We have four properties with a total 36 units in Jacksonville, Florida. We follow a "value-add" investment strategy, so we only buy class "C" properties, but they have to have great locations. As such, 3 out of our 4 properties are within 2 blocks of the ocean and the 4th property is on the riverfront within a 5 minute drive to downtown Jacksonville. We spend whatever we think is necessary to get the properties, typically built in the 1930's and 1940's, from class "C" to as close to a class "A" property you can get with a property that old. We also present ourselves as extremely high service with respect to property management, treating all of our residents as "customers", and going out of our way to meet all of their requests. As a result, we've often been able to double the rents from the rates when we first purchased them. That's all a prelude to saying that the majority of our residents are definitely in the higher levels of the socio-economic range. With that, you'd think that even something as disruptive as the COVID-19 crisis would not negatively impact our residents' ability to pay rent. Well, we just received our first text from one of our residents informing us that she has been furloughed and asking if we have "considered any sort of reduced rent for this sort of situation".
I feel very fortunate to have access to BiggerPockets and all the other real estate investors out there that are dealing with the same situation. I personally loved the letter that Natalie put together. As I said, we strive to provide a superlative customer experience for our residents. As such, I think offering up a letter like Natalie's sends an extremely positive message to our residents. However, that doesn't mean that we're going to simply reduce the rent when they ask without being sure they have tried every other avenue to make the rent. And, if we do provide them with a temporary reduction, it will be pursuant to a plan that will get us paid in full before the end of the lease term.
I'm offering up my version of Natalie's letter. I took what she wrote, put it in our Company's "voice" and added in an idea from one of Brandon Turners's posts - accepting credit cards to help residents pay their rent. For those of you interested, set out below is the letter we sent out:
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Dear Resident,
Like most of you, we continine to monitor the situation surrounding COVID-19 and are sending you this email to address any job layoffs or lack of funds you may be suffering as a result of this crisis.
We understand these are unprecedented times and that a lot of people may be confused and uncertain, especially when thinking about how this is affecting them financially. If you are experiencing severe financial issues due to this situation, we recommend staying up to date with the several government programs offering financial aid to those in need and to apply as soon as they become available. The most obvious program for those that have lost their jobs is Unemployment Insurance. The link below is for how to apply for Unemployment Insurance in Florida:
https://www.stateofflorida.com/articles/florida-unemployment/
In addition, we have now added the option on your tenant portal to pay your rent using a credit card. The advantage of this is it will allow you to defer paying your next month’s rent for the 30 day “float” period, and after that to only pay your monthly minimum, thereby helping you to preserve your cash during this exceptional time. Normally if you used your credit card to pay your rent on the tenant portal you would be charged a 2.95% convenience fee by our credit card processor. However, during these trying times, we will be absorbing the 2.95% credit card convenience fee.
If you do not have access to a credit card and are still worried about either not being able to pay next month's rent or any future rents and have exhausted all the other options you may have, we ask that you please send us an email prior to the rent's due date explaining your situation along with whatever relevant documentation you may have. At that point, we will assess the situation and work with you to come up with a plan.
In the meantime, we would also like to inform you that due to social distance recommendations, some of our maintenance contractors are taking time off. Therefore, some maintenance requests will need to be postponed. We will keep you updated on our ability to perform your specific maintenance requests on the tenant portal.
We want to sincerely thank those who are working hard within the essential services of our community and to all others who are staying home to help avoid the spread.
Our best wishes to you and your families.
Glenn
