To All The Landlords Freaking Out

To All The Landlords Freaking Out

Kyle MccawBusiness Member
Property Manager 路 Keller, TX 路 Member since 2011 路 1k+ posts 路 1k+ votes

To all the landlords.

DFW is not immune to the current economic turmoil. So yes, things are not all fine and dandy right now. So, I figured I should give a short, maybe premature, rental state of the market here. To understand where I am coming from, we focus on class B & C single family homes in North Texas. We also have two mobile home parks and very few apartments units.

Let鈥檚 step back, take a deep breath and calm down to make ration decisions. True there are many negatives in the marketplace. I don鈥檛 feel the need to state the obvious ones. So let鈥檚 just point out some positives.

  • As of 3.25.2020 less than 1% of our tenants have reached out to our firm about potential interruption in rental payments.
  • Our number of inquiries from potential tenants has decreased only 20%
  • This may because people realize that living in a small apartment is less desirable during a shelter-in-place situation.
  • Many of the professions our tenants have are in the fields that have the strongest demands now. i.e. Amazon delivery, truck drivers, Uber Drivers, Certified Nurse Assistants, School Teachers, City Workers.
  • It looks like the government is cutting checks to our tenants. Many of them don鈥檛 even have an income disruption. So this is just a bonus.
  • Many of our tenants already did or can work from home. Gotta love technology.
  • On the bright side as of March 25th none of my tenants April rent is delinquent. 馃槉 And yes many have paid early.

Going forward you may want to consider a few slight changes to your business model.

  • Having tenant default insurance is starting to look very attractive. Most of our clients declined it. But for less than a $1 a day, it sure looks like a good deal now.
  • You need to make it easier financially for tenants to rent from you. We reduced the cash out of pocket tenants need to move in. We use an insurance product to replace the security deposit. This allows tenant to move in with the purchase of a very cheap insurance policy. Ironically, it covers us better than a traditional deposit.
  • Use professional photos and video tours. This makes it easier for tenants to decide on your property without visiting it.
  • Electronic lockboxes allow self-showings. You need to be very diligent with this as there is still fraud out there.

I hope everyone finds some value in this. Don't let fear control your actions. I pray my optimistic gut feeling is correct. Time will tell.

We are in this together.

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Austin, TX 路 Member since 2019 路 5k+ posts 路 5k+ votes
6y
Originally posted by @Kyle Mccaw:

To all the landlords.

DFW ... As of 3.25.2020 less than 1% of our tenants have reached out to our firm about potential interruption in rental payments. ...

    Still water run deep (when TSHTF in tenant land). 

    Lets hope the move out in the middle of the night abandoners are few and far between.

    And, personally I think business will pick right back up quickly when this Virus thing settles down.

    We have a super Pro Business Washington climate--remember this president uses the power of the pen to make things happen to increase the US Economy (JOBS). I think we will see more of that as needed. There is no indication otherwise.

    If owners can ride this virus thing out and the lenders cooperate things might be a little lean for a while, but it will get better.

    See this reply in the discussion

    34 Replies

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    • Kyle MccawBusiness Member
      OP
      Property Manager 路 Keller, TX 路 Member since 2011 路 1k+ posts 路 1k+ votes
      6y

      @Wesley Whitehead Several companies offer the insurance to replace security deposits. We use www.SayRhino.com.

      Electronic lock-boxes do carry some risk. We have been using them for ~10yrs. Benefits far outweighed the negative. We have had a couple ranges stolen. Electric boxes have a lot of security features built into them. I don't think they are features that should be publicly posted here. So please reach out to those service providers for details. In many cases you know who to charge the expense to or file charges against. Tip - Don't use shelf showing in bad/low income neighborhoods and you should be fine. 

      McCaw Property Management4.4905 Reviews
    • Rental Property Investor 路 San Diego, CA 路 Member since 2013 路 3k+ posts 路 4k+ votes
      6y
      Originally posted by @Kyle Mccaw:

      @connie chan  

      We will have some major lay offs.

      Hopefully the clients I manage for will allow some flexibility in payments if it comes to that. Nobody likes vacant properties.

      Nobody likes vacant properties but worse is an occupied property that's not paying rent.   I want to give all the flexibility in the world but if it comes down to my having to pay my lenders (who I have a moral obligation to pay back as they put their trust in me with their capital), and my staff (who run my business, without them I'm dead), *OR* pay a tenants rent for them?  I'm paying my lenders and staff.

      The #1 advise I give investors:  Someone ALWAYS pays the rent on a property.  Either a renter or the owner.  So if you want to let the tenants not pay?  Cool -- good on you.  Just know that means you're paying their rent for them.   

    • Kyle MccawBusiness Member
      OP
      Property Manager 路 Keller, TX 路 Member since 2011 路 1k+ posts 路 1k+ votes
      6y

      @Cody L. I think you must have misunderstood me.

      I am paying my lenders and staff. My tenants will have to pay their rent.

      McCaw Property Management4.4905 Reviews
    • Rental Property Investor 路 San Diego, CA 路 Member since 2013 路 3k+ posts 路 4k+ votes
      6y
      Originally posted by @Kyle Mccaw:

      @Cody L. I think you must have misunderstood me.

      I am paying my lenders and staff. My tenants will have to pay their rent.

       I very well may have. I'm hearing the "well you don't want an empty unit do you?" as a reply to suggesting that if someone doesn't pay, they'll be evicted.  As if having someone living there and having the owner pay their rent for them is a better solution. 

    • Investor 路 Orlando, FL 路 Member since 2016 路 355 posts 路 380 votes
      6y

      So far I've had two of my tenants report they've been laid off and provided me with the written proof. In both cases, they're hourly workers for local sports arenas. Fortunately we've already arranged for a charity to pay the April rent for one of them. 

    • Rental Property Investor 路 Philadelphia, PA 路 Member since 2015 路 478 posts 路 362 votes
      6y

      @Kyle Mccaw  Any update on your region? How were collections for April?

    • Kyle MccawBusiness Member
      OP
      Property Manager 路 Keller, TX 路 Member since 2011 路 1k+ posts 路 1k+ votes
      6y

      @Sheryl Sitman 

      April rent was collected at the same pace as every month. We currently manage a little over 600 rental units. 4 tenants had a problem paying due to CoVi-19. We will work with them. Unemployment and stimulus checks should be enough to keep them afloat.

      McCaw Property Management4.4905 Reviews
    • Fort Worth, TX 路 Member since 2019 路 56 posts 路 19 votes
      6y

      @Kyle Mccaw these are really helpful insights and ideas. Moving forward now to September, have you seen or do you suggest any more changes?

    • Kyle MccawBusiness Member
      OP
      Property Manager 路 Keller, TX 路 Member since 2011 路 1k+ posts 路 1k+ votes
      6y

      @Travis Fairbairn be sure to focus on screen tenanting. Be sure to get a higher deposit to cover the higher risk of rental income loss. Overall COVID-19 has been a non-event for my office. Tenants pay there rent just like before. If there is a problem we help connect them to a program that will help cover rent.

      McCaw Property Management4.4905 Reviews
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