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Updated over 4 years ago, 05/01/2020
Any landlords forgiving rents during COVID?
I know that a lot of landlords are suffering right now. Much has been made of the struggles of tenants facing financial hardship and many landlords have been placed at the mercy of the now-exhausted small business relief funding or forced to renegotiate with their mortgage companies independently when rent payments have come up short. However, some landlords do own their properties outright. For those who are able, I'm wondering if anyone has decided to extend their own version of relief to tenants and forgive rents temporarily for those who are struggling. No judgement either way. Just curious. I know there are some incredibly generous people out there. Nice to hear about the good they are trying to do.
@Kriston Johnson I hear you 100%!
All but one tenant paid their April's rent in full. The one (long-termed) tenant, paid a partial payment 2 weeks late and told me she'd pay the remaining balance by the end of the month. When I reached out to her to inquiry payment, she preceeded to tell me she's sick and is now waiting on her unemployment to kick in. I feel as though, she's totally using the system to her advantage and soon as the township opens back up, I will be filing eviction papers on her.
I spoke to one of the management companies today and they are finding a lot of resources to help the tenants pay. The are a fair # of churches and agencies (United Way is one) that are getting gov't $ to help tenants. The tenant still has to make a good faith effort to pay a portion but the majority of it is then paid to the PM company by the agency. This has helped April quite a bit but it remains to be seen how May will go.
@Peter Johnson the people Im talking about can’t stay home with the kid. Hence the daycare. I don’t think anyone is fishing for your sympathy. People are just doing the best they can.
I own 5 doors outright, no debt or mortgage. As of right this moment i got 3/5 paid. One i honestly don't expect to get rent from. Great tenant for going on five years, but the last few months have been nothing but late rent, lack of communication and when she does talk, it's very stilted and formal. I can't prove it but i know she's "recording" text conversations. Not sure if i want to keep letting her pay rent/try to get caught up and evict, or just let her lease expire and not renew later in the year.
The last told me in advance that his work was considered non essential(he sells carpet/flooring) and that he was going to late. 100% sure that he will get caught up once things clear up.
I'm not forgiving payments, but to anyone who asked me about it, i said "get me what you can, when you can, and make a solid effort at getting caught up once things smooth out a bit"
Maybe i'm being generous, or naive, i don't know.
I just have one property with no mortgage so I’m in a very lucky position. Our tenant is the daughter of a family friend who does a lot of electrical work on various projects we do. Her husband lost his job about 2 weeks ago and then they lost their baby due to complications at time of birth a couple days after that.
Again, because of the extremely lucky position of not having a mortgage on the house, we decided to forgive May and June rent payments to hopefully help them get ahead of the mess. I can’t imagine the difficult decisions and conversations I would have had to made if there was a mortgage on the home.
I do kick myself a bit for not doing sometime if exchange though. Forgive the rent, but they take care of the yard instead of us hiring a crew for upkeep.
It’s probably too late now, but anything you would have done differently?
@Erin Dorsey Robinson
I was asked for this and proposed few rents smaller but all remaining balance to be paid till end of the year.
50% off on taxes? 50% off church donations? any politicians offering to work for free?
are your property taxes 50% less?
you are truly deluded if you think more than a small handful of people are inclined or even capable of appreciating or reciprocating your gestures!
Real estate investing isn't get rich quick. It's get rich for sure. Marathon, not sprint and all those other cliche's. You have to conduct your business like a business and so I understand those who take a hard line against any rent abatement, but I know that my biggest expenses are turnover and vacancy. If I can make some concessions and keep an otherwise great resident, I will.
Personally, I had the management company reach out to all of our residents in an effort to get them to put their hand up if they anticipated any difficulties making rent. I have several renovations at the current time, and so we offered them temporary work while they were out of work. Across 63 doors, we only had 3 people put their hands up for April and one came to work alongside us. May is a different and, as yet, unknown story, but that level of compromise has worked for me.
We just received April AND May rent from one of our tenants. That leaves 4 yet that haven't paid April. One had made a partial (less than half) and I'm confident we'll eventually get the rest because we've butted heads with them before and they know if they don't pay they don't stay. I have two properties I'm concerned about due to no history but the rents are fairly insignificant. Right now we've received 72% of our normal rental income. We've had a turnover in April too but do have a tenant now for that property.
So far this has not been an issue but if I was asked I probably would agree to it.
Originally posted by @Steve Shaffer:
Personally, I had the management company reach out to all of our residents in an effort to get them to put their hand up if they anticipated any difficulties making rent. I have several renovations at the current time, and so we offered them temporary work while they were out of work. Across 63 doors, we only had 3 people put their hands up for April and one came to work alongside us. May is a different and, as yet, unknown story, but that level of compromise has worked for me.
Did you offer them a credit towards rent in exchange for work or just payment for work?
@Erin Dorsey Robinson Not at this time.
@Erin Dorsey Robinson. I have a couple of tenants who have lost income and basically have cut their rent by 50% or more in exchange for an extended lease. I am getting enough to cover my expenses for the most part from those tenants who can’t pay the full amount, unemployment is kicking in and the stimulus checks should get there soon. I will not evict anyone who has lost income and don’t really expect them to repay what they can’t pay now as long as an effort is made to pay partial rent I will be OK. I prefer to keep the tenants than have empty units.
@Erin Dorsey Robinson we are not. We will of course work with our tenants. Right now most of our tenants that have lost their jobs are actually taking home more money on unemployment.
Luckily so far we have seen a 92% collection rate in April but I am very worried about May. In Massachusetts they just enacted that we can not file any evictions till 45 days after the emergency is lifted. I think May is going to be bumpy. Time will tell.
@John Teachout, I have a 4plex in Atlanta only one tenant work with me by paying rent the others dont even want to answer my phone calls or email. All but one of thses Tennants are mth to mth. Any idea how to evict these tenants? I tried work with my tenants but only the ones in Orlando call me back. I was able to work out a reduce payment.
One tenant, 1/2 rent one month, other tenant, one of the roommates had already used his unemployment up before COVID, so no unemployment, 1/2 rent for two months. He will move out in May if he can't pay June.
@Erin Dorsey Robinson
One thing I just want to add to this conversation is that I know a lot of us know that people are getting unemployment plus $600 extra from the government, but please let’s not forget all the people who have yet to receive their first unemployment check. I work for MGM Corporation for my regular job for now until I can go to real estate full-time, over half of the employees at MGM have not received unemployment yet and we have been out of work for over a month. The system is so backlogged that so many people haven’t even received their unemployment card so I would not be surprised if they missed April and May rent and were struggling to get by... 
@Erin Dorsey Robinson
I have 9 rentals in Las Vegas, so far 4 tenants have asked for discounts which I was happy to give. My only issue is that two of these tenants are playing hardball now. They made a small partial payment and aren’t communicating at this point. Also one of them isn’t keeping up with their yard like they’re supposed to (pulling weeds and such). We have our hands tied in vegas in the sense that we can’t even give out notices. I’m always understanding and willing to work with tenants but its hard when they start acting this way.
My plan is to terminate their lease as soon as the moratorium is lifted (they are on month to month) and not rent to a service industry person, even if I have to drop the rent a bit, in case we get a second wave in the Fall. I’m also planing to ask future tenants wether they asked for rental forbearance during this period and if so, get the details from their previous landlord if possible.
of course be pragmatic and consider turnover cost, and don't be penny smart and dollar foolish....but don't just start willy nilly handing out blanket discounts....you need the capable ones to cover the incapable, and if you start blatantly discounting across the board, why wouldn't you reward the good payers too?
lastly, I can tell you from direct personal experience, the majority of your tenants would be totally OK with making you bankrupt and homeless for the amount of 6-12 months rent, some might even feel bad, but still take the money, and a few would get a sadistic pleasure from it. Of course, this is more accurate with more total tenants. For those withe less than 10 units, you may actually be loved and cherished for your kind benevolent ways! Heck you may even get a Xmas card!
Good luck!
@Amanda Sontag I think you have given a good example of how generosity can be good business. Changing tenants is also not without costs or risk although it is sometimes necessary.
@Isaac S. I think you're right. Most people aren't going to reciprocate a gesture like this and maybe couldn't if they wanted to. I also think that this is why giving for its own sake is optimal- it allows the giver satisfaction that is not contingent on what they receive in return. Everyone just has to do what they feel led to do and hopefully will be able to look back and reflect on their own choices and feel good about them. To be clear, I'm not advocating for one position or another. Just interested in the various perspectives and making conversation.
I don't know, it kind of sounds like your are advocating to me...just sayin...
Originally posted by @Paul Bloomfield:
@John Teachout, I have a 4plex in Atlanta only one tenant work with me by paying rent the others dont even want to answer my phone calls or email. All but one of thses Tennants are mth to mth. Any idea how to evict these tenants? I tried work with my tenants but only the ones in Orlando call me back. I was able to work out a reduce payment.
Are these units actually in the city of Atlanta, or just in the Atlanta area? I'm not aware of any city requirements prohibiting evictions or notices but there may be. I don't have any properties in the city of Atlanta so don't follow it. In the rest of the area, there is nothing prohibiting you from posting a pay or quit notice. And if they won't even respond, I would send them a certified letter (w/ delivery confirmation) saying just that. I'd also tape the notice to their door. That may at least get a conversation going. In the letter, I would state something to the effect that "there has been a lot of misinformation going around that people don't have to pay rent during this time period. That is not the case here and you are receiving this notice that legal action is/will be pending against this property."
That's probably not the exact wording I would use but something along that line. Also, if they are month to month, you could give them a 30 day non-renewal notice. That's NOT an eviction and no court action required unless they won't leave.
Another misconception is that people can't be evicted because the courts are closed. There's a partial truth to this but in most areas an eviction can be "filed", it just won't get adjudicated until courts open back up but there would still be a record of the eviction filing, even if it doesn't get followed through on.
All that to say, the tenants need to be educated in the fact that they just don't get to live for free "cause they can't do nuttin to me".
My goal during this time is to not evict or put anyone out of their house, however I will NOT tolerate people just blowing off the rent with no communication or good faith effort on their part.
Now I need to follow my own advice. lol.
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