Given that its a matter of time before some or all of us will experience a late/missed rent, I wanted to go over the best strategy for dealing with tenants, that is reasonable, flexible, and allows for optimal rent collection. Yes, I think the government is putting the most of the financial burden on landlords. I am not looking for advice about having more reserves, or making better investments, just looking for great ideas on how to go about this rather delicate yet sensitive process of negotiating rent payments, while people are not getting paid.
Before I reached out to my PM, here are my initial thoughts:
Reach out to tenant ahead of time and encourage them to apply for unemployment immediately if they quality and/or let the PM know that they are experiencing hardship due to COVID-19. (All this is best to do through PM)
When tenant communicates hardship or missed rent date, show some due empathy and reassure them that we are in this together. Wave any late fees and ask if they can at least make a partial payment (say 50%) and the rest can be deferred for up to 3 months interest free. Otherwise, just defer the rent payment for 1-3 months (we probably want to do it 1 month at a time) and communicate to tenant that we will work out a payment plan with them once this is all over.
Three months later (or whatever) we touch base with the tenant. If they are getting paid, we try to work out a payment plan that is still interest free. In some cases I may even be able to wave 20%-30% of the accrued payment, as long as tenant commits and is comfortable with a payment plan.
If tenant is unable or unwilling to pay or negotiate, proceed with eviction and collect payments via collection agencies.
Just saw Brendon posted something similar, but better :) https://www.youtube.com/watch?v=1CLa0UJCn3w
Good advice, short and simple. Thanks
@Roman S. I found the video to be extremely helpful, thank you for sharing it with us.