{"id":3753,"date":"2021-11-02T17:17:00","date_gmt":"2021-11-02T21:17:00","guid":{"rendered":"https:\/\/propertyonion.com\/education\/?p=3753"},"modified":"2023-11-06T12:57:46","modified_gmt":"2023-11-06T16:57:46","slug":"the-impact-of-covid-19-on-landlords-in-2021","status":"publish","type":"post","link":"https:\/\/propertyonion.com\/education\/the-impact-of-covid-19-on-landlords-in-2021\/","title":{"rendered":"The Impact of COVID-19 on Landlords in 2021"},"content":{"rendered":"\n<p><a id=\"post-3753-_4u9wzn2i9267\"><\/a> The Impact of COVID-19 on Landlords in 2021<\/p>\n\n\n\n<p>The COVID-19 pandemic left its mark on the <a href=\"https:\/\/www.brookings.edu\/research\/social-and-economic-impact-of-covid-19\/#:~:text=The%20COVID-19%20global%20recession,forecast%20back%20in%20October%202019.\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">U.S. economy<\/a> in many ways. One impact that has gone unnoticed, however, is how it changed Americans\u2019 attitudes about housing.<\/p>\n\n\n\n<p>Much like the Great Recession in 2008, COVID-19 has forced households to rethink their financial positions and rendered them more cautious during times of economic turmoil.<\/p>\n\n\n\n<p>This was no different for landlords, who were forced to alter their expectations for future rent payments as well as question long-held beliefs about owning rental properties.<\/p>\n\n\n\n<p>As landlords, private investors, and government agencies continue to come up with solutions, strategies, options, programs, grants, and loans to help landlords handle the challenges of operating in a post\u2013COVID-19 world, we need more insight into how the recession has affected landlords.<\/p>\n\n\n\n<p>We need more data on how exactly it is affecting them, what specific challenges they are facing, what solutions or approaches have worked for them\u2026the list goes on.<\/p>\n\n\n\n<p>Below we dive into each.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 ez-toc-wrap-left counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">In this Article:<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/propertyonion.com\/education\/the-impact-of-covid-19-on-landlords-in-2021\/#Effects_of_COVID-19_on_Landlords\" >Effects of COVID-19 on Landlords<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/propertyonion.com\/education\/the-impact-of-covid-19-on-landlords-in-2021\/#How_Landlords_Dealt_with_Rent_Payment_Post%E2%80%93COVID-19\" >How Landlords Dealt with Rent Payment Post\u2013COVID-19<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/propertyonion.com\/education\/the-impact-of-covid-19-on-landlords-in-2021\/#Economic_Pressures_Piling_on_Small-Scale_Landlords\" >Economic Pressures Piling on Small-Scale Landlords<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/propertyonion.com\/education\/the-impact-of-covid-19-on-landlords-in-2021\/#The_Bottom_Line\" >The Bottom Line<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Effects_of_COVID-19_on_Landlords\"><\/span><a id=\"post-3753-_i765ecmy84r4\"><\/a>Effects of COVID-19 on Landlords<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>According to <a href=\"https:\/\/www.jchs.harvard.edu\/sites\/default\/files\/research\/files\/harvard_jchs_small_landlord_survey_de_la_campa_2021_0.pdf\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">The Joint Center For Housing Studies<\/a>, the COVID-19 pandemic has made it harder for low- and moderate-income households to pay rent.<\/p>\n\n\n\n<p><strong>Most landlords and real estate investors have taken a big hit<\/strong> \u2014 residential and business tenants can&#8217;t pay rent \u2014 with many businesses unable to survive the effects of the pandemic.<\/p>\n\n\n\n<p>The paper shows that by October last year, rent defaults had increased in minority and low-income communities but had slightly increased in wealthier communities.<\/p>\n\n\n\n<p>For small landlords \u2014 those with three or fewer rentals \u2014 a common response for rent defaulters was to defer property maintenance or offer the tenants rent repayment plans.<\/p>\n\n\n\n<p>Regardless, COVID-19 has proved to be a big blow to most mom-and-pop landlords, resulting in financial strain. Moreover, the failure of these properties means declined property tax to municipalities and loss of maintenance jobs.<\/p>\n\n\n\n<p>As an investor looking into <a href=\"https:\/\/propertyonion.com\/education\/see-how-to-increase-your-rental-profits\/\" target=\"_blank\">buying rental property<\/a>, this might be the perfect chance to get that deal done, but it comes with a risk.<strong> It might take months or years before the tenants you inherit achieve financial stability. <\/strong><\/p>\n\n\n\n<p>If you&#8217;re an investor with an existing rental property, below are ways you can deal with late rent and evictions.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_Landlords_Dealt_with_Rent_Payment_Post%E2%80%93COVID-19\"><\/span><a id=\"post-3753-_tnntecgrvcj1\"><\/a>How Landlords Dealt with Rent Payment Post\u2013COVID-19<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Last year on March 18, former President Trump ordered the Department of Housing and Urban Development to suspend evictions and foreclosures. However, after a recent ruling on August 26, 2021, by the Supreme Court, the federal evictions and foreclosure moratorium is no longer in place in <a href=\"https:\/\/www.cnbc.com\/2021\/07\/29\/these-states-will-still-ban-evictions-after-national-moratorium-lifts.html\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">most states<\/a>.<\/p>\n\n\n\n<p>If a tenant can&#8217;t pay rent on time, the next challenge most landlords face is how to enable rent deferrals and payment plans before going through with <a href=\"https:\/\/propertyonion.com\/education\/how-to-evict-a-tenant-in-5-simple-steps-yourself\/\" target=\"_blank\">eviction<\/a>.<\/p>\n\n\n\n<p>In a time of uncertainty, landlords have proposed the following.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><a id=\"post-3753-_gnft6wal3fca\"><\/a>Accept Partial Payments<\/h3>\n\n\n\n<p>If a tenant isn&#8217;t able to pay the full rent, some landlords may consider allowing them to pay what they can. Although accepting partial payments might be a risky move, it is the best option in some cases. Just make sure to specify the amount and the repayment conditions.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><a id=\"post-3753-_70d2rn9t4u6p\"><\/a>Use the Security Deposit<\/h3>\n\n\n\n<p>The amount of rent a tenant pays depends on your situation as a landlord, but some landlords suggest charging a tenant\u2019s security deposit or last month\u2019s rent in the place of a missed rent payment.<\/p>\n\n\n\n<p>However, this only works when handling a single month&#8217;s unpaid rent.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><a id=\"post-3753-_2uwq37hpn4xk\"><\/a>Communicate with Your Tenants<\/h3>\n\n\n\n<p><strong>The financial burden of dealing with the pandemic has prompted many landlords to rethink their business models.<\/strong> To help their tenants stay in place, landlords often offer them a reduction in rent or other options to keep their tenants from moving out.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><a id=\"post-3753-_i1o13d39ji3w\"><\/a>Waive Late Rent Fees<\/h3>\n\n\n\n<p>Landlords are waiving late fees on all kinds of payments so tenants don\u2019t become overburdened. Just make sure to communicate in detail your desired policy on late rent fees.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><a id=\"post-3753-_jkju6du592k5\"><\/a>Set Up a Rent Deferral Program<\/h3>\n\n\n\n<p>A few landlords have created rent deferral programs for their tenants. Landlords need to come up with different solutions for tenants who are eligible for rent deferral.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Economic_Pressures_Piling_on_Small-Scale_Landlords\"><\/span><a id=\"post-3753-_1ids3y0yh3i\"><\/a><a id=\"post-3753-Xf6f1043d44ebb5cdede17f1818b7b237007086a\"><\/a>Economic Pressures Piling on Small-Scale Landlords<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>According to research by <a href=\"https:\/\/www.jchs.harvard.edu\/sites\/default\/files\/research\/files\/harvard_jchs_covid_impact_landlords_survey_de_la_campa_2021.pdf\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">The Housing Crisis Research Collaborative<\/a>, it&#8217;s clear that mom-and-pop landlords have been hit the hardest by the COVID-19 pandemic. The report shows that owners who recorded missing at least one mortgage, property tax payment, or utility in 2020 rose by 15 percentage points this year.<\/p>\n\n\n\n<p>Without revenue, most small-scale landlords are forced to use their savings to cover property taxes, repairs, and even mortgages. <strong>But this approach just isn&#8217;t sustainable. <\/strong><\/p>\n\n\n\n<p>As a result, the number of small-scale landlords who listed their property for sale also jumped by 10 percentage points. Given the current red-hot state of the real estate market, more landlords are giving in to the option of selling and cashing out of the rental business altogether.<\/p>\n\n\n\n<p>However, the buyers are not typically other investors, and the tenants are being pushed out by the sales.<\/p>\n\n\n\n<p>The market is seeing a rise in institutional corporate landlords, and <strong>this shift could signal fewer entry-level rental options for renters in the future<\/strong>.<\/p>\n\n\n\n<p>Together, these findings illustrate the burden of the pandemic on mom-and-pop-owned rentals, which can have a negative long-term impact on the viability and affordability of these units.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"The_Bottom_Line\"><\/span><a id=\"post-3753-the-bottom-line\"><\/a>The Bottom Line<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>If you&#8217;re struggling with debt on your investment properties and the lack of a <a href=\"https:\/\/propertyonion.com\/education\/how-to-snowball-your-rental-portfolio-for-explosive-growth\/\" target=\"_blank\">stable rental income flow<\/a> is making things harder, selling might be the easiest option. However, if possible, just hold on a little longer.<\/p>\n\n\n\n<p>You can apply for <a href=\"https:\/\/www.investopedia.com\/pandemic-unemployment-assistance-pua-definition-4802064\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"Pandemic Unemployment Assistance (PUA (opens in a new tab)\">Pandemic Unemployment Assistance (PUA<\/a>) or the <a rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\" href=\"https:\/\/www.nytimes.com\/2021\/08\/25\/us\/politics\/eviction-rental-assistance.html\" target=\"_blank\">$25 billion relief<\/a> on behalf of your tenants.<\/p>\n\n\n\n<p>And despite having to navigate the ever-changing legislation and COVID-19 safety regulations, the rental market is still a hot prospect for those looking to invest. If you&#8217;re looking to start investing in real estate, the time is now. Mortgage interests are low \u2014 historically low, in fact!<\/p>\n\n\n\n<p>Do keep in mind that with great opportunities come great challenges and risks. As a real estate investor, don&#8217;t pass out on great deals but make sure to manage the risks and come out of the other side richer than before.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Impact of COVID-19 on Landlords in 2021 The COVID-19 pandemic left its mark on the U.S. economy in many ways. One impact that has gone unnoticed, however, is how it changed Americans\u2019 attitudes about&hellip;<\/p>\n","protected":false},"author":35,"featured_media":3760,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[314,218,217,347,11,239,337,256],"class_list":["post-3753","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-real-estate-investing-articles","tag-314","tag-coronavirus","tag-covid-19","tag-forecast","tag-foreclosure","tag-landlord","tag-moratorium","tag-tenants"],"_links":{"self":[{"href":"https:\/\/propertyonion.com\/education\/wp-json\/wp\/v2\/posts\/3753","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/propertyonion.com\/education\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/propertyonion.com\/education\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/propertyonion.com\/education\/wp-json\/wp\/v2\/users\/35"}],"replies":[{"embeddable":true,"href":"https:\/\/propertyonion.com\/education\/wp-json\/wp\/v2\/comments?post=3753"}],"version-history":[{"count":3,"href":"https:\/\/propertyonion.com\/education\/wp-json\/wp\/v2\/posts\/3753\/revisions"}],"predecessor-version":[{"id":5577,"href":"https:\/\/propertyonion.com\/education\/wp-json\/wp\/v2\/posts\/3753\/revisions\/5577"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/propertyonion.com\/education\/wp-json\/wp\/v2\/media\/3760"}],"wp:attachment":[{"href":"https:\/\/propertyonion.com\/education\/wp-json\/wp\/v2\/media?parent=3753"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/propertyonion.com\/education\/wp-json\/wp\/v2\/categories?post=3753"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/propertyonion.com\/education\/wp-json\/wp\/v2\/tags?post=3753"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}