What do you do, when a tenant can’t pay up his rent in 2020? In this video I’ll describe our 4-step plan which we always apply when a tenant can’t pay the rent. Especially this year, this is very interesting.
Did you know that in 2019, only 2% of tenants would fail to pay their rent on time. And as landlords we would already dislike situations like these. BUT did you know that this year in 2020, 20% of tenants have that problem now. 20%! That’s like one family in every 5 properties you own as a landlord. What should you do then? Well, as being a landlord for almost a decade now, me and my wife we developed our 4-step process that we always go through, the moment a tenant is not able to pay the rent. And if you stay until the end, I even will show you our final emergency plan when things really get out of hand.
20% of tenants have difficulty paying rent in 2020
When tenants are in a difficulty situation, because of losing their jobs, or being quarantined at home. It is possible that people have difficulty coming up with money to pay for rent. In 2019 this number was only 2% of tenants, currently in this year, it’s 20% of people already. So, be prepared what we can do about this.
Step #1 Have a Plan
As a landlord, you should have a plan for such a situation, because it may happen to anyone. Not only to those who own many properties. If you have no plan, then it’s like trying to sail the seas without a direction. You’ll get somewhere… but you don’t know if this is where you wanted to be, or not.
Step #2 Empathize
Since tenants are still humans, they want to be treated, just like you want to be treated. And I totally get it that they are in a different situation as you are. But in the end, they are equals to you, so treat them the way you want to be treated. Listen to them, talk to them, and see what you can do, to help them.
Step #3 Rent is still Due
No matter the situation, in the end, it is also about you as a landlord, if you don’t get paid, you can’t pay for the property, causing you to lose it as well. So, do make clear, the rent is still due.
Step #4 Go through the Options
has the tenant tried all their options to be able to pay the rent? in most cases, they haven’t yet. so, just go sit together with the tenant, and see what other options they have to be able to pay your rent. or even loan money from others to pay you. there are more options than just their monthly salaries.
Bonus tip: the Final Emergency Plan
when all steps have been taken, and still there is no option. we offer our tenants our option. it’s the Pay Later option. instead of paying the rent now, they get a delay in payment, so they can get more time to pay for the rent, and it’s not that they would have to pay up right after a month or two, but the payment of the overdue rent, will be spread over the rest of the year. and there is no extra interest taken in from these people, because in the end. it’s people we’re talking about. and not about that one or two dollars extra. we make money passively already.
Why it is always People Over Profit
in the end, we believe it’s always people over profit when they are trying their best. we shouldn’t people horrible landlords just to get that one extra dollar. we want to be helping out families as well!