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We all can agree that we are in unprecedented times with the pandemic. Housing investments have the potential to take large losses. Will you have enough income to pay your bill? Will your occupancy drop because the residents are now unemployed? These are questions I am sure every real estate investor are asking themselves. This can be a time of opportunity if you have the right approach.
Resident Retention
Just like you the residents of your property are going through turmoil as well. Reaching out to show you understand and are willing to help them work through their struggle will help you as well. By letting them know that you can work with them to help defer a portion of their rent will keep income streaming for you and potentially avert an eviction at a later date. Remember the government has thrown them a lifeline and as long as they have the right priority they should be able to weather the storm with you.
Reduce your expenses
Think of all the ways you can reduce your costs. With everyone being home, it is almost assured landlord paid utilities will be higher. You may even need to increase trash service. Consider potentially mowing the grass less often. Ask your residents to conserve utilities. Defer maintenance that is not critical to the viability of your investment.
Ask for assistance
The Federal government has also made assistance available through the SBA to get loans (some forgivable) to companies that have suffered financial losses. Some local governments are offering loans to businesses at extremely low or now interest. Find the ones that you qualify for and go for it. In some cases reach out to your lender and ask for a suspension of you mortgage payment. You should consult you financial advisor on the pros and cons of these actions.
Our approach
Early in the crisis we contacted each of our residents and let them know if they brought a letter from their employer that they were laid off and they provided evidence they had applied (or tried to apply) for unemployment we would allow them to enter into a deferred rent agreement. This would permit the resident to defer 40% of their rent for 3 months and then pay it back over the next 6 months.
Additionally, we published on our website all the locations in each county we manage in the locations for food assistance and in some instances even coordinated with our property owners to deliver food to the residents.
We increased cleaning of common areas and asked the residents to conserve utilities. We provided our maintenance staff PPE and only had them interact with the residents in emergency situations. This was a good opportunity to make units that were vacant ready quickly.
This is the other opportunity you have to increase occupancy. While you would think no one would move during this crisis, Right? That is not the case and it is your opportunity to increase occupancy with the tenants of other owners that don’t recognize what they need to do. Our advertising for new resident includes that same offer to defer 3 month’s rent and pay it back over the next 6 months. If you are currently living in a situation where the landlord doesn’t care about your situation you are going to need a place to live.
We are keeping our lease staff safe and active by doing self-showings using electronic lockboxes. We use Rently but there are other on the market. Online applications and virtual move ins have allowed us to increase our occupancy over the last 30 days instead of being stagnant and waiting for the crisis to be over.
We use state of the art management software that permits no contact rent payments. It allows the resident to pay online with an e-check or credit card. Additionally the residents can pay cash at any Ace Cash Express, CVS, or 7-11.
Being prepared and knowing the right steps to take can turn a disaster into an opportunity. Contact us today to learn how REM Commercial can help you make the most of the COVID-19 pandemic.