With lockdown extensions, stricter rule impositions and panic, it appears that COVID-19 is here to stay. While you, as a landlord, can’t do anything about this global pandemic, you can however do something to help your tenants in this dark and uncertain time.While the COVID-19 pandemic has brought a slew of issues, rent seems to be one of the main concerns of landlords and tenants alike. With schools, colleges, malls, offices and even many banks shutting down, both you and your tenant can face a lot of trouble financially. This blog post is not just for you but also for you tenant and will offer rental management tips that will benefit both parties.
Rental Management Tips To Make Rent Payment and Collection Easier For the Landlord and Tenant
Retention Is Your Priority
If a rental or lease agreement is coming to an end this year, this is the best time to discuss extending it. This way, landlords will have ensured revenue for the coming years and tenants will not have to worry about finding another place amid the lockdown.
Pundits and major financial newspapers state that renewal is expected to be in demand more than ever as tenants risk searching for a new place or moving to a new area that may be unsafe. So, look into your agreements and start discussing with your tenants.
Consider Rent Reduction
If your tenant is a working professional, chances are that they are working on a reduced salary. The Coronavirus has not only restricted them to working from home but also reduced their salary with most companies axing 20-30% of their pay. Some multi-national companies have been severe axing at least 40-50%. You should also consider waiving late payment fees so that tenants can have some breathing space to organise their finances.
Consider discussing this with each other and see if the rent can be reduced until everything is back to normal again. While this may put a financial strain on the landlord, remember that the crisis has affected everyone on this planet and by helping one another, you are making this world a better place.
Online Rent Collection
Physical contact of any kind needs to be curbed. Instead of physically receiving or handing over the rent money, push for online rent collection. Internet banking is the first and best choice. Simply add the landlord as a payee and transfer the rent money online. If the tenant does not want to pay over internet banking, we suggest the use of digital wallets such as PayTM, Google Pay and PhonePe. All the tenant needs to do is send the money to the landlord’s bank account or their respective wallet account through one of these apps. This is one of the most important thing in rental management now a days.
Discuss with your landlord or tenant on the mode of payment and start this process right away. Whatever mode of payment you decide on, make sure to get a note of confirmation – email, SMS or phone call – from your landlord so that you, as a tenant, don’t get pulled into issues later.
Landlords Can Expect Better Conversion
As mentioned earlier, tenants are looking to renew their rents and leases in order to prevent going out amid the lockdown. If your vacant property has had some visits in the last two months, it’s possible that the prospects still haven’t found a place. So, get in touch with them again and remind them about your property. If tenants are still looking for a place, they will be tempted to move in to yours as polls suggest that people are trying to find an apartment as soon as possible. You can also create better conversions online. Make sure that your online listings are updated and add as many photos as you can. At OwnesTown platform, you can upload your whole property details including photos as well as videos. It helps to increase the chances to get potential tenants.
Rents Are Becoming Cheaper To Improve Conversions
The pandemic has also created a financial downturn as landlords are considering lower rents to attract tenants. While the virus seems to show no signs of ending soon, we think that a long-term agreement with a lower rent could be financially bad. Instead, we recommend that landlords offer lower rents for the first year and resume offering their normal rates for the rest of the rental period. Landlords must however make sure that the refundable deposit that’s paid is not discounted and ask for the full amount.
Tenants Need To Get Serious
You may be facing pay cuts while some older, retired tenants may not want to dig deep into your pensions and savings. This is the time to get serious about your finances. Overspending of any kind could not only lead to rent payment issues but also credit-related issues and debts. Take a closer look at your account statements and try to find ways to save and spend as little as possible for the next 8-12 months. While you may have a place to stay at the moment, you need to ensure that it stays that way even after this crisis is over as it’s evident that the pandemic isn’t ending anytime soon.
Some Legal Actions and Advices
There is no specific clear announcement from the government for getting rent relief.
Small start-ups and business can use rent EMI option to get some relief for paying rent.
Most of states like Maharashtra, UP, Delhi has made special announcement for labourers and workers, to get rent relief for three months.
One more thing should be clear, that rent relief for three months doesn’t mean that totally skip of the payment, after getting situation under control, the whole rent should be paid by tenant within certain amount of time.
As this situation is getting worse for everyone, so this is time to show some mutual understanding from both the parties. This will help to move out of these financial crisis.
It’s no secret that this is a difficult time for everyone involved. Landlords fear that tenants may not pay their rents on time while tenants struggle with prioritising their expenses to set aside rent money. The only way forward is that both parties manage their finances until we get through these trying times. The pandemic has brought several worries to mind and it’s essential to not make rent payment and collection one of them. To achieve this, we suggest opening a conversation with your landlord or your tenant and implementing these rental management tips that we’ve shared here.