Why Rental Income Can Survive A Global Pandemic

Why Rental Income Can Survive A Global Pandemic

During this pandemic, one of the things that scares landlords and investors most is whether tenants, who are now protected with eviction moratoriums, will stop paying rent. In March 2020, when COVID hit the states hard, there was widespread fear that tenants would not be able to pay rent. Then, after the Government released stimulus payments and issued eviction moratoriums, the fear morphed into not whether renters can make payments, but will they choose to.

Of course, each investor has a different experience and the results vary according to market and class of investment; however, bad debt and uncollectible rent did not impact investors as expected. In my case, with my personal rentals, both tenants, working class, continued to pay on time for most months and never missed rent payments.

So, why would renting residents continue to pay rent even under such protections? I believe that the commitment to meet obligations is a character quality, and although people hit hard times, when we have high quality residents in our rentals, they are going to do the right thing as best as they can. When they cannot, high-quality tenants will let you know. As real estate providers, our job is to work with people during hard times, be understanding and attempt to make an arrangement that works for everyone.

The fear for many investors is to make an accommodation of lower or discounted rent during the time of a tenant’s hardship and to set the expectation that these arrangements are acceptable in normal conditions. Two things: 1) These are not normal conditions 2) Good tenants do not take advantage of you.

If you are catching my drift, what I am getting at is one of the best things we can do is ensure that our property managers are putting great tenants into our units. Screening is very important: looking at the rental history, employment history, calling references, etc. Whether you are self-managing or working with a property manager, make sure there are robust tenant screening practices. Especially during times such as these, finding and keeping great tenants is one of the best investments we can make.

Passive Investor Startup Guide

To find out more about what it looks like to invest as a passive investor in multifamily real estate, download our free Passive Investor Startup Guide here!

If you invest in stocks or other assets are seek to diversify your portfolio, achieve higher returns or get educated on the power of real estate, subscribe to my articles for automatic updates on new weekly content. Also, sign up for our newsletter for regular updates on our business and to learn how you can passively invest and grow your wealth through real estate.

Rodney Robinson II

What is Absorption In Real Estate?
As you begin to analyze markets, you will encounter the term absorption. …
The Passive Investor’s Guide to C-Class Apartments
Passive Investors should understand the concept of value-add, which is how sponsors …