Why is Rent still due during COVID-19?

Why is Rent still due during COVID-19?

Investor · Union, NJ · Member since 2020 · 81 posts · 312 votes

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! 

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Rental Property Investor · Portland OR · Member since 2018 · 2k+ posts · 3k+ votes
6y

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. 

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  • New to Real Estate · Poughkeepsie, New York. · Member since 2019 · 26 posts · 15 votes
    6y

    @Scott Mac

    This is true Scott. I am a renter at the moment but I learned from my mom to always save for ☔ days. Now I can honestly say we have 6 months of expenses saved up and growing. I know many others who are renters that have less than the $630 in their savings and it's not because they dont make enough. Take my co-workers, for example, we all make the same but they have poor habits of eating out every day while I cook at home and bring to work. If you can't save $10 out of $1,000 you won't save $1,000 out of $100,000.

  • Attorney · Wilsonville, OR · Member since 2017 · 504 posts · 411 votes
    6y

    @Jay Hinrichs hit the nail on the head. Lets see what real world numbers actually look like. I suspect from my clients that the number will be lower then you think. Tenants also have checks coming from the government to help them out and their businesses. @Heather Frusco also makes very good points. At the end of the day it comes down to what kind of land-lord and business owner you are going to be as well as personal and financial decisions of your own.

  • Rental Property Investor · Beavercreek OH · Member since 2018 · 422 posts · 970 votes
    6y

    I just received an email from one of my tenants and I quote:

    No Subject

    I (John Doe) and (Jane Doe) are not able to pay rent do (sic) to both of us being laid off.

    No other details or mention of when or how they plan to repay or if this is even permissible to us. No please contact us to discuss. Nothing but this f-off one liner.

    This is why I get so pi..ed off at the give it all away crowd on this thread. These people (in a B+ class SFR) have the ultimate entitlement mentality. So many others in our populace due as well.

    I hope this event teaches some people about personal responsibility and a rainy day fund.

    BTW we are in Ohio and have been closed down 4 whole days.

  • Jerry W.Pro Member
    Moderator
    Investor · Thermopolis, WY · Member since 2012 · 4k+ posts · 4k+ votes
    6y
    It is my hope that most of those fears most of us have will be alleviated by the stimulus/bailout package.  Folks who lost their job will get unemployment and get full paycheck amounts, not the lower percentage they normally get.  There is the direct stimulus money too.  Funny thing, I can see some tenants being responsible and paying all their bills, and working to help others who are less fortunate, I can also see a few tenants not paying rent for 3 or 4 months, taking all the unemployment and incentive money and spending it like water until they are finally kicked out in 6 months hehe.  I hope that number is low, but who knows.  
  • Rental Property Investor · Portland OR · Member since 2018 · 2k+ posts · 3k+ votes
    6y

    @Gary L Wallman. That really stinks.  You might engage with them and help them understand unemployment is available for 100% of lost wages there are food stamps available etc. 

    you might also inform them that they need to provide documentation to get rent delayed   ? 

    This info might help them pay you?

  • Rental Property Investor · Beavercreek OH · Member since 2018 · 422 posts · 970 votes
    6y
    Originally posted by @Mary M.:

    @Gary L Wallman. That really stinks.  You might engage with them and help them understand unemployment is available for 100% of lost wages there are food stamps available etc. 

    you might also inform them that they need to provide documentation to get rent delayed   ? 

    This info might help them pay you?

    Mary,

    Thanks. We intend to do all of those things. Gets tough to do it on a timely basis with 120+ doors and a staff of one. LOL

    My reason for the post was more to show how audacious people are. No sorry or we can try or will you accept half. Nope just F off Mr. Landlord.

    Gary

  • Rental Property Investor · Portland OR · Member since 2018 · 2k+ posts · 3k+ votes
    6y

    @Gary L Wallman maybe they are afraid of the situation and are trying to mitigate that fear by waiting to the last minute and just stating the facts.... 

    Hoping this is your only “dear landlord” 

  • Investor · Singapore · Member since 2013 · 1k+ posts · 3k+ votes
    6y

    Yeah, I do feel bad for landlords that are going to struggle just due to market forces alone right now.  But if you're extra smacked because the left leaning area you opted to invest in also kicks you while you're down -- well, don't allow yourself to have that happen. Get out of those armpits. 

    In the place you call the "armpit" i.e the Bay Area, I have a townhouse occupied by an engineer paying over 3500$/month whose rent I have no doubt whatsoever will hit my account on the 29th as it always does. In your capitalist heaven red state of Indiana I have multiple rentals that I have no idea will pay or not. And even if I can evict them, who will rent now?  Your so called armpits are the economic engines that drive America while the opiod addicted trash in the red states suck up our taxes. Sound a bit harsh? I know its an exaggeration but no different than your categorization of the most productive and educated states in the country as its "armpit". 

  • Specialist · Honolulu, HI · Member since 2014 · 1k+ posts · 1k+ votes
    6y
    Originally posted by @Account Closed:

    Yeah, I do feel bad for landlords that are going to struggle just due to market forces alone right now.  But if you're extra smacked because the left leaning area you opted to invest in also kicks you while you're down -- well, don't allow yourself to have that happen. Get out of those armpits. 

    In the place you call the "armpit" i.e the Bay Area, I have a townhouse occupied by an engineer paying over 3500$/month whose rent I have no doubt whatsoever will hit my account on the 29th as it always does. In your capitalist heaven red state of Indiana I have multiple rentals that I have no idea will pay or not. And even if I can evict them, who will rent now?  Your so called armpits are the economic engines that drive America while the opiod addicted trash in the red states suck up our taxes. Sound a bit harsh? I know its an exaggeration but no different than your categorization of the most productive and educated states in the country as its "armpit". 

     Educated in America is not something we should brag about. 

    I can say this, I have had 13 years of post high school higher education (college, medical school, residency) in the US. Other countries are miles ahead of us in all aspects of education.

    California is okay, but being taxed to death doesn't justify living there IMO. Hawaii has better weather (best in the world many would say), world class hiking and scenery (often a 5-10 minute drive, as opposed to 1-2 hours from a city in CA), better beaches by far, better surfing, less taxes and less red tape, more landlord friendly in HI (can evict in 3 weeks), better travel hub to Asia, etc.

    CA and NY residents suffer from the same fate. Most have never traveled overseas because they think its the best where they are. Well, I don't enjoy being taxed at 52% not to mention the random taxes they seem to dream up every year.

    I believe its your patriotic duty to pay as little taxes as possible legally. There is ALWAYS leakage, beaurocracy, and red tape when you give you hard earned money to the government. Therefore its wasted in one way or another.

    Its not the 60s or 70s anymore. All of the preconceived notions we were brought up on about "the rest of the world" as patently false once you step outside the US and take the time to travel.

  • Rental Property Investor · Houston, TX · Member since 2014 · 139 posts · 140 votes
    6y

    @Mary Mitchell the key point is "Lender" so basically we're going to get a loan from the government then makes payments for rent that was owed to us but not received....

  • Specialist · Portland, OR · Member since 2010 · 3k+ posts · 1k+ votes
    6y

    In a situation where one (of 2) on the lease has money while the other is laid off and offering half her share of the rent. We are required to defer unpaid rent and allow 6 months to repay. The paying tenant wants me to deal directly with the short paying tenant and collect when possible. One lease. This is not the agreement. One tenant pays and collects from the other. Thoughts how to handle?

  • Rental Property Investor · Houston, TX · Member since 2014 · 139 posts · 140 votes
    6y

    @Mary White this applies to good responsible tenants. Yes i have those as well as i respect them and trust them enough to work something out. Then theres the crap renter's warehouse tenant that we had evicted due to nonpayment since mid-November who trashed our beautifully kept home when they left. Each tenant has to be treated accordingly depending on how they handle their relationship with you. It's based on trust.

  • Member since 2019 · 33 posts · 41 votes
    6y

    @Andrey Y. Education in the US is terrible and inconsistent.  This is what leads us to have around 16% of our population believing that Earth is flat.  It also gives us anti-vaxxers who ignore all science and simply spout heavily discredited stuff they read on websites that have no scientific validity.  We also have in America people who are told in science classes that the theory of evolution is entirely false and the Earth is in fact ~8,000 years old, and originally populated by Adam and Eve.  That is a religious theory and yet is presented as proven science that is never to be questioned to these people.  That is an unfortunate product of our education system that has little consistency or oversight and can pretty much teach whatever they want to.

    Anyways, bringing the point back to the discussion of renters and their ability to pay we should wait and see what happens with real-world numbers.  Given how people tend to act, the consequences of NOT paying your rent/mortgage have been taken away for 4 months so we shall see if people will continue paying given they no longer are forced to.  I'll be optimistic and say most will attempt to, or will keep paying their rent/mortgage but if too many Americans decide to not keep their promise to pay rent/mortgage we may have another financial disaster on our hands as many LL go out of business and banks panic.  That is unlikely I think, and I think only a few won't pay their bills.  So this would only bankrupt LL's who do not keep any reserves.  Like that guy earlier who bought 10 houses cash and somehow did not have a reserve set aside for a $400/month expense on each one.  If your financial health prior was terrible going in, it'll be worse or bankrupt by the time you get out.  That said this would only the the first month of any non-payments so we shall see what the effects shall be.  What a time to be alive.

  • Rental Property Investor · MI · Member since 2019 · 192 posts · 205 votes
    6y
    Originally posted by @Gary L Wallman:

    I just received an email from one of my tenants and I quote:

    No Subject

    I (John Doe) and (Jane Doe) are not able to pay rent do (sic) to both of us being laid off.

    No other details or mention of when or how they plan to repay or if this is even permissible to us. No please contact us to discuss. Nothing but this f-off one liner.

    This is why I get so pi..ed off at the give it all away crowd on this thread. These people (in a B+ class SFR) have the ultimate entitlement mentality. So many others in our populace due as well.

    I hope this event teaches some people about personal responsibility and a rainy day fund.

    BTW we are in Ohio and have been closed down 4 whole days.

     Oh my goodness! I hope I don’t get a letter like that. How disrespectful! Nonchalant; No sense of urgency; no fear: no worry.
    If I was a tenant in this situation, I would be shaking in my boots!! I can’t wait to see your reply letter to them. Please post. 

  • Member since 2020 · 2 posts · 3 votes
    6y
    It is not a rumor dumbass. Cuomo himself stated it. NO ONE IS ALLOWED TO CHARGE RENT OR MORTGAGE. AGENTS ARE NOT EVEN ALLOWED TO SHOW HOMES FOR SALE. WATCH THE NEWS. IT ALL OBER THE NEWS. I HATE STUPID PPL.
    Originally posted by @Eddie T.:
    Originally posted by @Miguel Sanchez:

    @Heather Frusco I guess it depends on your state. In New York rent and mortgages are suspended for 90 days.

    You are wrong sir their is no suspension of rent in NY, that is a bad rumor being spread. 

  • Investor · Omaha, NE · Member since 2015 · 366 posts · 184 votes
    6y

    I, personally, will be testing my tenants well during this crisis. I believe it starts with good screening. I don’t have one tenant that I wished I didn’t have. I’m sure most renters live paycheck to paycheck, or close to it. I will not evict anyone of my tenants, if they lose their jobs or can’t work due to having the virus or caring for someone with it. Does that mean they get a free ride, and their rent is forgotten? No. But, I will work with Them to establish a rent payback plan, to get them all caught up, once this mess stops. I believe this event will have such a huge compounding effect on our economy that if we evicted everyone affected by this, it would be a disaster. I feel like I’m just ranting, but, I consider myself to have good ethics and I feel like I’m in a good position to help some people, of needed.

  • Rental Property Investor · Caledonia, IL · Member since 2015 · 289 posts · 213 votes
    6y

    Welcome to Crazytown,USA pick a city or State. All new territory. TBH not sure what the right answer is but know one thing for sure. Whatever feels right for you do it and stop complaining because others disagree with your position. We have a mostly A/B tenant base and have not heard from 95% of our tenants. the 4/5 we have heard from our respectful and likewise we will treat them and all others with dignity.No one asked for this mess no one but here it is and we must deal with the cards in hand. Not suppose to be religious on here but someone much wiser than myself said "Love God love people" . Not sure how any of can do better than try to abide by these words by being a better human. Countdown 4 days  . . . Happy investing and I for one am very very thankful for ALL of my tenants as they have helped build our net worth.

  • Rental Property Investor · Ogden, UT · Member since 2019 · 24 posts · 13 votes
    6y

    @Andrew Thornton

    I couldn’t have said it better. But I guess I’ll try

    I agree with OP that it is theft, plain and simple, for a tenant not to pay rent and the landlord often gets the short end of the stick when it comes to getting what they are owed for their goods and services. With that said, if your “store” can only serve one “customer” at a time and it’s often hard to find another customer, not to mention get the current non-paying customer out, especially during this pandemic. Then I think it’s in our best interest to show a little tiny bit of well measured and smart compassion so that the customer that we do have doesn’t hate us and still feels obligated to pay. It is absolutely the tenants responsibility to have savings and be smart and responsible enough to have planned ahead, but if everyone was like that I don’t think we would have any “customers” at all, because they’d be too smart to be paying us any money, haha. But seriously, just determine which of your tenants, if any, are actually in need and work out a reasonable payment plan with them, if you can handle it financially, and make it very clear that it is a charitable act and you still fully intend to get everything you were promised in the legally binding contract that you both signed.

  • Investor · Chicago, IL · Member since 2017 · 40 posts · 33 votes
    6y

    Good will is priceless! I have excellent relationships with all of my tenants now (7 doors) and I expect to maintain those relationships in the future. Let's see how everyone does by April 5th.

  • Joe SeegersPro Member
    Investor · Appleton, WI · Member since 2011 · 29 posts · 29 votes
    6y

    the big thing we all have to stick together as landlords,just like the president didnot cause this ,he is trying to find a way to deal with this.that means for us ,working with tenants such finding ways for them to pay our rent.such as putting rent on credit card,paying half now and half when get stimulas check,adding to follow months rent,or any other way you can think.but the big thing telling tenant they are still on the hook for rent.the only threat you have is when this is over they will be first to be evicted.but should know your tenants from previous dealings with them who will be the ones hard to work with.the big thing on my rant we should as landlords look to form a union with all landlords on bigger pockets and your local apt association to have our voice heard to are goverment officials.if we all get together ,maybe in next stimulas bill ,landlords will be in it.this is not going to be over quick.look  to china,factories opening,but laying off people because of no demand for there product.so lets get together ,and use our time wisely,what does bigger pockets have over 100,000 members.lets think together

  • Investor · Union, NJ · Member since 2020 · 81 posts · 312 votes
    6y
    Originally posted by @Fitzroy Harvey:

    @Heather Frusco

    I love this. What you said about only one person to blame is spot on because people don't like to take responsibility for their actions. Many people dont understand the power of saving for rainy days until the rain starts falling then it's too late. From the book the Richest man in Babylon "For every ten coins, 💰you earn spend but nine."

    If we all learn to do so in times like this we won't have to fret.

    Fritz, thank you and agreed. Most don't like to hear that they need to take personal responsibility for their own situation and instead always find it easier for someone else to provide assistance. At what point does it become a LL's responsibility to provide assistance to a tenant (another grown adult) which has failed to prepare and save appropriately? Not saying that LL's can't help out but if they do... it's a courtesy... NOT a requirement or an entitlement. 

    The govt. is planning to credit each individual $1,200... some see this as an 'entitlement' which are likely the same people which don't like to hear that they are responsible for their own actions and their position in life. Others see it for what it is... a courteous act by our government. Just for perspective, the US govt. the most powerful govt. in the world is crediting individuals $1,200 - flip that around and the average rent in the US is $1,216... heck some expect LL's to absorb their rent (entitlement)... I don't know about most but most LL's are no where near as as powerful as the US govt. - they're people with families - but yet... are expected to support these grown adults more so?... 

    Additionally, most in the 'entitlement mentality' camp fret a the idea of 'payment options' because it simply implies that individuals are still responsible for their situation... what most fail to realize is that those 'options' are a complete courtesy by their LL's, if offered at all, in an effort to help Tenants make ends meet... the alternative would be 'no options'. But it gets worse... those with entitlement mentalities not only fail to see options given to them by the LL's as a courtesy but... they actually get upset if the options given are not 'free' - akin to receiving a gift and asking for more... heck if even the US govt. isn't willing to support these adults much more than $1,200... what makes anyone think that LL's should, or even have the resources to support them 2-3x's more? 

  • Rental Property Investor · Houston, TX · Member since 2014 · 139 posts · 140 votes
    6y

    @Heather Frusco i have close family members like this. Their sense of entitlement has distanced us and caused me to grow a thicker skin. I can read BS from a mile away and have very low tolerance for it.

  • Member since 2018 · 1k+ posts · 1k+ votes
    6y

    "Thanks, John. Why do these State Senators waste time proposing legislation that's unconstitutional?"

    __________

    Pure grandstanding and pandering. Plain and simple.

  • Theresa HarrisPro Member
    Member since 2019 · 15k+ posts · 11k+ votes
    6y

    In BC, the government is offering $500 to help tenants towards paying the rent-the money will go directly to the landlord.  There is additional money from provincial and federal government to help with other expenses.

  • Rental Property Investor · Beavercreek OH · Member since 2018 · 422 posts · 970 votes
    6y
    Originally posted by @Account Closed:

    Yeah, I do feel bad for landlords that are going to struggle just due to market forces alone right now.  But if you're extra smacked because the left leaning area you opted to invest in also kicks you while you're down -- well, don't allow yourself to have that happen. Get out of those armpits. 

    In the place you call the "armpit" i.e the Bay Area, I have a townhouse occupied by an engineer paying over 3500$/month whose rent I have no doubt whatsoever will hit my account on the 29th as it always does. In your capitalist heaven red state of Indiana I have multiple rentals that I have no idea will pay or not. And even if I can evict them, who will rent now?  Your so called armpits are the economic engines that drive America while the opiod addicted trash in the red states suck up our taxes. Sound a bit harsh? I know its an exaggeration but no different than your categorization of the most productive and educated states in the country as its "armpit". 

    Anish,

    Don't really believe in knocking someone else's home. California is indeed a beautiful and productive state.

    Which is why I can't wrap my head around why "your educated populace" elects some of the most moronic, pathetic, corrupt and downright laughable politicians of anywhere on the planet.

    Gary 

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