I was speaking with my wife about this very issue this morning. We have not yet felt the effects of the hit our tenants will feel if they cannot or do not pay their rent. However, we have decided, and this is not for everyone, that we will require them to forfeit their deposits for the month they miss. If they miss again, we will evict.
Like you, we finance our properties and the banks are not going to allow us to miss paying our notes. It's a business transaction. Thus, we treat our tenants the same way: it's a business transaction. They have a place to live in exchange for paying their rent.
This is not a hard line, it is a real world line. We don't get to miss our house payment. We have saved for these possibilities. Once they make their lack of preparedness my problem, I will deal with it like its my problem. That may mean they are without a place to live, which is not my problem.
Others will disagree with me, but others are not paying my bills or paying for my properties. You need to do what is best for you.
Rental Property Investor · Red Bank, NJ · Member since 2017 · 1k+ posts · 1k+ votes
6y
I am prepared to ride it out and work with any of my tenants who find themselves unable to pay full rent.
I am very fortunate to have 2 small multi-families (4,5 units) so my risk is somewhat mitigated. I am also fortunate to have a majority of professionals who can telework. Nevertheless I am prepared financially to weather the coming tsunami.
I believe as respectable landlords (on this site), under the circumstances, whe are all morally prepared to work with tenants. I hope that everyone will be financially prepared.
With that being said- this is another time to re-evaluate your business relationship with your tenant. I suspect that those landlords who have a more personal relationship, buying Christmas presents and welcome baskets, will be the first to get phone calls from some tenants who may wish to forgo rent for another, less necessary bill. I stand ready to assist, but I don't want a tenant to believe that streaming subscriptions and bistro takeouts take priority.
Developer · New Brunswick, NJ · Member since 2015 · 1k+ posts · 2k+ votes
6y
We manage over 100 doors. Nothing yet but I am mentally preparing for it. I would need to see proof that they're unable to work and then potentially could work out a payment plan by tacking the owed rent on the back end split over several months, or just taking it out of the deposit that month. Like the OP said though, it's a business and the bank doesn't care that my tenant (or my clients tenants) can't pay their bills. That's why you are supposed to have savings (which 50% of the country doesn't have smh). I don't know how the state will say you can't evict but the bank will say, pay me.
Rental Property Investor · Brooklyn, NY · Member since 2016 · 71 posts · 35 votes
6y
They found a cheaper and quicker way of taking our properties by forcing many onto forclosure . Just read on TheRealDeal....NYC Statewide Evictiom Moratorium until further notice. Effective 3/16/20 Monday after 5pm. They went from 1 week time period to indefinate within 2 days. Hope the public is not hoarding For Sale signs.
Rental Property Investor · Littleton, CO · Member since 2014 · 150 posts · 114 votes
6y
I am with @Cassi Justiz on this. I have 4 tenants who are in service industries that could be affected by this madness. One contacted me yesterday, she is luckily not sick, and was proactive in applying to Grubhub, etc., as restaurants in the area haven't been shut yet and word is there will still be take-out. I told her we would work something out. I am not going to throw a good tenant out on the street over this, but obviously can't go months without rent payments. Replacement of a tenant is costly too.
The government just appropriated a boat load of money, why not give people whose jobs were shuttered rent assistance rather than sticking it to landlords, or using money for completely unrelated BS.
@Cassi Justiz Thank you for your response on this post. I am just starting to save up to be able to buy rental property and as a potential new landlord and someone who has been a renter for many years in LA, I want to create win/win situations for good tenants and also solid long term investments for myself. People are going to have a hard time paying rents if across the board their jobs are effected.
@Brian Boyd Invested in suburbs of New York City. Prices are overinflated now and looking elsewhere. It is more difficult than I thought to learn a new area but trying
As a side note, I believe it is not the filings that are stopped. Just the enforcement- as in physical putouts.
Investor · Carrollton, TX · Member since 2016 · 4 posts · 17 votes
6y
For those offering solutions of deferred rents and/or using deposit to reduce rents, could you share the documentation that you plan to use, especially if you've had it legally reviewed. Thank you.
Investor · Jasper GA · Member since 2015 · 1k+ posts · 1k+ votes
6y
Just saw a post on FB where a young woman wants to start a petition to have the GA Governor waive rent and mortgage payments for 2 months. We have created an entitlement society and will only get worse as time goes on.
I will be breaking ground on my first units next month and won't have renters until fall but I had always planned to have 3 months of backrent in my rental account to cover vacancies. I haven't seen anyone mention yet that they have a cushion that they can use to continue to pay the bank while you work out a deal with your renters.
Investor · Chattanooga, TN · Member since 2016 · 146 posts · 108 votes
6y
@Brian Boyd how will you evict when the courts are closed? I’m not sure about Nashville but in Hamilton and Bradley county General sessions court is closed for at least a month.
Specialist · Member since 2019 · 137 posts · 125 votes
6y
I've already reached out to my Congressmen and asked for them to come up with real-world solutions and use bail-out money to forgive mortgage and utility payments until the quarantine is lifted. France has done this for the country. Italy has done this.
Knowing full well the litigiousness of our society in times as my entire daily job is helping investors mask assets from vexatious lawsuits, get the right estate plans in order that fit their business, and operate under the correct structure, I am fully convinced that eviction will not stand right now and believe that despite it being technically legal civil courts will start to fill up with angry tenants who will point to their employed status pre-quarantine and payment history and accuse landlords of malicious and predatory practices, as well as, even lie driven by desperation accusing them of other serious misconduct.
If landlords do not have mortgage or utility payments due, this should ease for renters. Without that, we have millions of workers suddenly evicted & violence will ensue. You can't put this many healthy working people out of work & not expect them to go full metal jacket. They won't have it. This is not people who just don't want to pay rent, these are people that absolutely can't because the government has taken away their income-earning ability. This isn't the same as normal course of business and should not be treated as such.
I think that instead of digging in our heels to pretend this is no big deal or digging in our heels to panic - there is a median we should follow that should have us all push for a more innovative approach to this that helps us all. We can do it and we can demand it. Right now billions are in Grants to do things such as educate Guyana on clean water - the Grant program for overseas aid alone could be halted and all funds given and restarted after this. There ARE solutions, we have to demand them now and not lose our heads or our humanity.
@David Grabiner in court proceedings are closed until April 1 but that does not preclude telephonic hearings. The courts are already starting to prepare for these issues.
Stay safe out there and I’m happy to answer any questions that may help you out during this trying and difficult time.
Rental Property Investor · Easton, PA · Member since 2013 · 359 posts · 92 votes
6y
Also , Who is in Off campus - Student housing ?? With most school closing and going virtual and students going home , how many see their student tenants leaving ?
Ridgewood NJ · Member since 2018 · 21 posts · 19 votes
6y
Nc and Ohio are not doing evictions. Also courts are closed at most of the places so eviction won’t be possible. I will prefer my tenants to pay what they can preferably cover hoa, taxes and some payments but eviction would lead to them not making any payments at all and would also make me pay for the utilities. Hope we get through this phase soon.
Also , Who is in Off campus - Student housing ?? With most school closing and going virtual and students going home , how many see their student tenants leaving ?
We aren't completely student housing but have about 35 to 40% student tenants. I'm in downtown Atlanta and none of our students have told us they are leaving.
Rental Property Investor · Mc Kinney, TX · Member since 2013 · 50 posts · 50 votes
6y
I don't see how evictions can be prohibited if it's not accompanied by a hiatus on mortgage/interest/taxes as well. Private landlords aren't simply rolling in dough and have to maintain the properties as well as pay PITI every month. Multiply that responsibility by several units and then suggest that you can't remove tenant (at which point you're likely to have more than 1 not paying) and even a good cash buffer, like most of us regularly keep, is going to be gone fast if we have to toe the line and the renters do not.
Property manager for off campus housing in Austin, TX. Have seen lots of students leaving for their extended spring breaks. Well see if they will be returning since everything class related will be online after break.
Chicago, IL · Member since 2020 · 1 post · 15 votes
6y
Wow I can't believe people would actually evict people who live in apartments or rent houses, if they cannot find work due to the virus or if they get laid off from the job due to it. Yes it makes sense to use their security deposit for the month they cannot pay but at the end of the day if people cannot find a job due to the virus. Or if they find a job but still cannot pay rent at the level of living they were before you're going to evict them at a time like this??? That's messed up! Remember it could very easily happen to you I know at the end of the day it's a business and the banks don't care but I believe the government will back landlords up for this if you do not evict your tenants.
Our general plan is that we are continuing with late notices, late fees, and possible eviction filing as long as the government says that's OK.
For the tenants that are typically late I believe this is more of an excuse, but will treat everyone the same to avoid fair housing violations. If someone is already back on their rent though then this doesn't really apply to them (this is probably only 2 of over 100 tenants).
Our plan when a tenant reaches out about this is to get a letter from their employer verifying that they are indeed out of work. Temporarily we will proceed with imposing late fees and 10 day to quit notices, but will not file the eviction immediately. If a tenant provides a letter from their employer showing that they are indeed out of work we will ask them to immediately contact unemployment and assisted housing programs (we already sent a letter proactively of who to contact). IF they provide evidence of contacting housing assistance programs and a letter from their employer then we will allow them to pay as much as possible (suggesting half at least) and then putting them on a repayment plan for whatever else is owed. I plan to allow this to go on for one or two months and then if it's still not resolved we will unfortunately have to file for the eviction.
Crappy times because I suspect there are going to be a lot of good people displaced. I can afford to take a hit for a short time on this, but can't keep free rent going forever.
Rental Property Investor · Cleveland, MN · Member since 2017 · 518 posts · 354 votes
6y
I will not be evicting anyone. These people are already out of work due to no fault of their own, making them homeless will destroy any bit of normal life they have left. They are good, hard working people. I cannot be the final nail in their coffin. I'm hoping that the government will come through with the assistance they are promising for them. I realize that not everyone can do this, but I have a very large reserve for my building and am glad that I can.
Looks like, as I type this, the government is hoping to try and put a 6 month forbearance on mortgages and small business loans. That would help!