Class C landlords - better build up some cash reserves

[Karen F.]

To any LLs who rent to people who are working class but pay their own, unsubsidized rent: be advised that you should build up some cash reserves.  New England Journal of Medicine just published a case report of the disease course of the first patient in the US diagnosed with coronavirus, and it's not pretty.  Take home message is that this is highly contagious, is contagious for several days before the patient is showing symptoms, that patients can be ill and NOT have fever for at least the first six days of illness, and that the blood test for coronavirus may very well not detect it, although apparently nasal and oral swabs do detect it.  What this means is that the measures used thus far to detect infection in people returning from China were inaccurate, and that there is a high likelihood that we are going to have coronavirus sweep across the nation in the same way that the Spanish influenza did in 1918, probably with a similar death rate of 1-2%.  People who are salaried will probably continue to be paid, and continue to pay their rent.  Section 8 will continue to make its payments, and their residents' rent portions will be adjusted accordingly if they cannot work.  But working class people will not be paid when the businesses they work for shut down temporarily, and since these people live paycheck to paycheck, they're not gonna be able to pay their rent.  I have a feeling that judges (and a higher authority, too) would not look kindly on LLs evicting because a tenant couldn't pay rent during a pandemic.

I would not be surprised if we, as LLs renting Class C housing, wind up holding the bag on as much as 6 months of unpaid rent, if this winds up going the way that China is going.  So make sure you have cash reserves to keep up and running as we go through this.