2122 to apply as a renter or landlord.
The Housing Choice Voucher Program can provide financial assistance to low-income families. Public housing agencies that receive federal funds from the U.S. Department of Housing and Urban Development (HUD) administer vouchers locally. The Housing Choice Voucher Program guidebook can help tenants determine their eligibility.
Unemployment assistance is available for those who have been laid off through most state websites. Email tenants with the information on applying for unemployment benefits. Include the address, phone number, and the website of the state unemployment office.
Some tenants may be current with their payments but under financial strain. They may not know where their next paycheck will come from. Connecting these tenants with information on financial resources can help to ensure future payments.
Collect missed rent without financial strain – set up payment plans
When tenants get behind on rent, it is still important to collect the missed payments. A big monthly payment may put so much financial strain on them that they don’t even bother with it. When this happens, the landlord ends up much less of the owed income.
Setting up payment plans for tenants offers the renters a plan to help them get caught up. It can feel empowering for a renter to pay their debts and get back on track. Payment plans spread out the financial burden of a huge missed rent payment and help the landlord collect the owed income.
Fill vacancies quickly and remotely
While your aim is to get quality tenants into your apartments, you also want to achieve that quickly. One of the fastest methods of filling a vacancy is through online listings. Someone can now do these remotely for people who are wary of human interaction because of the COVID-19 pandemic.
These are the steps to filling vacancies as quickly as possible.
- List your property with online websites such as Zillow and Craigslist. These are go-to websites for apartment seekers and a great place to provide information on your rental.
- Once you get responses, track and communicate with the potential tenants through email or text. Set up virtual showings or contactless unit showings.
- Invite the top candidates through email to complete online background checks.
- You can digitally send and sign electronic lease agreements.
- Collect security deposits and set up automated rent payments online.
Many people may appreciate the remote filling option during COVID. While it is less personable, some people may feel that it is safer not to interact with many people. Remotely filling your vacancies will help to protect the future income from your real estate investments.
Landlords must be much more diligent in their screening process. It is tempting to accept the first tenant when your rental has been empty for a few months, but it is essential to do proper background checks. As you screen potential renters, make sure that they have a solid income, excellent payment history, and great references.
This is especially important during the eviction moratorium. If you accept a bad tenant and suddenly can’t get them out, you will be the one losing money.
Protect your investment
Your rental property is an investment that needs to be protected. You do not want to end up with a non-paying tenant who is trashing the place. You will end up losing the rental income as well as needing to make major improvements once the tenant moves out. It is unlikely that the security deposit will cover the damage that can come from a non-paying tenant over six months to a year. Make sure that you are supporting your tenants in their payment abilities and evaluating the potential for tenants to pay prior to getting them into an apartment or rental house.