Landlords... Stop being so hard on your tenants

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Landlords... Stop being so hard on your tenants

Account Closed
Investor · United States · Member since 2018 · 565 posts · 356 votes

I've been reading through the forums here and I've read a lot of posts about how the tenants should have the money saved up to pay rent in an emergency, and if not they should use a credit card or the money in their retirement account to pay rent.

Yes, they signed a contract to pay a certain dollar amount for a certain period of time but no one saw this disaster coming.

Instead of forcing them into debt or draining their retirement accounts why don't you just let them leave. Let them break the lease and go live with family or friends. Or you can give them a lower dollar amount to pay for the next 90 days.

The truth is that you should have adequate reserves for situations like this as a "professional investor". Try to have some compassion for the average person who makes very little money compared to you and probably lives paycheck to paycheck.

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

Landlords also have bills and some of them may have lost their jobs.  Just because they own a home (many have mortgages) doesn't mean they are rolling in money.  Tenants need to pay what they can (ie they can't pay nothing) and work out a payment plan for any shortages with the landlord.

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    6y
    Originally posted by @Jason Hawrylo:

    I am happy and feel lucky to help my tenants out if they need it but let’s get everyone involved. Grocery stores can give everyone a break on groceries, banks can give us a break on our mortgages, drug companies can give people a break on their prescriptions... will it ever come to this?

    unless your mortgage is a portfolio loan banks DONT own mortgages they sell them to wall st who creates MBS and then you have servicers and so on and so forth.. its not as simple as the bank will do this or that.. it can be .. but not if they have been packaged up and sold

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    1Reply
  • Sid K.
    Investor · NY · Member since 2017 · 23 posts · 24 votes
    6y
    Originally posted by @Sid K.:

    This is an unprecedented health and financial situation , so we are being flexible and trying to be a part of the solutions :

    • 1) If our tenants alert us to their inability to pay rents - we are being compassionate and listening.
    • 2) We are asking for little more background on their situation ( Lost job ? sick ? someone in the family sick ?)
    • 3) If we think there are genuine reasons , we are offering a combination ( not all) of the following options
    • .   3.a) Waive late fees
    • .   3.b) Adjust their security deposit for the next months rent
    • .   3.c) Offer flexible termination of the lease, if they want to vacate and move with family
    •     3.d) Offer them additional 30 days to pay current rent.
    •     3.e) Issue a notice to them that is empathetic to their situation , but also puts the eviction process rolling so it         can be executed once we we want and are legally able to.
    • 4) If we believe that they are taking unfair advantage of the situation and not paying rent ( They still have their job , no sickness etc) - we are providing them a notice to intent to evict as soon as we are legally able to.

    Welcome thoughts on anything we can do different.

    Thanks

    0Reply
  • Sid K.
    Investor · NY · Member since 2017 · 23 posts · 24 votes
    6y

    One more thing . If our tenants cannot pay rent right away ,we are being open to and also encouraging them to pay via credit card. Obviously chargebacks sometimes becomes an issue in that case , so we are having them sign a confirmation that this is indeed a valid transaction.

    0Reply
  • Jason Hawrylo
    78758 · Member since 2020 · 18 posts · 9 votes
    6y

    @Jay Hinrichs

    Wouldn’t the government have some control over Fannie and Freddie MBS’s? Not entirely sure how that works...

    0Reply
  • Maya Torres
    Rental Property Investor · Norfolk, VA · Member since 2017 · 142 posts · 76 votes
    6y

    @Jason Allen I agree with you 100%. Why? Because you’re not saying give your tenants a break and let them live rent free. You’re basically saying, work with them if possible whatever it looks like. Don’t jump down their throats because they don’t have extra savings. Don’t force them into debt. If it means letting them break their lease early so they can go live with relatives, let them do that. But people manipulate and twist these words so much it’s ridiculous. They wanna pounce on you the moment you say anything of the sort. I personally am so SICK of the grocery stores and banks comparisons. It doesn’t have to be all that dramatic. We are landlords. We operate how we operate. We don’t have to compare ourselves to grocery stores and banks. I’m sure people that are going to the grocery stores have to decide between steak and ramen at this point anyway. Figure out a way to work with a deserving tenant (no not letting them live rent free) and still get your mortgages paid. Simple. We’re all affected by this in some way. Let’s ride the wave together and lessen the sting as much as possible.

    1Reply
  • Account Closed
    Rental Property Investor · Las Vegas, NV · Member since 2018 · 133 posts · 171 votes
    6y

    I think it's wrong to label landlords as either uncaring greedy tyrants, or emotionally needy pushovers - business is business and each of us needs to do what we need to do to ensure our own survival.  And that's going to be different for everyone.

    I only have two rentals so I am in a position to discount rents for 2-3 month or longer if needed, without having much of a financial impact.  And I am willing to do that because both tenants have proven themselves reliable/responsible tenants for 2-3 years so I would rather keep them for now.  But someone who has 40 rentals with lots of debt may not have that option.  If they need to put more pressure on their tenants to pay up then I do, then that's what they need to do.  And there's no point in blaming the landlord, saying they weren't prepared, over leveraged, etc, since the same could be said about the tenants. 

    Really, all the matters is your ability to play the hand of cards that you've been dealt and are in front of you at this moment.  Whether you're a jerk or not is pretty much irrelevant when it comes to who stays in the game or who folds.  That's the law of the jungle....

    3Reply
  • Daniel Schiller
    Rental Property Investor · Houston, TX · Member since 2014 · 91 posts · 76 votes
    6y

    @Mark F. Yes, this. Allowing rent deferrals while demanding debt service is on par with the California energy crisis that Enron capitalized on exponentially. You can’t arbitrarily regulate parts of a vertical business stream.

    0Reply
  • Tim Gambone
    Member since 2020 · 6 posts · 4 votes
    6y

    I haven't read all the posts you may be referring to but I don't think many landlords have an argument when it comes to a tenant leaving who isn't paying rent. My opinion is...then leave! I'm ok with that. Undoubtedly when a non-paying tenant vacates, there will be less expense for repairs/maintenance, water, trash, etc., depending on the individual property or situation. I'm sure there are probably plenty of landlords complaining who do, in fact, have adequate cash reserves to assist for a short-term. The cash reserves for landlords is not the point! 

    I believe the concern here is that the situation will turn into a long-term expectation where people (i.e., tenants) feel entitled to a hand-out. Landlording is a people-business and the relationship is reciprocal. Perhaps some do it to help provide people with decent living environments, while simultaneously making a satisfactory living themselves. In some ways, this is no different than a doctor, attorney, social worker, first responder, educator, etc. Landlords should be providing a decent home for the tenants (just like doctors provide things to their patients). A service is provided and there's a fee for that service. 

    If you've ever had significant medical issues or needed the services of an attorney, then you probably realize payment is part of the equation, period. The amount owed does not go away. There are ways it can be mitigated. But payment is the bottom line. 

    I'm prepared to help as much as I can. But there's a limit to a tenant needing help and having that request turn into an entitlement! I suspect that's what most landlords are concerned about. Again, to be clear, if a resident in one of my buildings is not prepared to help me help them, and their idea of help becomes an entitlement, I'm absolutely fine with them leaving. I  will open the door and help them out! 

    1Reply
  • Tim Gambone
    Member since 2020 · 6 posts · 4 votes
    6y

    Jason, 

    Based on your last sentence, I think you're making an assumption that landlords are wealthier than the tenants who rent their buildings. This may not always be the case. People frequently make the assumption that when you own property, you're "rich" (for lack of a better way to put it). The same assumption is made about business owners. People can be incredibly ignorant. In order to understand each persons position, you have to walk their path.

    I have been a tenant at the same time I was a landlord. I may be a tenant again at some point. I have had tenants who don't live month-to-month and may, in fact, have a fair amount of money. I've had tenants that own property and are business owners. I've had tenants that are tenured university professors and make a good living. I've also had those that are probably less well-off. Each situation is different. 

    But the assumption that landlords, property owners or business owners are the "haves" and the tenants are the "have nots" is an assumption that exacerbates and complicates circumstances just like what we face now with COVID. 

    3Reply
  • David Dachtera
    Rental Property Investor · Rockford, IL · Member since 2014 · 4k+ posts · 2k+ votes
    6y

    This was posted to Facebook today. It's a graphic. So, I can't just copy and paste the text ...

    Not finding an option to make it bigger, sorry. Click on it to make it "full-screen".

    Hope some find this useful ...

    2Reply
  • Joyce Williams
    Rental Property Investor · NY · Member since 2020 · 118 posts · 54 votes
    6y

    @Jason Allen, what about a tenant that has been consistently late since November. He never communicates about being late, I always have to reach out to him way after rent is due to ask when he’s going to pay his rent his response is always, “oh it slipped my mind”. He owes hundreds of dollars in lates for for January, February and now March and he paid partial rent on March 25 after I reached out to him about him paying his rent. When I reached out to him about the remainder of the March rent he told me, “as soon as I get it, my job closed down.” I reminded him that he’s been consistently late since November and that the corona virus wasn’t a major issue until way after his March rent was already past due.. I should have compassion and be sympathetic to him as well?

    0Reply
  • James Wise
    Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 31k+ posts · 20k+ votes
    6y
    Originally posted by @David Dachtera:

    This was posted to Facebook today. It's a graphic. So, I can't just copy and paste the text ...

    Not finding an option to make it bigger, sorry. Click on it to make it "full-screen".

    Hope some find this useful ...

    Ehhh, bleeding hearts write stuff like this and say things like this all the time. The opinion of the person who wrote that is irrelevant.

    1Reply
  • Account Closed
    Member since 2020 · 4 posts · 3 votes
    6y
    Originally posted by @Account Closed:

    I've been reading through the forums here and I've read a lot of posts about how the tenants should have the money saved up to pay rent in an emergency, and if not they should use a credit card or the money in their retirement account to pay rent.

    Yes, they signed a contract to pay a certain dollar amount for a certain period of time but no one saw this disaster coming.

    Instead of forcing them into debt or draining their retirement accounts why don't you just let them leave. Let them break the lease and go live with family or friends. Or you can give them a lower dollar amount to pay for the next 90 days.

    The truth is that you should have adequate reserves for situations like this as a "professional investor". Try to have some compassion for the average person who makes very little money compared to you and probably lives paycheck to paycheck.

    I COMPLETELY AGREE. 

    We manage an apartment complex here in Midvale, Utah and it's quite impressive that we have only one of 20 units that's late. The owner wants us to give them a break and I'm happy to do so, as she was already late for the last month's rent. She's currently in debt with us now 2,000 plus. It's sad to see and it's great that he's willing to let it settle. I will advocate that he should give her a break to move on without the term fee and just get somebody else who can afford it to move in. 

    Thank you for the great post. 

    1Reply
  • Mike HurneyPro Member
    Real Estate Investor · Boston, MA · Member since 2009 · 2k+ posts · 542 votes
    6y

    @Jason Allen - "Mike,

    Yes I have Airbnb listings using rental arbitrage.

    I also own commercial multifamily, and more than that to be honest."

    Hard to believe, what are the addresses of all these properties?

    Mike

    0Reply
  • Account Closed
    Member since 2020 · 4 posts · 3 votes
    6y
    Originally posted by @Charles Carillo:

    @Account Closed

    We have had a couple tenants vacate and we are now re-renting them. I would rather have someone leave and leave the apartment clean then stay in it for months with no rent and no chance of eviction. Accepting partial payments over the next few months is also going to be a new thing to some landlords that have never been through a pullback. 

    I agree with you there. I personally would hope that the tenant we have that's late on rent from before this happened would rather just move in with family than stay and not pay. Though it's not my property, it's aggravating to see somebody get a free ride when others are working hard to pay it off. The owner isn't too worried about it so I guess I shouldn't be either. Thank you for sharing your thoughts. 

    Do you own multi family properties and single family homes?

    0Reply
  • Colleen F.Pro Member
    Investor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes
    6y

    @David Dachtera  that statement could be a whole post on its own in so many ways.  I especially like "I still rely on income from my rentals....   If your income is affected by the crisis you should try to apply for government assistance."     I haven't yet seen that assistance program. 

    I won't comment on the original post but the strategies landlords use need to consider that the courts are essentially closed for the duration not just to help people  financially but mainly because they are vectors for spread of COVID-19. When they open who knows?

    0Reply
  • David Dachtera
    Rental Property Investor · Rockford, IL · Member since 2014 · 4k+ posts · 2k+ votes
    6y
    Originally posted by @James Wise:
    Originally posted by @David Dachtera:

    This was posted to Facebook today. It's a graphic. So, I can't just copy and paste the text ...

    Not finding an option to make it bigger, sorry. Click on it to make it "full-screen".

    Hope some find this useful ...

    Ehhh, bleeding hearts write stuff like this and say things like this all the time. The opinion of the person who wrote that is irrelevant.

    Another person's opinion may differ from yours. 

    0Reply
  • Brian LucierPro Member
    Property Manager · Fitchburg, MA · Member since 2012 · 148 posts · 201 votes
    6y

    Hello BP Peeps. A little mercy here, please. I know I will probably get torched for my comments, and that's ok. There are a lot of people out there afraid, in locking down into survival mode.

    We are property owners too, and yes, there is still blood in our veins because we are still human.
    Bad things happen to good people ALL of the time. THIS, is one of those BAD times.

    In Massachusetts we have new legislature where if you try to evict or even do a Summary Process for someone under hardship because of COVID19, you will see a $5,000 fine, jail time, or both. So the good news is that while we cannot evict, the banks cannot foreclosure either. So we are at impasse as to where this is going to land, and who, will ultimately be responsible.

    I know, I know, RESERVES!!! I get it, "you gotta have reserves"! Those who have them will whether this storm and probably end up owning your property if you yourself do not have reserves. Remember that little disclaimer you have heard so so many times when you started your investing journey?

    "Investing is RISKY and you could lose ALL of your money!"

    The world is not going to stop within the next 24 hours (Please God), so let's all just take this down a notch and appreciate being able to breathe. I do not want to share or spread any of the doom and gloom. I am more of a "cup full" type. Let's face it. WE HAVE INVESTMENT PROPERTIES. THERE IS RISK. For better or worse, we will make out great in the end. Even if we lose everything now, we have the knowledge to rebuild it all up all over again in time.

    I have heard it said, and said it myself several times. If someone were to break in to my home, steal ALL my stuff; my cars, trucks, art collections, flat screen TVs, laptops, computers, gadgets and devices of all shapes and sizes - they would probably NOT TOUCH the scores of books, audio programs, and training packages and programs we have purchased over the years to make all of this possible.

    So here is where we are as property owners/property managers.

    Yes, we have residents calling us now offering to pay what they can. I am delighted with this! They could be telling us to "Take a Hike" and play the system. These are good people. No one asked for this to happen. Not them, and not us. We have always taken the position to treat our residents like our dear, sweet, grandma. Right now, our residents truly appreciate that we are being compassionate and understanding. They know we are in the same tough times too. But in reality, dollars and cents, probably not as bad as they are.

    Have some compassion. No, I do not want you to lose your properties, your business, or your rents. But all of those are just "things". Treating your people right when things suck will go a long way in building loyalty, trust, and relationships.

    If you have listened to the end of the BP RE Podcast, then you already know.

    Real Estate is a relationship business.

    What you do now, and how you handle your own situation will define you and who you are days, weeks, months, and even years after this is all history. If you are at all able, try to help those around you.

    Yes, I am concerned about what will happen in the economy, and I would only be speculating to offer any opinion. But wow! What if it were my own sweet, dear children suffering under loss of jobs, income, health, loved ones, or worse? Is this really the time to be covering my own butt to make sure "I get mine"?

    Part of our story of being Real Estate investors is to one day be in a position to start giving back. 

    Probably not the way we planned to do this, but wouldn't today be a great day instead of asking "What can I get today?", to start asking the question "What can I do today?"

    1Reply
  • Karen Mills
    Member since 2019 · 11 posts · 3 votes
    6y

    In ~ 2008 thousands of foreclosed homes were bought up by large corporations that have $$$ to buy off politicians. They have the money to buy off politicians who then legislate the non-elites out of their homes through foreclosures (ie Blackstone). I believe this kind of legislation has nefarious intentions-so to read others sanctimoniously write about how we need to do our part for the greater good demonstrates ignorance about the growing corruption which leads to money/property going out of the hands of small LL, the lower classes (ie not upper 1%) and into their wallets of the elite, particularly over the last 30 years.  One day we will all be renting from Blackstone with this kind of legislation.  I for one am in a good position with my renters, (I hope) as I only have 3 properties, 2 occupied by retirees (probably better of than myself, and I don't think likely abuse the system) and another younger couple who if they tell me they have lost their jobs they can come work for me.  But being upset with these kinds of moves is not whining- it's a reaction to how our country is becoming increasingly controlled by corporations that do not have anything but their bottom line as a goal.  Remember trillions of dollars are being used to bail out big corporations, but many small investor will get, not accidentally,  squashed. 

    1Reply
  • Joyce Williams
    Rental Property Investor · NY · Member since 2020 · 118 posts · 54 votes
    6y

    @Karen Mills........very well said. Thank you.

    1Reply
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