When the gravity if COVID came into focus, landlords faced an uphill battle to keep their passive income flowing. The value of our property managers have never been more underscored than the past year and a half . Property managers were passed the task of not only keeping tenants stay safe but keeping passive income flowing and our doors open. Though there is a light at the end of the tunnel as we are seeing 2021 end, in this blog we look at the daunting challenges property managers faced in 2020-2021 and how they kept real estate businesses alive. The people who have kept our tenants safe and businesses alive. Let’s dive into the challenges faced by the men and women who keep our businesses running.
Job loss And The Rent Memorandum
By the time April 2020 came around, the unemployment rate had reached 14.8%, its highest point since 1948. Participation in the Labor force declined down to 60.2%, a low not seen since the 70s. With the mandatory lockdowns and closure of non-essential businesses, renters were forced to triage their spending and overlook the rental payments in hopes the government memorandums would allow them to stay until the economy rebounded. By the time January of 2021 entered, nearly 10 million people were behind on their rental payments, accounting for nearly 20% of renters in the US.
What did this mean for Homeowners? It meant that the steady flow of monthly rental checks, and the dream of stable passive income came to a screeching halt. For some, it meant not only no rental income, but now homeowners were left with multiple mortgages, city taxes, and essential home repair bills that still needed to be paid. Though the rental checks stopped, landlords still had a responsibility to the people they allowed to stay in their homes.
Finding Ways to Keep the Income Flowing
During the height of the pandemic and the eviction memorandum, property managers were faced with a major dilemma: how do you keep your client’s business and their own afloat. Due to the COVID pandemic, nearly one third of small businesses closed its doors, which accounts for nearly 200,000 business above the yearly average. Property managers were faced with a new dilemma: how to keep their own business running all while keeping their clients cash flow coming in.
Assessing Tenants Needs
Property Mangers like James C. Dailey Property Manager and Co-Owner of Coakley Realty Management LLC chose to assess their tenants needs by an individual basis. James reports that “During the eviction ban and throughout the COVID shutdown, our number one priority has been to keep our tenants safe and deliver good service to them”. James worked collaboratively with his clients to keep them in their units, whether that meant getting tenants on a payment option or rent abatement.
Taking Advantage of Government Programs
Companies also took advantage of government programs aimed at assisting renters and owners. In states like Michigan, programs like CERA (COVID emergency rental assistance) worked to cover the cost of past rent and utility bills. Renters who qualitied for this program would receive government funds to cover past rent and future rent. Programs like this cast a lifeline to tenants and landlords to get through a difficult time.
In total, the US government allocated $46 billion dollars in rental relief available to tenants. However, one of the biggest challenges with these programs have been that many tenants don’t know these programs exists, some aren’t tech savvy enough to complete the necessary online application or don’t qualify for the program due to proper documentation. Managers bridged this gap not only by letting tenants know these programs exist but assisting in suppling documentation and walking tenants through the application process.
Maintaining Regular Maintenance
The pandemic isolated a lot of residents as well as the whole country. Supply lines and materials skyrocketed during this time. Lumber prices alone rose 377% in just one year. Property managers had the daunting task of maintaining properties and commercial properties while competing for limited resources. Coakley Realty Management LLC reported that a HVAC replacement, which usually took only a few days, could take weeks during the height of the shortages. Management companies had to remain resilient with acquiring what their clients needed and anticipate future shortages.
Keeping Tenants, Homeowners, and Employees Safe
Though the virus shut down most interpersonal contact, there were plenty of duties still on the checklist both large and small. Repairs still needed to be done, units still needed to be leased and regular cleaning needed to commence all while being compliant with CDC guidelines. This posed an even greater challenge for large complexes that had to have an onsite manager.
Many managers found themselves separating essential tasks such as heat and electrical outages from the non-essential tasks like painting and general cosmetic repair. In some cases, onsite managers had to maintain their properties remotely.
Some larger properties, like apartments managed had common spaces like, workout and recreation rooms. Many managers found themselves shutting these places down to slow down the spread of the virus. Additionally, all the benefits of having an onsite manager dwindled when they were forced to work remotely.
Taking An Active Role in Disseminating Vital Information
Some companies took an active role in aiding tenants with the pandemic. Leonard Ang, CEO of iPropertymanagement would ensure their tenants were as safe as possible by passing out flyers informing tenants of the nearest testing facilities. When the vaccine became available to the public, Leonard made sure these tenants were well informed where they could receive one.
There’s So Many People Thank out there…
There you have it! The top ways property managers carried property owners and tenants through the daunting events in the past year and a half. Now I’d like to hear from you! Do you have a personal experience from your property manager? Maybe you have had one go above and beyond what was expected from them? Or maybe you are a manager who had other creative ways of helping clients and tenants. Drop me a email and I’ll feature it in this blog or a future one.