The COVID-19 pandemic caught most people by surprise. Landlords who did not have a plan of action to manage the health of their investment through a time of crisis found themselves facing unnecessary uncertainty and hard decisions. The good news is the stimulus payment provided by the CARES Act helped a lot of Americans in tough positions, and rent payment percentages were much higher than people were expecting in both April and May.
As an expert in Arlington property management, we were understandably grateful that both the property owners we serve and the great people living in their great spaces made it through the early days of the crisis safely. Still, some rent did not get paid—and with an eviction moratorium in some places, we can see that having a crisis plan is a smart decision for landlords. Who should have a crisis plan—and what does that look like for Arlington property owners? We'll cover that concept in this blog.
A quick note: This article is not intended as legal advice. However, it can be a great introduction to steps landlords can take to remain successful during times like these. If you're facing a situation that requires legal counsel, work with a competent attorney or get in touch with the Arlington property management experts at RentSimple!
What Landlords Should Have a Crisis Plan?
Every Arlington landlord should have a crisis plan—it's just a good move for you, your business, and your community. Whether your investments are right here in Arlington, the West Coast, or the midwest, there are events that can disrupt every business at every scale. Don't just think of a crisis plan as a way to manage a crisis: consider the ways in which you can avoid them entirely.
What Should a Crisis Plan Include?
Take some time to think about what could create a crisis for you or the great people living in your great spaces, and build plans for these scenarios. While something may not constitute an emergency for you, if it does create significant issues for multiple renters, then it becomes your crisis by inheritance.
Flash flooding is something we face here every year in Arlington; tornadoes are common as well. Take some time to outline what you and your tenants need to do in the event of these disasters. Thinking about it now will save you the trouble of planning for recovery during the stress of the event itself.
- If a tenant is a victim, who do they contact—and when?
- What should they document for their renters insurance (and in general)?
- Do they have the knowledge they need to turn off gas, water, and other utilities should they need to?
The COVID-19 pandemic caused the second recession of the 2000s (so far). Many Americans were still recovering from the effect of the first great recession and probably didn't have their own disaster plan in place for the one caused by the pandemic. Nearly half of the jobs lost during the pandemic are assumed to be lost for good.
Landlords with a single property may have fared just fine, but property owners with multiple rental homes probably have at least one otherwise good tenant that is on a payment plan or struggling to make the rent altogether. Ensuring you have the savings or the cashflow necessary to withstand losses in rental income should be a part of every smart landlord's disaster plan.
While every landlord should have a plan for this, the reality is many rental property owners didn't intend to become one. As your Arlington property management partner, we know this means you may not have been prepared to float a second mortgage for months while evictions are suspended. This hits home hard if you don't have a crisis plan in place and a stockpile of savings to provide you with a financial buffer. As we enter our phased reopening in Northern Virginia, now is the time to start developing that buffer.
Evictions are every landlord's nightmare. While some are rather straightforward, there are too many variables involved to assume you'll know how it is going to go. Again, stressful times can make the most organized person make mistakes. If you're not working with an Arlington property manager who can help you navigate evictions, it would be a good idea to create an evictions playbook, so you already have your plan of action documented and ready for use.
Evictions can be tricky: if you don't handle them properly, you can risk failing to successfully evict and find yourself in a worse position than you were pre-eviction. It's also worth consulting your Arlington property management partner about whether or not evictions are even currently legal.
Work With a Property Manager
In addition to collecting rent and handling relationships with your renters, property managers are experts in pretty much everything property related. Many property managers are in the industry for more than a career: they own a portfolio of rental properties they professionally manage as well. They've seen it all and know what the best course of action is based on the breadth of the experience they have.
As part of their responsibilities to their owners, professional Arlington property managers engage in continuing education through professional associations such as NARPM, the National Association of Residential Property Managers. This education means your assets are well maintained—and a plan of action already exists for every disaster you can imagine.
Working with an Arlington property manager is a good investment that saves landlords time and stress. You can get back to feeling confident that your great spaces will be maintained to the highest standards—so that you can create lasting returns. Get started by requesting a free rental analysis so you can see how much you could be making on your property!
If you're not ready to let a property manager take on the work for you, you can download one of our free resources for landlords. An excellent starting point is our Collecting Rent in a Crisis Handbook to work on preserving your rental property now.