Many Multifamily Real Estate Investors have experienced a lot of new obstacles in 2020, because of Covid-19. Below is how multifamily investors around the United States are being impacted by the unexpected life changing events in 2020:
Landlords are doing whatever they can to keep current tenants in place.
- Offering concessions to renew leases and attract new tenants.
- Eviction moratoriums are keeping tenants in place and forcing landlords to the negotiating table with their current tenants. Offering flexible payment plans and payment dates for rent are now becoming common thing among tenant/landlord relationship during Covid.
Landlords are forced to embrace technology.
- People being forced to social distance and limit gatherings, this has forced landlords to embrace technology in different ways. Technology can be used in various ways. Everything from keeping tenants living in the community engaged to how tenants pay.
- Property managers are realizing online payment is way more efficient for them and their tenants.
- Technology allows property managers to stay in compliance with social distancing rules/state laws while keeping in contact with their tenants
Small Multifamily landlords are being hit the hardest by covid 19. Many small Multifamily owners depend on the rent payments to pay their mortgage and other monthly living expenses. And when the tenant doesn’t pay, the option to evict the tenant is currently off the table in most states and may be off the table for a year or longer.
American Apartment Owners Association survey concluded 60% of landlords said their tenants are unable to pay rent because of the coronavirus and 80% of landlords said they are negotiating new terms with renters and are willing to work with renters.
Landlords should lower expectations of being paid quickly from tenants who missed rent payments. It could take tenants 18 months or longer depending on how many rent payments are missed to fully repay landlords
Landlords are turning to lease guaranty to protect against missed payments. A lease guaranty is a separate contract which a third party guarantor agrees to meet the obligations of the Tenant to the Landlord. If the Tenant fails to pay rent, the Landlord can recover the arrears from the guarantor, usually before seeking damages from Tenant.
-The Multifamily Review Team
Hi, my name is Michael Avent. I founded The Multifamily Review in June 2020. I’m a Commercial Agent at Northcap Multifamily located in Las Vegas, Nevada. My vision for The Multifamily Review is to be the most trusted resource for all Multifamily Industry Professionals. We strive to offer the best content to our readers and are always open for suggestions. Make sure you sign up to join our newsletter to stay up to date on our latest blog, ebook, and more exclusive content that’s coming your way! The Multifamily Review team and I look forward to building a deeper relationship with you!
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