Property owners and renters are both facing a challenging financial time right now in the Orlando area. The COVID-19 crisis has led to some dramatic job loss and reduced incomes for many people who rely on our tourism industry. Your renters might very well be struggling to pay their rent right now in Central Florida, if the rest of the nation is any indication. Property owners are finding it difficult to collect the rent without being the "bad guy."
The COVID-19 crisis has created the need for investors to apply a delicate balance of empathy and lease enforcement, but the reality is that property owners still have bills and mortgages to pay—and you need your residents to pay the rent to make that happen. Rent collection is also the vehicle property owners use to continue providing a safe rental home to renters in Orlando: maintenance costs money!
What can Orlando property owners do if tenants don't pay the rent? Your approach during a financial crisis either helps maintain your working relationship with your renters or dooms it when it comes time to collect rent. While it looks like our economy is set to reopen hesitantly soon, it will doubtless take some time for things to return to "business as usual."
When you have a property manager you can rely on, they become your buffer, relationship manager, and enforcer—all in one. When you're a DIY property owner on your own, you need to check out these tips from an expert in Orlando property management!
Please note: This blog is not intended as legal counsel. When in doubt, speak with a competent attorney or your Orlando property management partner!
1. Document Everything
Documentation should be a way of life for every investment property owner. With excellent notes and a paper trail (even a digital 'paper' trail), you have an accurate record and history of events that support decisions you can legally make as a property owner.
Short-term guidelines can restrict how you address situations where your renters either can't or outright refuse to pay the rent during a universal crisis. When evictions aren't possible due to government crisis protocols, keeping track of your communications with your renter helps you support the case for eviction if it becomes necessary after restrictions are lifted. This makes your paperwork skills crucial if you want to protect your Orlando rental.
- Keep track of all communications: When did your tenant first reach out to you and let you know they can't pay the rent? Did they reach out at all? When and how did you respond to your residents? Keep a log of emails, texts, and recaps of phone calls.
- Make records of recommendations: Have you offered suggestions to help your tenants pay the rent? How did they respond? Make a note of your efforts to work with your renters to help them address their difficulties. Often, offering a solution can help produce the desired result and stave off eviction.
- Log a lack of communication: Has your tenant gone off the radar? If they aren't responding to payment reminders or offers to work with them on the rent, document their lack of communication, too.
- Store lease agreements: The lease agreement is your guide to communicating with your renters about past-due rent. Always keep them handy!
As a leader Orlando property management, we know that handling tenant rent collection in a crisis requires patience. Keeping the details about the communications between you and your tenants can be tedious if you're managing paperwork across multiple properties in Central Florida—but it's necessary.
2. Be Compassionate—but Not a Pushover
This tip may be the greatest challenge for many investors and property owners during a time of crisis. It's easy to see your own struggles and that of your renters and develop a bond over shared hardships. However, while property owners can be compassionate and as flexible as possible when working with their renters on rent, you are still running a business with some considerable overhead. Property taxes are rarely canceled outright—even during a pandemic.
It's important to note (professionally) that the rent is still due on time, every month, and according to your lease agreements. However, going about your rent collection compassionately can go a long way in helping your tenants understand that they aren't just a paycheck to you.
A crisis provides an opportunity to build tenant-landlord relationships that can lead to lease renewals down the road when they are managed carefully.
- Softening the language in your payment reminders helps your renters see that you depend on each other.
- Let tenants know you understand their current financial challenges—you're facing them together.
- Offer to discuss options that make it easier to pay what they owe in manageable increments.
Flexibility (within reason) makes an impression on renters who might be struggling to feed their families or pay the bills when a crisis like COVID-19 reduces or completely removes their source of income.
3. Work With Your Renters as Much as Possible
Providing options on a tenant-by-tenant basis can help you collect the rent and help renters feel like they have a home—not just a rented space and a demanding landlord. However, you must ensure that you can offer the same options to each of your renters to prevent discrimination during this time.
Start by directing tenants to local, state, or federal resources that can help them with rental assistance, food, or paying other bills. If outside resources can help your tenants meet different financial needs, they can put more money toward paying the rent.
You can also consider offering payment plans to your residents who need it most. This can help them pay the rent little-by-little while still fulfilling the full rental amount per the lease agreement.
4. Evict as a Last Resort—When You Can
As an expert in Orlando property management, we know that eviction is always a last resort. We also know that despite your best efforts to work with your tenants, you might face a difficult situation with a resident who still can't (or refuses to) pay the rent. If a tenant can't comply with any of the options you've offered or continues to violate your lease agreement, it may be worth considering eviction.
- Compile the documentation we mentioned above, and be patient.
- As soon as the government lifts restrictions on evictions, begin the legal process to remove the renter in question.
- It would benefit you most at this time to bring in either an Orlando property management partner you trust or a skilled attorney.
Handle Rent Collection in a Crisis Like a Professional
You aren't the bad guy by collecting the rent during a crisis. As a property management provider, we know that plenty of property owners are facing this crisis right now with their fair share of expenses and worry. The reality is that providing a safe home to your renters still requires funds!
When you work with Verandah Properties, you gain a partner that is here to help you handle rent collection—crisis or otherwise. We understand the need for compassion during financial uncertainty, and we also support our property owners by enforcing rent collection as appropriate.
We also offer access to our Collecting Rent in a Crisis Handbook for DIY property owners who are managing their response to the COVID-19 pandemic alone. Download your copy at no cost to you, and reach out to us here at Verandah Properties if you have any questions. We're in this together!