How has the pandemic changing how you select tenants?
We have one rental in Fort Collins, Colorado. Our tenants are moving out next month and I listed the property on Zillow rentals. We had 10 applications in the first two day, most people had credit scores over 700. Normally I would be thrilled but the pandemic has shifted how I view applicants. For instance, one applicant has a credit score over 700, no debt, but works in a restaurant. Several are assistant professors at CSU who depend on a stipend. CSU has gone to online classes for the summer AND fall, and I have heard rumblings that this will be very difficult on universities.
Are you doing anything differently to protect yourself? Are there questions that you are asking that you wouldn't normally? I don't usually verify employment or ask for pay stubs but this is something I might need to consider right now.
Grateful for any advice.
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We own Class B multifamily properties and our collections were 99.6% for April and we are on track to collect similar % for May. This proved tp me that Class B properties are the most resilient asset class amongst multifamily. In the last recession (2008), Class C were the cash cow.
IMO, that's because people who shouldn't have been granted mortgages, owned homes and lost them during the recession, and then moved to Class C apartments, which is what they could afford. That's why demand for Class C apartments rose. Class B were also doing (relatively) well.
Today, Class C were hit the hardest, since many tenants who are employed in the service industry (restaurants, hair salons, etc) are out of job, and cannot afford to pay rent. Class A is 2nd, while Class B collections are the highest (based on info I saw). I'm not sure why Class A is performing worse than Class B, but this is the reality today. Of course, it changes from market to market, but these are the general numbers.