LaPlante's response to COVID-19, collecting rent during crisis

[Andrew Fidler]

Click to link to our latest email to Owners & Tenants

Hey BP, happy April...if your weeks have been like mine then I'm sure you have had little time for organized responses and even less for productive posts on Bigger Pockets.

In the interest of helping everyone by sharing our template for managing properties, above is the link to our latest video cast to both our owners and tenants - this is a really difficult challenge for a property management company because we have opposing needs, collecting rent at a time when increasingly tenants are out of work.

The situation is exacerbated with Ohio's delays in processing unemployment (we have flooded a filing system that uses decades old software with an annual equivalent of applications within a month's time - Article) and increasingly stringent containment measures keeping more people at home unable to work.

I recommend everyone attend the 2pm updates by our Ohio Governor - Mike DeWine, this has been instrumental in helping our organization understand the best control measures and the latest efforts to control the virus. 

This past week Landlords were asked to defer rent for 90 days (Article Here).

LaPlante Real Estate's approach has evolved organically as we were contacted by tenants since the virus layoffs began in March, we have a simple application process to document loss or reduction of income and with the recent economic shutdown lasting as much as 90 days have created a two option process for assisting tenants with their rent:

1. 1) Rent Deferment: Tenants who have major losses in income can have their rent deferred until this crisis ends and generate a payment plan at the end (a lease renewal will be required to commit the tenant to rent during that period). Each case is individual but the goal is to collect 50% of the rent and defer 50% so some income is coming through to help owners while respecting the situation the tenant is facing.
2. 2) Rent Credit: Tenants who have a documented loss or reduction of income yet still prioritize paying their entire rent amount shall be credited 20% of the total on their next month's statement...the goal is to keep rent collection high for owners through a reasonable incentive program.

I hope our approach is something others can use to help their tenants during this difficult time, please post if you have had success with alternative programs!

What can owner do?

1. 1) I recommend everyone with rental properties consider the SBA loan program that is being rolled out...Article...just be ready for a long delay similar to filing unemployment. My bank notified me that as of noon Friday (the first day of the start of the program) that branch had submitted over 500 applications for clients.
2. 2) Contact your creditors for mortgage or other debt deferment options.

This is a global challenge, according to the medical community we aren't through the worst of it yet. (Oh and buy real estate! The market is dying for offers, I've purchased a few myself in the past month...we all know that real estate is a sound investment, stay the course and don't let fear prevent you from remaining stalwart in achieving your goals!)

#weareallinthistogether

#InvestInToledo

#LaPlanteRealEstate