Apartment rent collections holding strong?

Question

I find myself taking both sides of the "Rent Payment Rate at 95% of Prior Month" headline from an article like this. On one hand 95% seems like a high percentage - that's an A after all! But on the other hand, if all your other costs stay the same, a 5% reduction in expected rent is gonna hit the bottom line hard.

My properties are low leverage and have plenty of buffer so a 5% reduction doesn't factor in, especially in the short term, but wondering how you all interpret a 95% collection rate from pre-COVID levels. "Pretty good considering" or "this is not good"?

Michael Le · Answer

If I manage to get out of this averaging 95% of my pre-COVID collections for the next 6-12 months I will be absolutely jumping for joy. We're in an absolute, never happened like this before recession and I'm looking to just survive. If I not only survive but continue to make money (and if you aren't making money at 95% then you have other issues) then that is such a good scenario I'm not sure why this is even a question.

Evan Polaski · Answer

@Ryan Daigle I view it as good, considering all the fear pumped into people's minds in mid to late March.  But as @Justin Manley mentioned is the bigger test with many having had to live off savings for a month plus at this point.  And with the deluge of unemployment claims overburdening the unemployment offices, most claims have been delayed 3-4 weeks, so theoretically millions of tenants have not had income for 3-4 and no unemployment coming in yet.

Jill F. · Answer

We collected 100% for April in D+ through B- neighborhoods.

Justin Manley · Answer

I would vote for uninformative. The economic impact has yet to hit I would think.

Btw, I do several types of rental property and they are being affected differently.

Low income is doing better and rent collections are high this month.

I would think your %95 is for a standardish market.

University is ok for this month because of all the people who bought out of the contract. :(

Next month for my university properties...... gona Suck (70% rent collection if I am lucky.)!