Corona Virus Crisis provisions

[Bob Collett]

I am getting calls from tenants almost every day wanting to know what provisions we are making regarding the Corona Virus crisis.

The Corona Virus is real both in its potential impact on our health, and also its certain impact on our economy. As a rental property owner there are several concerns.

• For those of you who have section 8 government subsidized tenants, you should be OK. While tenants may have trouble paying their tenant portion of the rent, in most cases the larger portion of the rent is paid by the government housing authority.
• I am seeing projections that the United States may experience 20% unemployment. If that is true, it will likely be at the higher end in places like Cleveland. The impact of this will be staggering upon tenant’s collective ability to pay their rent. Furthermore, many of our tenants have low income service jobs. All restaurant jobs are gone, many factory people are already getting laid off, Uber drivers are done, anything related to travel is done, casinos are closed, schools are closed… on and on. 
• Some of our tenants tend to be employed as nurses, medical aids, and support jobs in medical facilities and such. These folks are more likely to have steady employment, and should retain their income through this crisis; although they are also at greater risk to get sick themselves.
• Already the calls are coming in from tenants asking what provisions we are making to get them through these difficult times. From where they sit, all property owners are wealthy. Tenants being as they are, may try to exploit the situation… but unfortunately, I think most of the hardship will be real.
• It appears as though the government is going to take several steps that impacts us:
• 1. The government says they will grant immediate unemployment compensation to those whose jobs are lost due to Corona
  2. The government will send $1000 to everyone according to the news
  3. There is a moratorium on all evictions. Tenants all know this.

My Thoughts:

Consider a rent reduction of perhaps 10% for tenants who pay by the 1st of the month. The idea is that on limited income tenants will have to make choices. We want them to pay the rent as their first choice.

Consider a rent deferment for true hardships as in “pay me later”. I have no way of knowing if this is a good idea. Tenants never seem to catch up once they fall behind. However, on another thread someone suggested allowing tenants to "borrow" from their own security deposit to pay the rent.  Good idea.

For tenants who normally pay on time, I plan to waive late fees as a gesture of good will. These accrue to me anyway and not to the owner.

I will be searching for government rent assistance programs. Let me know if you hear of any related to Corona assistance.

If your property goes vacant, or for new properties, consider section 8. It has never looked so good.

When you get your $1000… consider setting it aside as your rental property emergency fund. You will probably need it.

Beyond the above, I am open to your ideas... especially if you hear of any assistance programs related to this crisis other than what the white house is saying daily.

Be safe.

Bob Collett
Property Manager