Renters: What to Do If You're Worried You Can't Pay Rent

Those of you who are in a rental situation right now—meaning that you’re a tenant, you’ve got a landlord, and you’re trying to figure out what the next couple of months are going to look like in terms of making your rent—this one’s for you.

Maybe you’ve lost your job, or maybe you think you might. Your income has been dramatically affected by the coronavirus pandemic, and you’re just trying to figure out how you’re going to pay your rent.

Well, let’s talk about that because everybody’s freaked out right now. Investors are freaked out. Landlords are freaked out. Tenants obviously are in dire straits.

But here’s the great news: There are options. And so what I want to do is give you a four-step roadmap for navigating these challenging waters.

What to Do If You Can’t Make Rent Due to the Coronavirus Pandemic

1. Don’t Panic

The number one thing I would say to do is don’t panic. Educate yourself—there are some pretty awesome resources coming your way.

Here in the next three weeks—so by the third week of April—you should be receiving in the mail a stimulus check. Now, for those of you filing taxes individually, it’s $1,200. If you’re married filing jointly, it could be $2,400. And then if you have children under the age of 17 who are dependents, that’s an extra $500 per dependent.

So, for example, a family of five could see a $3,900 check sometime in the next three weeks.

There are some income limitations, however. If you make $99K individually, you may not be eligible. If you’re the head of house and you make $136,500 a year, you may not be eligible. Or if you’re married filing jointly and together you’re reporting over $198,000, you also might not be eligible.

But for the vast majority of people, I would imagine that you’re eligible for this upcoming stimulus check.

Here’s the other great thing: They’ve actually enhanced the unemployment benefits. So right now, let’s say you’re not working because of COVID-19. Maybe you’re in quarantine. Maybe your office has been shut down, or you’re caring for a loved one (and that includes kids). And because of that, you’re not at work. Maybe you’re not deriving income because of that.

Or maybe you have it—you have COVID-19, unfortunately—and you’re the one who’s sick or you’ve been to the hospital.

Right now, this CARE Act extends the amount of time that you can receive unemployment. It’s now up to 39 weeks.

You also, interestingly, get that first week of unemployment covered. Where before when you filed for unemployment, you’d have a week gap between the time your work stopped and the time that unemployment benefits started. You’ll get that week covered.

Here’s the other cool thing: You get an extra six hundred dollars a week toward your unemployment benefits. This is huge, folks.

So if you’re worried because you’ve lost your job and you didn’t think the unemployment benefits were going to cover what you needed, take another look. I think that this stimulus and these enhanced employee benefits/compensation packages could make the difference for you.

Plus, the federal government has actually extended the federal tax filing deadline to July 15th. If you’re in a panic because you didn’t have your taxes done here middle of April, take a deep breath. You’ve got through the middle of July 2020 to get those taxes finished.

Big picture here? This stimulus package is going to have a tremendous impact for a lot of us.

For those of you who are struggling right now—you’ve just lost your job, you’re not sure how you are going to make income, and you’re not sure how you’re going to pay rent—take a deep breath. Help is on the way.

2. Talk to Your Landlord

Here’s the second thing I would say that you should consider doing in regard to your landlord. Communicate with your landlord. Your landlord is just as worried about the situation as you are.

And the worst thing you can do is bury your head in the sand or just avoid your landlord. Your landlord needs to hear from you. And you want to hear from your landlord, as well!

I’ve had hundreds and hundreds of rentals over the years, have had lots of tenants, and have had a lot of really good relationships with my tenants over the years.

But the most challenging ones were the ones that I could never get a hold of. And when something went sideways, I didn’t hear from them, and I didn’t know what was going on.

I always say this to the folks that I work with: “Bad news never gets better with age.”

That make sense? Bad news never gets better with age.

You are much better off to pick up the phone and say, “Hey, Mr. or Mrs. Landlord, here’s the situation. Looks like I’m going to lose my job, or I haven’t worked for the last two weeks, so I haven’t received the income I would have expected to make rent.”

Just communicate with them. Tell them the situation. Your landlord—no matter what the news is—wants to hear from you. Then you can start working on a plan for what to do next.

3. Be Understanding

The number three thing I would say to do is just be understanding. Again, we are all in this together.

You, as a tenant, and your landlord—you’re in this together. Everybody is feeling the effects of everything shutting down.

And you know, right now, as we’re practicing social distancing, it’s tricky to get in and out of houses. So for your landlord even to get into your property and make necessary improvements or maintenance or repairs or whatever it is, be understanding that they may not be able to do that for the next month or two.

Related: Coronavirus Content & Resources

Got a leaky toilet and need it fixed? Planning to withhold paying rent until he fixes that? Just be understanding with your landlord. Your landlord is probably stressed out just like you’re stressed out. And now his handyman may not be working or may not agree to go into somebody’s house.

So when it comes to some of these deferred maintenance items, just sit tight on those for a month or two. Let’s get through this and then worry about some of those fixes.

4. Work Together

The last thing I would say to do is: let’s work together—landlord and tenant—to figure out how you’re going to get those payments.

Because here’s the deal. Your landlord might have more than just that one home. Maybe your landlord’s got 10 or 20 homes.

And guess what?

The bank is still going to expect your landlord to make those payments month in and month out. So if all 10 or 20 of those tenants in those houses decide they can’t pay their rent, guess what happens to the mortgages? They go into default.

The last thing you want is for your landlord to go into default and that house that you’re living in right now to get foreclosed on. So the best thing you can do is just work together.

Again, this is almost a team effort—a team effort to get the rent paid and in turn get that mortgage paid. S

So, what does that look like? You’ve got resources coming your way that I would just about bet can cover and get you through the next couple of months.

The Bottom Line

Call up your landlord, communicate, talk to them about what the situation is. Maybe you’re not going to have income for the next two months. But hey, in three weeks, I’m going to have the stimulus check. Maybe I’m about to file my tax return, and I’ve got money coming back from that.

Hey, I’m about to file unemployment benefits that look like they’re going to be a lot better than they would have been. And I can make payments now on the 15th of the month.

That way, maybe you’ve just pushed back or delayed when your rent payment is due. Or maybe I can have this month paid on the 15th. Next month I can be paid up by the 10th. And by the third month, I’m back on schedule again.

Again, for your landlord, all they care about is knowing that there is a plan that the two of you are working together to figure out.

At the end of the day, all of us are in this together. We all want to get through this as unscathed as possible.

Obviously, take your health and the protection of your family and your safety. Take that first. That’s hugely important.

But next, let’s all step up. We can’t duck our responsibilities. Let’s make sure that we’re educating ourselves. We’re communicating effectively, and that we’re working with our landlords to make sure that rents are being paid in as timely a manner as possible.

Hope that all of you get through this as unscathed as possible. God bless.

Have you come up with or heard about any creative ways of paying rent (if you’re a tenant) or ensuring you’re able to collect rent (as a landlord)?

Share in a comment below.

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.