Why is Rent still due during COVID-19?

328 Replies

I have had the opportunity to find and work with some of the best property managers (after many years) for our current properties. Over the years we have gone from me just treating them like just a service I hired to us working together toward a common goal and reaching a place of trust. So a few of our managers have reached out to us regarding their interactions with our tenants regarding the COVID-19 situation. So here goes: 

Rent is still due. Why? 

1 - Tenants should also have saved 'reserves' in place - so if they are already missing their rent payment come April just a few weeks into this, they are selectively deciding not to pay for their shelter in hopes of rent forgiveness - which is no different than shoplifting or any other use of a service with the knowing intention not to pay - no one to blame but one person.

2 - There are options available to Tenants: They can always put it on a credit card, which really already has a payment plan set up for them with their terms... a tenant can quite literally just pay the minimum until they get back on their fee, not suggesting anyone just may the minimum on a CC but that is an option, just like it is an option to put food, utilities and anything else on a credit card, shelter is no different. 

3 - There are loans available to Tenant: Applying for temporary loans to make ends meet are available and even more so now - and before anyone says you won't qualify - there's only one person to blame for that and yes... a CC is a type of loan when used - so if you have a CC... you can access to borrowed funds with a re-payment system. 

4 - Why does a tenant have to live in the current rental? - As if there aren't options...So if a single lady is renting a 4 bedroom waterfront rental for $3,000/mo. and then says she cant afford rent but continues to remain in place i.e. selectively choosing not to move out and just stay - wouldn't her moving out to 4 bedroom non-waterfront for $1,600/mo. make more sense? or better yet... downsize,  that is... if the tenant did really want to make it right. - so again selectively choosing to pass on the debt to someone else without taking 'sacrifice' for you situation under your own wing... is a choice. 

5 - One of our managers was trying to work out a deal with a tenant for deferred rent and contacted the employer to verify the situation before approving the deferred rent plan... The employer:

 'Yes unfortunately we had to lay him off due to this pandemic, but it just important you take that into consideration because everyone needs shelter, you should certainly let him stay'

---- Couldn't agree more everyone does need shelter just like everyone does need food and water, the baffling question is... if the this employer is worried about the employees than why not just continue to pay them a salary during this entire thing?.... oh yeah... because they want to pass the buck... essentially saying 'No, I cant afford to continue paying them because we have no customers but you should offer to continue paying for the mortgage on their rental even though your customer (tenant) is not paying you' - hypocrisy at its best. 

Albeit most that request assistance as it stands RIGHT NOW... only a few weeks into this situation... are unwilling to take on the responsibility for themselves onto their shoulders and find it just easier to put it onto someone else... which is why we have instructed our PM's to 1) verify the tenant's unemployment with connection to COVID-19, 2) allow them to take advantage of the options above, deffer rent for only those that truly absolutely need it, and file for eviction for all the rest to be in place when courts start the process... because as mentioned above options remain in helping tenants make ends meet but not paying for a product you are currently consuming is never going to be an option, if it is... next time you go to the grocery store for food... a first level necessity... try to walkout with a cart full of it without paying and see if they'll absorb the cost - the audacity of the manager even trying to stop you! 

@Heather Frusco Nice outline; with the number of politicians, mayors etc espousing their ideas you almost can't blame tenants for allowing themselves to be 'confused' and at least test the water when it comes to rent. We will have a much better sense of things in a week-right? All the best to y'all!

The median renter household has virtually no cash savings.

According to Harvard’s Joint Center for Housing Studies:

-- Renters have median cash savings of $630 and the median renter net worth, including all assets, is just $5,100. 

-- Homeowners have cash savings 10 times as large as that of renters—$6,400—and median net worth is about 35 times as much—$173,010.

Meaning most renter households have neither a personal safety net nor a way to build assets for the future.

Saying that they SHOULD have saved money flies in the face of the customers earnings and lifestyle habits.

Those with more earnings and better lifestyle habits tend to not be our customers (they own their own home).

Renters don't earn enough to save for a home or make home payments (many never will, especially if not married), and many tend to "Live in the Moment".

If they didn't have these particulars, they wouldn't need us to provide housing for them (a Leopard isn't going to change his spots, so to speak).

Just my 2 cents.

honestly. lets not be the ******* landlords everyone thinks we are. Howabout the idea that everyone should share in the pain equally??  why is it just the hourly wage earner that needs to float everything??

While we are on shutdown, many people are still working and many more are getting temp jobs.....   My feeling is - if a tenant is having a hardship I will share that hardship with them... and it will depend on  the circumstances what that means.

Be a good human....  share this pain so we ALL can come out ok and so that the public sentiment of LLs does not erode further. 

@Heather Frusco   you know  maybe this wont be the catastrophic issue landlords are worried about

I suspect everyone got March rent ?  right.. Lets see what happens in April. Of course those in the middle of evictions or bad

tenants currently sound like they have not a lot of recourse. 

Unless your saying that there is a huge amount of tenants calling PM's now and saying we aint paying.?

No question there is going to be some non pay's becasue they were laid off and have no check or their unemployment has not

kicked in whatever the excuse. .. but i suspect there are going to be many

who use this as an excuse and try to parlay that into not paying.

thinking Most tenants should or could have savings to pay months of rent with no income is not reality either right ?

Just is what it is..

I wonder if we were betting what do you think the deliquencies are REALLY going to be in April.  10%  20%  30%

I think 5 to 10% is what it always is anyway. not 100% of tenants pay rent every month..

come the middle of April it will be interesting to see what real world numbers are by real world Landlords.

I know you are out there.  Landlords who are running on fumes.   Mortgage companies do accept Credit Cards.  If they dont go get a cash advance and the pay Mortgage.

The economy isnt all or nothing.  Example 5,000 room hotel might only open 500 rooms to start.  Maybe fully operational a year from now.  

Its going to hurt.

Originally posted by @Asakusa Chimpo:

Credit card as method to pay rent auto qualifies as person recommending being Cold Hearted.

Why is that? It is just another option available to Tenants. 

 

Originally posted by @Mary M. :

honestly. lets not be the ******* landlords everyone thinks we are. Howabout the idea that everyone should share in the pain equally??  why is it just the hourly wage earner that needs to float everything??

While we are on shutdown, many people are still working and many more are getting temp jobs.....   My feeling is - if a tenant is having a hardship I will share that hardship with them... and it will depend on  the circumstances what that means.

Be a good human....  share this pain so we ALL can come out ok and so that the public sentiment of LLs does not erode further. 

Mary, you can certainly share in the hardship... I'm just curious and I wonder will a tenant reciprocate and share in one of your hardships i.e. mortgage late fees ? 

@Heather Frusco Thank you for the post. I understand that there are still companies hiring, so if a tenant loses their job, there are still options to make money, such as the grocery industry. When I first came to this country, I was prepared to clean toilets at gas stations. That and unemployment, there really is no excuse in the short term to not pay rent. 

Originally posted by @Mary M. :

Howabout the idea that everyone should share in the pain equally??  

Well Comrade Mary, sharing the pain equally would reward those who failed to prepare/sacrifice and punish those that did prepare/sacrifice. 

I sacrificed to buy a unit. I pay to keep it in habitable condition. I sacrificed to build up reserves so that a rent interruption or major capital expense will not affect my ability to maintain ownership of the unit (and therefore allow you to continue to live there) or its habitability. The fact that you as a renter did not sacrifice and save and now are in pain is not a reason to try and have me share your pain. 

Renting is a business transaction. We rent a place for market price. Pretty simple. Now if a landlord is going to share in the pain during bad times, shouldn't they also share in the reward when times are good? Right, Comrade, we want equality! So if I as a landlord should take 50% of the market rent for the next 3 months because times are bad for you, shouldn't I be entitled to more when times are good for you?

I'm sure you are aware of the Fight For $15 movement. A lot of people here went from $12/hr to $15/hr. Should I as a landlord get a 25% bump in rent because the tenant got a 25% raise? Seems fair to share in the good times...

@Heather Frusco there is a LOT of options out there and IMO tenants should not carry the burden of this pandemic just like hourly workers shouldnt 

Mortgages can be dealt with by calling your mortgage co 


also SBA had emergency funding available 





Yeah, more greedy landlord comments. Lets be sure to look like total asses to the world during this human crises. 

I will help where I can, knowing I get "rewarded" by being a good person. this also, btw is good for business. I get top ratings as a LL and get lots of referrals and rarely do I have an opening.  

People think this type of business philosophy os weak - its not - I promise :) 


Eta: the govt is going to be the lender/payer of last resort - my guess is that all those that make snarky "comrade" comments will have no problem eating at the emergency fund trough - or, maybe you will be sending your cash the govt is sending back? When you do that, then lets talk :)


Originally posted by @Mary M. :

@Heather Frusco there is a LOT of options out there and IMO tenants should not carry the burden of this pandemic just like hourly workers shouldnt 

Mortgages can be dealt with by calling your mortgage co 


also SBA had emergency funding available

What burden are you referring to? Are you referring to a tenant making their rent payment as scheduled but now being offered options by their landlords, as a courtesy... is that the burden you're referring to? Or are you referring to the burden of making rent all together? - Lastly, what do options available to landlords have ANYTHING to do with whether or not a Tenant makes their rent payment?

Originally posted by @Scott Mac :

The median renter household has virtually no cash savings.

According to Harvard’s Joint Center for Housing Studies:

-- Renters have median cash savings of $630 and the median renter net worth, including all assets, is just $5,100. 

-- Homeowners have cash savings 10 times as large as that of renters—$6,400—and median net worth is about 35 times as much—$173,010.

Meaning most renter households have neither a personal safety net nor a way to build assets for the future.

Saying that they SHOULD have saved money flies in the face of the customers earnings and lifestyle habits.

Those with more earnings and better lifestyle habits tend to not be our customers (they own their own home).

Renters don't earn enough to save for a home or make home payments (many never will, especially if not married), and many tend to "Live in the Moment".

If they didn't have these particulars, they wouldn't need us to provide housing for them (a Leopard isn't going to change his spots, so to speak).

Just my 2 cents.