Virus' Impact- Notes from a PM

[Stephen Glover]

There's a lot of uncertainty right now as to how impactful this virus will be on our health and local economy. Our team studies property management on a local and national level for trends, variances, opportunities, and potential risks. We are seeing things happen other places that could happen in Richmond, VA as well. In an effort to provide some information for long term buy and hold investors to be more prepared, please see below:

Happening Nationally:

Tenants have refused to leave at the end of their lease siting uncertainty and high risk of virus.

Tenants (apparently even with strong renter history) are stating the virus has impacted their income and are not able to pay rent, are asking for lenience.

Vendors are less responsive to non-emergent maintenance due to fear of employees becoming sick.

Property Managers have chosen to be less responsive to non-urgent maintenance requests from tenants to keep their team safe, similar to vendors.

Showings have decreased or have been cancelled due to the fear of being in public buildings or other people’s homes, which might impact vacancy if this is longer term.

Occupied unit showings have ceased for the protection of the tenant in place, the showing agent, and the prospective tenant.

Some management offices are closing and requesting rent be paid in a different manner than visiting the office.

Occupied unit inspections have been paused, unless deemed emergent.

Be Prepared:

Think through how you will handle some of these situations in advance and write our a process for it.

Handle them consistently and do not favor one tenant over another.

Be proactive and prepared so you can act unemotionally and with fairness for all.

Be a Leader:

Now is the time to show your team (vendors and tenants) that you value their health as much as you do your own. You may not know what they, or their family member, are dealing with. As the leader of your team, prove that you have their back. They will remember that when this passes and treat you accordingly. Whether you believe this is a big deal or not, others may feel differently.

This is an unprecedented situation, and it is more important than ever to create mutually beneficial arrangements between tenant and landlord. Think outside the box, and be courteous. There is a need to create a win-win for all parties involved, and the landlord or manager needs to be a leader in a situation like this.

Whether you self-manage or use a professional manager, communicate with your team and others in your community to find creative solutions to keep moving in the right direction.  This is a learning experience for many, and we can do better when working together.

Stay safe!

[Stephen Glover]

Things are changing rapidly.

There seem to be two camps for landlords/PM strategy:

Camp A: Proactively reach out to tenants with new policies and procedures to include eliminating late fees or payment plans, etc.

Camp B: Collect more information as things are changing. Make minor decisions to stay on course. Make larger decisions when things settle.

My company is in "Camp B.” I am choosing NOT to proactively reach out to tenants regarding rent and late fees as we expect them to pay. The situation is too fluid to implement new policies. I’m expecting this to be a marathon, not a sprint.

**If you send written notice implementing new policy, then something changes and you no longer need or want to have that policy, you could be heading for a lot of headache trying to change policy again.  Be patient.

We are choosing to communicate appropriately with tenants as they contact us. In short, we are letting them know that this is unprecedented and to bear with us as we learn more about the situation. We are showing empathy and that we do care for their concerns.

Our team has also sent notices to all tenants, both commercial and residential, with CDC guidelines and recommendations to reduce our clients' liability. For our multifamily assets and commercial assets, we have doubled our cleaning frequency and focus.

While we do expect rent payment, we also expect there may be some sort of leniency if payment is not made. This could be in the form of no late fees or payment plans, but we are choosing not to advertise any options to our tenants in advance. I have a feeling the government may mandate what we are allowed to do, or not do, in this scenario over the next week. Something to keep our eyes on.

Once April 1st arrives, we will see what percentage of payment isn’t made and tackle it from there.

Stay consistent across the board with policies in order to follow Fair Housing law. This is for your protection.

Other minor updates:

My PM company is not doing occupied unit showings. We are implementing code box and/or virtual showings on some vacant units.

Our maintenance team is not entering units unless there is an emergency or safety issue, or an issue that could worsen if not remedied. Occupied inspections are postponed.

In Richmond, courts are closed and evictions may come to a stop temporarily. Our evictions already planned are still scheduled, however I expect this will change.

Our office is working remotely.  All staff is still actively working and engaged.

We expect more mandates, rulings, and new policies throughout the next week as we approach the first of April.