There’s no doubt that that these are uncertain times in the multifamily real estate industry. Large swaths of tenants are losing their jobs due to the spread of the coronavirus COVID-19, and pending stimulus checks from the government hitting everyone’s bank accounts, owners are likely in for a tough ride as renters’ rent checks come due on Wednesday.
As this uncertainty mounts, many people are finding themselves asking, “Do we still pay rent during coronavirus?” As more and more states and cities put a full eviction pause into place, this question seems more relevant than ever.
Yes – of course tenants still need to pay rent. Evictions may be on pause, however non-payment will still cause a lot of trouble and eventual eviction for tenants when the curtains lift. However, with many folks are finding that they may have no choice. With stay-at-home orders causing job loss and financial hardships, finding the money is getting harder and harder to come by. For some, not paying and dealing with the consequences later is looking more attractive every day.
So what can landlords and multifamily owners do to ease the burden on their residents while still receiving the cashflow needed to pay lenders and taxes?
Rent Payment Plans To The Rescue
There’s a number of good solutions that caring multifamily owners can implement to help their residents. However, for ability to pay rent specifically, a rent payment plan may be a good choice.
A rent payment plan company essentially acts as the middleman between landlord and renter. Instead of paying rent on the first of the month directly to the property owner, payment plan companies work out an agreement with a renter to pay their rent on their behalf, and receive reimbursement payment over time.
Firms offering rent payment plans already existed before the coronavirus rocked the world, but they are gaining increased interest during this time as more tenants see the value of paying over time during this economy crisis.
A number of firms, such as Flex or Till, generally offer similar services in that they provide the landlord with full month’s rent up front (so it’s easier on the landlord) and allow for partial, multiple payment from the tenant (so it’s easier on the tenant). While every firm does the details slightly differently, the overall effect is generally a win-win for everyone.
Multifamily Will Persevere
If you’re a landlord worried about rent collections in the upcoming months, you’re not alone. Between the government and the private sector, there are more and more tools popping up every day to help you course correct back on track.
