What Do Landlords Do If Tenants Get Sick or Are On a Forced Strike?
It's hard to hear a good word about the state of people's health these days. Since the Coronavirus escaped the Chinese borders in January, the world has been in a state of confusion.
Do you prepare?
Do you panic?
Do you move to the most remotely populated area you can find for six months? It could be a thought people are considering.
So as a landlord with tenants, how do you prepare for yourself but also a lack of cash flow if tenants:
Your cash flow can tank, are you prepared?
Unfortunately, for many landlords, there is no time to plan. It's time to decide what actions you'll take to keep your properties.
As a landlady, I had this discussion just this morning with my husband. We are going to see how it goes. BUT with a huge caveat, we are not extremely passive property owners. We have taken precautions for typical non-payment situations and have planned.
Even with proper planning, we don't want to move into our countermeasures to ensure we keep our properties. To help our tenants, we've come up with a couple of ideas. We will put them in place for tenants who are forced to stay home or are shut down due to Coronavirus.
Ideas to help tenants and landlords mitigate cash flow loss during the Coronavirus.
1. Forgive late fees- yes, I know this is almost sacrilegious to say as irresponsible tenants do cost us more time, and a late fee is to help offset those costs. However, why make matters worse?
Keep in mind this is for those who are directly affected by the virus, not those choosing not to pay on time. I have always told my tenants to notify us in advance if they foresee a money issue and can't pay rent on time.
2. Spread out any missed rent payments- we plan on taking any of the payments they've missed due to this illness and spread it out over the rest of the year. That way, they don't have to come up with double rent right when they get back to work. It will be a small increase over time and through the rest of the year until they are paid up.
Again without saving ourselves, this type of cash flow workaround would not be possible. So if you are a new landlord, take notes and make sure you have at least 3-6 months of mortgage payments and any usual and customary utility, tax or repair payments set aside in your savings.
You don't want a pandemic to drain your savings account either.
Eva is a marketing copy and content writer. Her goal is to help businesses set themselves apart and grow!