As the challenges from COVID-19 continue to pile on, real estate investors throughout the region are asking, “how can Philadelphia landlords survive the pandemic?” While there are opportunities for investors in every type of real estate market, the unprecedented impact of coronavirus proves especially challenging for property owners and renters alike. While federal, state, and local governments quickly sprung into action to provide economic relief to individual citizens, much of the legislation that has been passed is aimed at traditional homeowners and renters. Scroll through any real estate discussion board or Facebook group and you will likely find professional real estate investors wondering what landlords can do to protect their investments.
As incredibly stressful as this time is for everyone, there are still some proactive steps you can take to protect your financial future.
Understand Your Tenant’s Rights
Like the virus, the speed at which state and local laws are changing is rapidfire. Philadelphia’s City Council recently passed 5 bills aimed at extending protections for renters. The Emergency Housing Protection Act extends the moratorium on evictions through August 31. In addition, landlords are required to waive late fees on missed rent payments and provide a 9 month repayment plan for tenants who have been impacted by COVID-19.
The best possible thing for any landlord to do right now is stay educated on the changing laws and regulations. The good news for investors is that much of this legislation is temporary. It’s aimed at preventing a both a backlog of evictions and a spike in homelessness when the moratoriums end. Some cities are also extending assistance to landlords. In fact, Philadelphia has launched the Landlord Working Capital Loan program to help landlords whose tenants have been impacted by the pandemic.
Understand Your Tenant’s Situation
Whether your tenants have missed a rent payment yet or not, it’s important to understand what situation they are facing. While layoffs, furloughs, and joblessness have faced Americans at all economic levels, it doesn’t mean that your tenant has necessarily suffered any income loss. On the other hand, if your tenant is having a hard time collecting unemployment, you may need to work with them in ways you never expected. In these unprecedented times, many landlords have helped tenants apply for rent assistance programs from both public and private funds. Connecting your tenants to these programs is a good first step. You’ll also want to understand what bills your tenant must pay in addition to rent. While the government has been quick to alleviate the pressure to pay rent, car payments and credit card bills are still due as usual. Understanding exactly what bills your tenants need to pay and how much money they have coming in will paint a picture of what you can expect over the next several months.
Call Your Bank or Mortgage Company
If you’re carrying a mortgage on your rental property, calling your mortgage company is a no-brainer. Just like there’s been a moratorium on evictions, there have been foreclosure moratoriums for homeowners too. However, relief for landlords may not be exactly the same as a primary residence. It’s important to know what programs your lender can offer. In many cases, the bank will be able to defer mortgage payments for 90 days, but unlike Philadelphia landlords, they are not obligated to work out a 9 month repayment program for missed payments. They will likely require the lump sum be paid at the conclusion of the deferment period.
Consider Legal Action
The reality of the day is that there is likely not a lot of legal recourse that can help you right now. Even without a moratorium on evictions, it’s a long, expensive process. Add to that the backlog of eviction proceedings waiting in the system when the moratorium expires, it won’t be an easy process. That said, if you’re feeling stuck between a rock and a hard place, contacting an attorney is a smart move.
Take a Moment to Breathe
The bottomline is that this is a difficult time for everyone. While open lines of communication with your tenants are good, there is little sense in pestering or threatening your tenants about missed rent. A lot of what is happening now is outside of our control. Focus on what you can control and commit to taking steps that will get you to the other side of this thing.
If you’ve followed our advice but you are still having doubts about your current situation, get in touch with the Fulcrum Home Solutions team. We can make a cash offer on your property and offer solutions that alleviate your burdens.