2020

Countless Landlords Facing Dilemma Across the Nation

Landlord's Dilemma from Covid-19 Pandemic

California is setting the tone for the rest of 2020 and until February of next year as landlords across the U.S. are facing a grim reality. As the moratorium on evictions that was continued regarding the Covid-19 pandemic; non-paying tenants who are out of work are allowed to not pay their full rental amount and face little repercussion at this time. There are certain requirements that tenants must meet in order to be eligible for this protection however the reality is that this temporary band- aid will cause more harm than good on a large scale.

Landlords receiving rental payments of 25% or less from the their tenants will face serious financial hardship as many banking institutions are not offering the forbearance plans or repayment plans as expected by lawmakers. The inability of the politics to be mandated on banking institutions causes property owners to feel trapped from every angle.

As landlords struggle yet continue to pay the mortgage and continue to operate their investments property under the lease agreement; tenants sit back and wait until February. Will another relief bill be passed further crushing landlord's financials? This will create a snowball effect and in turn may end up in a catastrophic foreclosure wave of rental investment properties flooding the market. But wait, it gets worse!

Other factors that are difficult to overcome by the affected rental property owners

A landlord who is not collecting any income from their renters cannot use the cash flows from his/her investment property as an otherwise strong income source to purchase a new property. Owing more on taxes due to less tax deductions also increases concerns. How can this be fixed? There currently is no remedy in place. Should the landlord consider selling the property? This situation is a silent scream for help.

If it is time to sell, the affected landlord who is not collecting rental income cannot use the current rent roll and profit and loss to attract any prospective purchaser of the property. However, pro-forma financial projections or even last years financials may be convincing enough to stimulate an offer from a buyer.

"Are investors reluctant to purchase properties due to the current landlord restrictions? "

Real Estate Investors interested in purchasing investment property must do their due diligence regarding the situations of current tenants occupying the building. It may be better to obtain a property that is vacant during this time. If all tenants are not paying then how would this be a feasible investment decision? Current market value doesn't apply anymore and there is a costly future ahead. Stabilizing a property back to financial strength during this time of turmoil seems like a feat not even a property management titan could endure. You be the judge.

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Countless Landlords Facing Dilemma Across the Nation

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Countless Landlords Facing Dilemma Across the Nation

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Want to Know How Much Your Home is Worth?

Find Your
DREAM HOME

Featured
COMMUNITIES

What's Your
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