Updated May 2, 2022.
As a Seattle property management professional, we always recommend that property investors set the rental rate for their Seattle rental properties based on their unique rental analysis results.
As as provider of the best property management services Seattle has to offer, we also know that property owners need their rental payments on time every month to cover the operating expenses of their portfolio and provide some much-needed income. What happens when residents struggle to make that payment due to a collective crisis like COVID-19?
A financial crisis can force residents to feel like they have to choose between putting food on the table or paying the rent. However, rental payments are never an option. This is why helping your residents with payment plans can be a big help when the economy suffers. A payment plan can help residents get through a difficult financial time while ensuring that property investors are still able to meet the financial needs of their properties.
Here's how to set up a rental payment plan for struggling residents from the perspective of the best property management Seattle can provide. These tips can help property owners maintain the income they need for their Seattle home rentals while assisting residents through a tough economic time.
Please note: This article is not a substitute for legal advice, and was current at the time of its publishing. However, this situation is rapidly evolving. For up-to-date information and guidance, reach out to your Seattle property management partner.
Rental Payments Can't Stop
It can be a harsh reality that makes you feel like you're an insensitive property owner, but your residents still owe their rental payments for your Seattle rental homes—even during a crisis.
A signed lease agreement is a commitment from your residents to pay the rent—every month—while you provide a safe place for them to live.
Residents can experience job loss or financial challenges at any point during their lease term, but they're still required to pay the rent or lose the privilege of living in your rental properties.
However, during a universal financial crisis, it's appropriate for property owners to be flexible about rental payments. There's no need to give away free months of rent, but offering an adjustment to how your residents must fulfill their payment obligations can help you maintain good relationships with your residents while still collecting.
You Control the Plan
When a financial crisis strikes more than one resident, property investors can quickly lose a lot of money. Without rental payments, you might find yourself in a financial crisis of your own.
As part of the best property management Seattle can provide, we know it's crucial to develop a plan that works within the rules of your lease agreements—without putting you into a financial spiral for the sake of helping your residents.
How Much Can They Pay Now?
Start small (within reason). Residents should not have the option to pause payments until they can start paying again. They need to pay something—now—and commit to fulfilling the full amount they owe as outlined for the full lease term in the rental agreement.
On a case-by-case basis, talk with your residents who confirm that they need help. Talk with them about their situation and ask what they think they can pay now.
Offer to break up the rental payments into smaller amounts due weekly or twice a month, instead of the full amount due as usual on the same day every month.
Remind residents that reducing their rental payment now is a short-term adjustment. You'll also carry over the amount they can't pay now and add it to full payments later.
Paying less now then paying more later helps residents get through a short-term financial situation without short-changing property owners on the money you need to maintain your Seattle rental homes.
What Can You Afford Now?
Flexibility can go a long way in setting up a win-win situation for both you and your residents. However, as a Seattle property management professional, we caution you to make sure you don't reduce your residents' payments so much that you can't afford to pay your rental property expenses!
When property owners can't cover investment property costs, everyone loses. You'll default on a mortgage, and your residents won't have a place to live. From the perspective of the best property management company Seattle has to offer, we know that this ultimately spells disaster for our community.
Review your finances and consult with your property manager before finalizing a payment plan with your residents.
Make sure the plan works for you as well as providing some relief for your residents.
Approach your plan with compassion while understanding it still has to be able to cover your overhead.
Stay Firm—Yet Compassionate
You never want residents to choose between writing their rent payment check or providing food for their families. However, it's not your responsibility to make sure your residents have the finances they need to cover the rent.
Offering a payment plan is a show of compassion and helps build good relationships with your residents.
When residents feel like property owners value having them in their properties, they can be more willing to work with you on a reasonable payment plan.
They might also be more willing to renew their lease when they know they have an empathetic landlord in a crisis.
As a gesture of kindness, property owners can also direct residents to local resources for additional help during a crisis.
When you set the payment plan rules and stand firm on the expectations, your residents can also take advantage of organizations offering food or rental assistance to free more of their funds for the adjusted payment plan. As the best property management Seattle has to offer, we're always looking for these kinds of wins for the property owners we serve.
Seattle Property Management Works With Struggling Residents
Owning Seattle home rentals can be challenging when a crisis hits. Working with a Seattle property management professional to handle rental payment plans not only protects you and your renters, but it gives you access to the additional skills and resources your property manager brings to the table.
Real Property Associates is here to help DIY property owners work with your residents and set up payment plans that help struggling renters while protecting your income. Learn more about how we handle challenges during a disaster with a free copy of our Collecting Rent in a Crisis Handbook!