COVID-19 changed the world, seemingly overnight. With unemployment spiking and economic uncertainty abound, investment property owners found themselves in a state of confusion and legitimate concern. In these times, having a good property manager is of the utmost importance.
Throughout the situation, our clients have felt confident that their properties have been managed properly without having to worry about collecting rent and the associated issues.
How We Handled COVID-19
One of our main goals is to protect our investors’ properties and interests while remaining loyal to our tenants. This includes understanding the difficult situation that some of them were experiencing and finding creative solutions.
In order to be proactive, we sent an email to all tenants on April 5th reminding them that rent was due, but emphasizing that we would work with those laid off due to COVID-19 with proof from their employer. Our goal was to provide support by removing late fees and giving them time to apply for unemployment while also making sure there was a plan to collect the rent. Our weekly follow-up system allowed tenants time to collect funds while also protecting our property owners.
This method provided surprisingly positive results in both increasing the relationship with our tenants and collecting rents. Out of the 400 units we manage (approximately 50% SFH and 50% apartments), only nine hadn’t paid rent for April 2020 by the end of the month (down from an initial 30 who were having cash flow problems due to COVID-19). These remaining tenants planned to pay with their unemployment benefits. By the first week of May, all but five had paid. These units are C to C+ units with a generally higher level of late tenants and delinquency, however, during this difficult time we observed a lower level of delinquencies.
Our strategy for combating the global crisis worked, as we registered a higher collection rate than normal for May, with 80% of tenants paying on time by their due date and a total collection rate of 97.75%.
Giving Back to Our Tenants
Throughout this crisis, we’ve shown that we care for our tenants as well as our property owners. Having a property manager who is able to manage all aspects of your property no matter the economic situation is a major advantage for all investors.
To show our commitment, we have decided to give back-up funds of $500-$1,000 to 10-15 of our tenants. The goal is for them to feel supported and to have a back-up-plan for future emergencies.
In order to gauge our tenants’ situation and thoughts on such a project, we conducted a survey of 120 tenants. The results are overwhelmingly positive and support our new plan.
Tenant Survey Results
Do you feel that having one month rent prepaid will help you in the event of life emergencies to be able to catch up more quickly on rent and handle the emergency- car repair, death in family, etc?
If your landlord paid one month rent for you would you continue to pay your rent until you had an emergency or would you not pay that month’s rent?
Would your landlord paying one month rent lead you to care more about the home you are renting?
Our survey shows that if we work together to get through difficult situations, we can build stronger bonds that will help us all in the future.
We will continue to work with both our clients and tenants in order to ensure continued success in the coming months.