Managing Rental Property in the Time of COVID-19
Today is April 7th 2020. Here in Orlando FL we are in the middle of local and state “stay at home” orders but are still doing business as real estate is considered an “essential business”. Afterall, people still need places to live and rental homes still need to be maintained and repaired. Things are far from business as usual though. Here are some things we recommend doing if you are a self-managing landlord or just curious what we’ve been doing to adjust to todays new reality.
Socially distance while still getting things done.
Leasing:
If your property happened to be vacant when everything hit, you are at a minimum looking at extra time on market. We are still marketing properties that are vacant and we are still seeing leads come in and showings happening. If your property is still occupied, don’t try and force your tenant to allow random people walk through the home and potentially infect your resident or prospective residents, it’s just not worth it! If you have PPE (like face masks, gloves and sanitizer) you can still show your property but we recommend getting to the home first, turning on all lights and opening a few cabinets and closets (wearing fresh gloves) so people can walk through the home without touching anything themselves while you wait outside. Remember not to shake hands and stay 6 ft apart. Once the showing is completed, reverse the process and we recommend following up with the viewing over the phone to avoid the inevitable creep into your 6ft distancing that occurs when having conversations.
Alternatively, there are self-showing options available with smart locks and lockboxes and camera’s that allow a prospective tenant to safely tour the property themselves without coming in contact with anyone else. If you are afraid of letting people in without you present, know that there are landlord supplemental insurance products like SureVestor that specifically cover anything that goes wrong when using self-access showings.
Additionally, virtual tours and video walk thru’s should be employed on every property. BlueHome has been doing this for years now, but now it is even more important as prospective renters are just as timid about catching Coronavirus as you are (if not more) and they are going to be motivated to view a home if they are more certain it is going to be a home they will like. They can do this from the comfort of their own home via a 360 tour like THIS. A simple walk-thru video LIKE THIS with just your phone camera works wonders or you can get even more involved with a video like THIS. Youtube is free and easy to post walk thru videos on and Zillow even offers a free 3D tour app that only requires a cell phone to make.
DO NOT compromise on the quality of your tenants. During uncertain and slower times like this it is very easy to forget why you put your selection criteria in place and you may start to talk yourself into approving a tenant that would not otherwise be approved. Don’t give in to the urge! It is better to be vacant an extra few days or even few weeks vs. placing a tenant that will end up being a nightmare for you. Especially with rolling eviction moratoriums and scam artists coming out of the wood work.
Maintenance and Repairs:
Restrict what maintenance and repair work you need to do to a property to emergency needs and repairs that can be done on the exterior of a home. Until the worst of the danger has passed, any interaction with your tenants and vendors (vendors still willing to go out to properties) should be kept to a minimum. Keep a list of any repairs not deemed essential and address them all after the crisis has passed. When you do have to send a vendor into a home, confirm with them they will have PPE like masks and gloves as well.
Rent Collection:
If you’re still collecting rent with physical checks or cash, now is the time to come into the 21st century! Besides the fact physical payments could transmit viruses, it’s going to get harder and harder for people to come up with rent money, and when they do, you want to make it as easy and quick as possible for them to send you rent. There are tons of free pay apps out there now like Venmo, Zelle, etc. Just be sure to send your tenant receipts for when you receive the money. Or even better, sign up for a service like eRentPayment.com or Cozy.co.
Be Flexible When You Can
Remember, we’re all in this together. How you treat others will directly affect how others treat you. It’s going to be the bad landlords and property managers out there that are going to make governments step in even more with restrictions on late fees, evictions and even rent collection if we don’t do our best to work with our residents with true hardships.
Rent Collection:
There is no requirement for landlords to give free rent or even deviate from their lease agreement at all in terms of what rent a tenant owes and when. However, when you have a tenant with a true hardship it’s in your best interest to work with them. Keeping tenants in place right now should be your priority whenever possible. Plus, there are bans in place on evictions through at least the end of May, or possibly longer if your property has a FNMA Freddie Mac, VA or other government backed mortgage.
We recommend getting some kind of proof of the hardship (lay-off letter from employer) and if your resident can’t pay the entire months rent payment this month, offer to accept a certain percentage (maybe 50%) of rent due and put a WRITTEN agreement in place that the remaining % is to be paid next month, or spread out over the next 2-6 months. Also, it’s best to waive late fees for April and May.
Most residents should also receive stimulus checks and unemployment soon, so by being flexible and helpful to your residents now, they will be that much more inclined to use those funds to pay rent.
Renewals:
If your lease is coming up on expiration anytime in the next 60-90 days, best to reach out to your residents sooner rather than later. Have a conversation with your tenant and see where they are. Do they have stable employment? Do they want to stay in the home another year? Are they able to make the decision to stay another year if their employment or income is in jeopardy?
Go from there as to whether you want to keep them another year, but if they or you are just unsure if they can commit to that long a time, offer a month to month option to incentivize them to at least stay with you a bit longer. That way they may sign up for another year when things stabilize for them, or at the least you will keep a paying tenant in the home until they can make the commitment. The best tenants will remember your good will and flexibility. So, if it ends up they can’t afford the home anymore, they will give you as much notice as they can and will more likely leave the home in better shape when they move out. The worst tenants will sign anything knowing full well they will just break the lease anyway if they need to, or if evictions are still frozen will just stay in the home for as long as they can without paying anything. If those tenants are month to month though, you may not be subject to a freeze for evictions for non-payment of rent…and can get them out because you gave them notice you were no longer renewing their month to month agreement (this is hypothetical, consult an attorney for details about what current bans on what types of evictions there are in your jurisdiction).
Inspections:
BlueHome always performs an interior property inspection before we sign any renewal lease. During times of social distancing though, even with masks and gloves, getting inside the home can be a risk for both the inspector and the resident. So again, be flexible here and use the month to month option until you can either get in to inspect, or if the tenant has been with you a long time, work on doing a facetime walk through with them or have them do a self-inspection with you sending them a list of things to check and take pictures of that may be safety or on-going maintenance items.
Stay Positive!
It can get overwhelming with so many things going on in the world. Taking care of your family to keep them healthy, your regular day job, homeschooling your kids in some cases, dealing with possible job loss, income reduction, not knowing if you have enough toilet paper to make it through the week, and not being able to unwind on the weekends because you can’t go anywhere. Add on to all that having to worry about your rental property, and it can put even the best of us in a bad mood.
Just remember we’re all in this together and the more we work with each other in a compassionate and understanding manner the higher the chance we all come out of this without significant harm. Have a general game plan like discussed above, but don’t be afraid to think outside of the box for win-win solutions. Just be sure to get everything in writing so there are no misunderstandings and stay the course. This too shall pass.
Contact us
As always, if you need help managing, leasing or selling your property, BlueHome offers a complete set of solutions for your real estate needs.