Tips for Collecting Rent During the Coronavirus (COVID-19) Pandemic
April rent payments were the first true test to see how the Coronavirus (COVID-19) impacted rent collections. So how did we do? Initial indications suggest not well. According to the National Multi-Family Housing Council, only 69% of tenants paid any of their rent between April 1 and 5, compared to 81% that paid in the first week of March 2020.
The reasons why there was such a drastic decrease varies. One factor is the economic impact the Coronovirus has had on the economy. More than 16 million Americans have now lost their jobs in the past three weeks, resulting in a record number of unemployment claims. Others include the impact of social distancing and renters’ inability to pay rent online, resulting in delayed payments.
Here are a few tips for landlords to consider implementing when collecting rent payments during the Coronavirus threat and help soften the rent payment disruption many are experiencing.
Provide renters with the ability to pay online with their credit card
Some renters physically can’t pay their rent in-person to their landlords or property management companies. Keep them safe by offering them the ability to pay online and avoid social interactions. Additionally, many won’t have the cash available in their accounts to write a check. Give your renters the option to pay their rent with a credit card. Free online services, like RentPay, give landlords the ability to collect rent online while offering renters the flexibility to pay using a credit card, debit card or ACH bank transfer.
Offer payment plans when collecting rent
The industry is accustomed to collecting rent once a month, typically on the first of each month. This is contrary to the cycle when most employees get paid — twice a month. Landlords should consider adopting collection cycles that align with when their renters get paid or allow renters to spread out their payments weekly for the next few months. These flexible arrangements, albeit not ordinary, might be a better alternative to not receiving any rent at all.
Offer discounts if rent is paid on time or in advance
To entice renters to pay on time or even in advance, some landlords are turning to discount rates when collecting rent. For example, landlords have offered a 10-20% discount off rent if the renter pays for the next two months in one payment. Others, like some landlords in Houston, offered gift cards if rent was paid early.
It’s no surprise that both landlords and renters are having to adjust to a new normal as we continue to fight against this pandemic. Short-term flexibility and optionality will likely play in landlords’ favors when collecting rent payments during the Coronavirus pandemic.
If you have any questions, please reach out to our Customer Service team at [email protected] or 866-730-7177. We’re here to help answer all your questions and make sure you can collect rent payments as safely and securely as possible during this uncertain time.