Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes
6y
I commend what he is doing as a citizen, but I think this is a horrible way to manage a rental business!
Do you see any grocery stores giving away food for free? Or gas stations? It feeds the notion that rent payments are optional. People will always prioritize their spenings dependant on incentives. From all our tenants I have received one half hearted request to lower the rent -- from a guy who has not been impacted and has a goverment job. I told him we have to make the mortgage payment on the first and unless the bank starts getting flexible with us, we have no flexibility with the rent. I don't want to be harsh, as long as they are making a $900 car payment I am not inclined to assist with rent out of my pocket.
If one of our families looses their job and they make an effort to work (so many companies are hireing on the spot right now!) and they really struggle we will work with them and go to reduced rent as a temporary measure. Especially if it's a good long term tenant. We have been flexible in the past and will agree to any reasonable solution - some of our tenants are not very good with money management, so for example we transfer rent bi-weekly (he is a branch manager for a bank, for pete sake..!)
But we will not on a large scale give free rent until groceries are free, car payments are suspended and mortgage payments are on hold. It is important to hold that line, once you have the notion out there that rent is negotiable, they will start to consider if their car or their new phone is more imprtant than paying rent.
That's how landlords go broke and then good tenants, who have always paid on time will have to move, because their landlord failed to run his business.
Rental Property Investor · Oconomowoc, WI · Member since 2016 · 996 posts · 431 votes
6y
I agree 100% with @Marcus Auerbach (not really a surprise there). Great as a human, horrible as an business. Even though these are extra-ordinary times I do come back to "give a mouse a cookie...he takes the whole jar".
There are other ways to show accommodation, nay compassion at this time. A payment plan with slightly more generous terms than normal, providing some groceries. Giving each tenant a $25 GC for the supermarket. Heck, there is so much overloaded information out there tenants might just like a letter from their landlord reviewing their options for energy assistance, credit card assistance, etc.
I fear this will come back to bite the investor in the butt. Next time someone loses a job, or a family member unexpectedly he's going to be forced to be the bad guy when he wasn't before.