The rapid spread of COVID-19 and its associated shutdowns, quarantines and restrictions has caused a ripple effect of economic uncertainty throughout the United States and abroad.
If you’re a rental owner, you may have tenants temporarily out of work and unable to pay rent.
But it’s also a very difficult time to find new tenants, in the current unpredictable labor environment.
If you don’t want to go through the hassle of evicting tenants, you have a few options as a rental owner.
Try these 3 options before evicting tenants
You probably have some tenants who are nervous about how they will pay their rent. Finding someone else to move in isn’t a great option during a time of recommended social distancing.
Here are a few ideas to benefit both you as an owner and keep your tenants happy in their rental unit.
- Do you know of any tenants who are skilled tradesmen? If you are willing, you could trade their services for rental payment. Ask if your tenant would be willing to help fix problems in rental locations. It’d be helpful to find a plumber, electrician, a carpenter, etc. Your rental units are improved in value, and your tenant can barter their skills for rent.
- As a rental unit owner, you can write off all the uncollectible debt from the tenants that aren’t able to pay. Be sure to over-communicate with each tenant by phone or letter, preferably both. Set your expectations in clear terms, and make sure they are understood.
- Alternatively, you can write off a portion of the uncollectible debt (half or a set amount) and use the remaining half of the rent to be spread out over the remainder of the lease agreement. For this option, you will need to consult with your attorney to make sure you don’t have to sign an amended lease agreement or a change agreement (based on your physical location).
While we all know we are living in unprecedented times, we have an opportunity to show the best of our humanity to each other. Reach out to your tenants. Let them know that you understand their anxiety. Make plans now to be proactive, instead of waiting for rent to come in that can’t be paid.
If you have any questions on how to handle the tax implications of your rental unit management, reach out to the experts at Morgan & Associates. We can schedule a phone call or video chat to talk through your options.