Monday, September 28, 2020

QUESTIONS POTENTIAL TENANTS MAY ASK AMIDST COVID-19

 


COVID-19 and Your Tenants

The COVID-19 situation is complex and fluid. Different states and municipalities often announce new measures. It is important for landlords and property managers to stay up to date with official announcements, so they can answer the questions potential tenants may ask while the COVID-19 restrictions are in place. It pays to have a written list of answers to potential questions available to help people feel comfortable, and to know they are dealing with professional they can trust. This list of 8 questions will help you to consider how to answer the common ones.

1. How are you helping to keep your tenants safe from COVID?

General questions are to be expected. Most tenants either work or move in public places. Different organizations have different rules, standards, and requirements for people to follow.  If it is a multi-unit building, you will have standards in place for, say, elevators, corridors, laundry facilities, etc. Be ready to provide written guidelines and to answer any follow-on questions.

2. What if I lose my job and can't pay my rent?

Decide whether your standard lease conditions for non-payment and eviction notices are in line with Federal, State, or local policies. If not, explain what they would be after the COVID-19 restrictions end, and what they are during the pandemic.

3. If I do have a money problem will you accept partial rent, and how do I make up the arrears?

Explain that the lack of rent payment must be directly linked to a COVID-19 issue, that you will discuss the specifics in terms of why the rent cannot be paid, how long the problem may last, how high the arrears may be, and what your policies will be for paying them off. Ask the tenant how likely this could happen, and is there a way for them to put money aside in case it does happen.

4. Can I be evicted if I can't pay my rent?

Clarify the standard lease policy, then say how any current legislation does or does not protect a tenant against eviction for non-payment. If you have a "late payment" or "short payment" program, explain it. Add that evictions for other matters, such as damaging property, causing problems with other tenants, etc. are still in force.

5. If I lose my job and have to move away or can't pay my rent, can I break my lease without penalty?

Know your state and municipality's laws or executive orders on this topic. Give the "official" answer, then explain how the particular lease conditions would apply if they are different.

6. If I'm worried about COVID-19 exposure, can I prevent anyone from entering my unit?

Maintenance, repair, bug treatments, etc. are reasons for someone to enter a rented unit. Have your policy in place, and answer the question accordingly. Having a printed, standard process you can hand out will help the tenant to understand that you have already addressed that (and possibly other) concerns.

7. Will you tell me if a neighbor gets infected with COVID?

This is a privacy matter. Landlords and managers are not permitted to give out such information without permission. Tenants should take all necessary precautions themselves and follow the guidelines for masks, social distancing, etc. to keep themselves safe.

8. Can you prevent me from entering the building if I have COVID?

No.

Final Comment

As a landlord, you are ready to answer potential tenant questions about most things. COVID-19 questions are just one more topic. Check with your state and municipality for further information, and give your potential tenants contact details, so they can learn and confirm things for themselves.

Is it Smart to Refinance Your Rental Properties Now?


There is a lot of media buzz going around about being the right time for refinancing, but is it the right time to refinance multiple properties? "The best time to refinance your rental property is when the value of the property is high and interest rates are low." There are other factors to consider.

Importance of Having Liquid Cash On Hand

Other than having actual cash in the bank, "liquid assets are things you own that can be quickly converted into cash without losing value."  Whether you own one or multiple rental properties, without full-time occupancy, expenses can quickly result in a negative return on investment. 

Impact of Economic Downturns 

As our country appears to be slowly recovering from the COVID-19 economic crisis, it's vital to understand how this impacts you as a real estate investor. 

  1. The Negative Impact on Cash On Hand
    1. You may have to lower rental prices.
    2. You may end up with vacancies or non-paying renters. 
  2. A Positive Impact from Cash On Hand
    1. There could be opportunities to acquire additional rental properties. 

Home Improvement Loans Should Figure into the Decision

If you're going to take advantage of refinancing a property, you may want to figure in cash for home improvements to increase the value of your property. While cash-out refinancing may be a good idea, it's an even better idea to understand all of your options to make the right decision for you and your properties. 

Considerations in Refinancing Multiple Properties at the Same Time

"Refinancing could be the best idea for some, but that doesn't mean it is ideal for everyone." By having one lender you trust to handle all of your properties, they can help you determine "if it is better to refinance the homes separately, or if it's better to refinance them all at the same time." 

With limits on the number of mortgages you can carry, you may be setting yourself up to miss out on acquiring new ones. Along with missed opportunities, there is more to factor into your decision-making. 

  1. "It may be better to pay down one loan more than the other in order to get the best rate and/or terms."
  2. "You will typically need a higher credit score than if you were financing just one home."
  3. You may also "need more equity when financing more than one property."

Interest rates should not be the only driving factor in refinancing your rental properties. With professional evaluation and guidance, you will have the information to determine when is the right time to refinance your properties, whether one, two, or all of them at the same time.