The Covid-19 pandemic has created major challenges for the rental market in 2020. With surging unemployment and lower incomes, a number of tenants have not been able to make their regular rent payments. It is also important to remember that landlords are taking a hit during the pandemic as well.
Almost 80% of landlords depend on their rental income as their means to make mortgage payments, taxes, insurance and general upkeep of the properties. Some fear they may have to let go of their properties because of the financial hardship, as their relatively safe investment has become a cost centre.
There are some ways landlords can ensure continued payments from their tenants.
Set up a new rent payment plan
If your tenants Have fallen on some tough times and are unable to pay their rent, whatever the reason may be, chances are, they may still be able to make a smaller payment. Set up a plan where the tenant can pay a minimum amount, until their current situation gets better. You may also discuss ways in which they can pay back what the rest at a later point.
Be flexible in rent deposit dates
Rent is usually collected on the first of every month and many landlords are quite rigid on that rule. Some even levy a late payment charge. With so many tenants unable to pay their rents altogether, demanding that rent be paid on the first of every month may not help anyone. Let your tenants know that they can pay their rent when they can, and even in several instalments if they prefer. It may help relieve pressure on your tenant to know they don’t have to dole out a huge amount of money in one go. You may even set up a credit card rent payment system to help them.
Communication is key
A number of times, tenants only have a transaction-based relationship with their landlords. Landlords may not want to deal with their tenants directly, often using agents on their behalf for all communications. So tenants do not see a person or a family depending on their punctual payments to pay the mortgage. Having a direct conversation with your tenants to understand their situation and agree to work with them during the crisis builds a very human relationship that helps tenants see fairness and from landlords and motivates cooperation from them.
Landlords can also look up regulations from their local governments which may provide mortgage payment extensions or relief. These are unprecedented times and everyone, landlords and tenants alike, are impacted with job losses and business shutdowns, while trying to get used to the new normal. It helps to look out for one another and make the best of the situation.