The multifamily industry is neck-deep in uncertain waters. Commercial real estate’s property management sector is faced with a challenge unlike anything the market has ever seen – let alone dared to expect.
As a result of lockdowns, the multifamily arena is in a climate where rent collection issues are rampant and evictions are banned. While this is a needed safeguard to protect tenants and families during a difficult time, it’s not helping the one who receives that payment as income.
Unfortunately for multifamily building and unit owners, there’s no clear end to this in sight.
This is exacerbating the stress for investors, property owners, and landlords. How are they supposed to meet their bottom line when their rental returns are being seriously cut into?
Here are several things to consider about this sticky situation:
Unemployment is Still Climbing
As long as unemployment rates continue to rise, the leniency policies on bills won’t be lifted anytime soon. This provides a pretty solid gauge for affected landlords and property owners to know what’s on the horizon.
Keeping an eye on the national employment rates and other economic indicators should provide you with some insight into the latest developments involving rent collection policies.
Be Flexible with Payment Plans
You don’t need to be cut-and-dry with your tenants. Open up the conversation and see where you can possibly meet in the middle.
Don’t let the rent go by unpaid and undiscussed – reach out to your tenants regarding their situation and see what you can swing. Maybe a payment plan can be agreed upon where tenants pay a portion of the rent. Any help here will help your bottom line.
The largest concern for landlords and property owners is how these policies can impact their ability to make mortgage payments.
If you foresee yourself entering into unsure territories, talk to your mortgage company before things get bad. Reach out and see if any loan deferral programs may help your situation.
Know the In’s and Out’s
While there are anti-eviction clauses currently in place, that doesn’t mean landlords need to put up with abuse. There are certain scenarios where evictions are possible – even right now.
In the event of property damage, criminal activities, or if a tenant is putting other residents in danger, evictions may be permitted.
Check-in with your local standards to confirm, but most states offer these kinds of options to protect landlords and their properties.
Encourage Tenants to Explore Relief Funds
If your tenants are having trouble paying their rent for months, it may be a good idea to talk to them about relief programs – just make sure you approach the subject gently. Be kind, open, and helpful, never insensitive or cold. There are tons of government aid projects, such as the CARES Act, as well as private foundations that are helping people who have been economically impacted by the pandemic.
If they get help paying their bills, it helps property owners balance their returns.
There Are People On Your Side
Even if it’s from a distance, know that landlords and property owners are being property represented on a large scale. Groups like the NMHC and National Apartments Association are striving to get aid outreached to landlords, not just tenants.
Keeping these 5 points in mind provides some simple action-steps to help hold things together until things balance out again.