Corvid-19 Investing Decisions

[Mardica Henderson]

In order to restrict the spread of the virus, schools are shutting down. Many parents work while their children are in school. Now these parent’s will need to arrange something else for their kids. Sending the kids to some sort of day care is not an option in these days of confinement.

Perhaps there’s a grandmother who could watch the kids – a grandmother who by her very age, is considered ‘at risk’. The grandkids shouldn’t be around grandma if possible.

So the parent is forced to stay home from work. Some of them can work from home, but many in service industries don’t have that option. They are effectively unemployed. (There are some steps being taken to help these people, but as of this writing, they are only ideas.)

The parent who works in the service industry is often living from paycheck to paycheck. They likely don’t have reserves to live on while they are at home. If these people must choose between paying for food, electricity, etc or paying their rent – rent loses.

I believe that most people understand that there is a process to being kicked out of their home. A quick google search tells them that the process might give them some time. Maybe enough time to for the virus to be controlled and for work to again be available. So in their desperation, they don’t pay the rent.

In order to help the citizens during this trying time, many communities are halting evictions. Anyone who has the illness, is caring for someone with the illness, or has lost their job due to closures or school closings, cannot be evicted. In some communities, no one can be evicted regardless of why they're not paying rent.

As a landlord, if your state still allows evictions, you then run the risk that your community is one of the many that are shutting down the courts to all but the most pressing of cases such as custody cases. When the courts start up again, the backlog could last for months. The amount of time a tenant can remain as squatters is unknown.

And finally you have the tenant who has the funds and/or the employment, to pay their rent. But they will decide to take advantage of the situation and not pay their rent.

What we see is the concerted effort to help people who are impacted by this crisis. Unfortunately, these efforts seem to be about protecting the tenant with no regard for the landlord. Who pays the mortgage on my rentals and on my personal home, if my business – that of being a landlord – is affected by the virus? Will the mortgage holders, utility companies, etc. hold me harmless for not paying my bills?

Perhaps that consideration will happen in time. Or not . . .