Have rent prices been affected?
Based on our extensive rental experience throughout the South Shore, we are happy to say that rent prices have remained stable throughout this pandemic. What has changed is the potential renter pool and availability of units. As many people were out of work for an extended time, many tenants who had planned a Spring move, decided to remain in place. Additionally, because many people were unemployed, the availability of high quality renters was diminished. Despite these unprecedented circumstances, 3A Realty Group continued to show, and place many applicants throughout the Spring. Now that we are into the Summer market, we have seen a surge of inventory for rent and potential renters. The good news for landlords: If your property is priced appropriately, we will be able to fill it for you in a reasonable time frame.
MANAGING TENANT FEARS
Physical health for your and your renters should be your number one objective. We have found that landlords that are working with their tenants to ensure they are safe while showing compassion for each individuals challenges during this time has created better results for landlords and payment of rent. Landlords, particularly those with multiple locations and many tenants, should try to be as consistent as possible (understanding that various municipalities have adopted differing approaches) when communicating with tenants and attempting to address tenant concerns.
The best thing that you can do to help your tenants to manage their fear and anxiety about the pandemic affecting the world is to help them get educated and provide them with helpful resources.
Creative approaches to receiving rent
While some tenants have announced closures and plans to withhold rent, other landlords and tenants are seeking more creative approaches that would provide short term relief, but avoid placing the entire burden on the landlord. These include:
Rent Holiday: Deferred payment of rent for a short period (e.g. 1 to 3 months). Tenant could repay the deferred amount by spreading out smaller payments during the remainder of the lease term. Alternatively, the lease term could be extended for the same length as the rent holiday and tenant could repay the deferred amount at the end of the extended lease term.
Rent Reduction: Payment of reduced rent for a short period. The reduced rental amount could also be repaid by the tenant in the same manner as described for a rent holiday.
Security Deposit Application: Application of tenant’s security deposit toward upcoming rent payments without a requirement to replenish the security deposit until the crisis abates.
Guaranties: Deferred payment of rent in exchange for a guaranty of payment in the future. Be sure to get in writing.
Partial Payments: Invite your tenant to pay in partial payments weekly, rather than monthly.
As of today, COVID doesn’t seem to be going anywhere so we recommend having a plan in place to prevent loss of rent should we have another surge in the Fall. We are here to help you find creative solutions to your leasing endeavors, please don’t hesitate to reach out if you need to discuss.