With the COVID-19 crisis still looming over the world, landlords are having to deal with some frustrating issues including late or no rent from tenants and their own struggles to pay their mortgages. These problems aren’t going away anytime soon and might get worse before they get better.
In Houston, for example, nearly 25% of renters couldn’t pay July’s rent. Two months later, that number is even higher. Houston landlords are also struggling and are doing everything possible to cope with the inconveniences of the pandemic. A federal moratorium on evictions set to end in early 2021 means landlords have to wait out non-payment of rent and many know they’re not going to get paid when the moratorium is lifted.
Being a landlord is already hard. Being a landlord in the midst of a pandemic is outright challenging. Here’s what Houston landlords are doing to make their responsibilities easier.
1. Landlords are outsourcing duties to property managers
Landlords who are overwhelmed, but financially stable are turning to property management companies to handle their landlord duties. Landlords with multiple properties normally have a lot on their plate, but with the COVID-19 crisis, many struggle to manage their personal life and a property management company is their saving grace.
One of the biggest benefits landlords receive by hiring a property management company is getting help with maintenance and repairs. Even though we’re in the middle of a pandemic, landlords are still required to perform repairs in a timely manner. These repairs and maintenance must happen on their dime, whether their tenants are paying rent or not. Property management companies handle all of that so landlords don’t have to take on more stress.
2. Landlords are seeking financial assistance
However, landlords who receive government assistance from the current program are required to waive all late fees and interest, cannot evict tenants until after September 2020, and must work out a payment plan with tenants who are late with the rent.
3. Landlords are telling tenants about assistance programs
Some tenants don’t know what assistance programs are available, so landlords are helping out by telling tenants what’s available. When a tenant qualifies for rental assistance, the landlord also benefits, so landlords have every reason to make that extra effort.
Like many U.S. cities, Houston launched a $19 million rental assistance program designed to alleviate hardship caused by the COVID-19 crisis. Eligible residents will be approved for the program based on who needs assistance most. This is Houston’s second relief program – the first program granted renters up to $1,056 per month, but capped off at 8,000 people.
4. Landlords are working out payment arrangements with tenants
Many Houston landlords have decided to make payment arrangements with their tenants to pay back missed rent. Although making payment arrangements is a requirement for landlords receiving government assistance, other landlords are making this effort just the same.
5. Landlords are forgiving rent for short periods of time
Some Houston landlords are forgiving rent for some or all of their tenants. Those who are in a financial position to be able to forgive rent are happy to give tenants a free month or two. It may not be much in the long run, but for many renters, that can equal thousands of dollars they won’t have to pay back later.
For tenants who are lucky enough to find work, being gifted a free month will make it easier for them to catch up and stay caught up.
The plus for landlords is they may qualify for tax breaks for providing renters with rent relief.
6. Landlords are waiving late fees
While many are not required to waive late fees, some landlords are waiving late fees anyway. The point of a late fee isn’t to get rich, but to deter late payments. While the world is battling the pandemic, many renters will be late with the rent by no fault of their own. Landlords are recognizing this and are temporarily suspending late fees.
A renter who can’t pay the rent obviously can’t pay a late fee, either. The easiest thing for landlords to do is to forgive and drop late fees entirely until the pandemic is over.
More hard times are ahead
Hopefully more programs will be created to help both landlords and tenants get back to a stable financial situation. Until then, landlords should prepare to face an unknown period of time without rent.