Most cities are entering month 3 of the coronavirus lock down, and almost all landlords are feeling the impact of the crisis. Has your collection been affected? What actions are you taking to improve it?
How has the COVID-19 crisis impacted rent?
There’s two primary ways in which the coronavirus pandemic has affected rent:
- Most businesses have stopped operations completely, which means that their incomes have stopped with them. Many commercial tenants are therefore unable to pay their rent and other expenses.
- With most businesses stopped, layoffs have increased which has impacted many residential tenants too. These tenants are unable to pay their rent either.
Commercial tenants are somewhat of a special case, typically governed by different laws aimed at protecting businesses in such crises. So we’ll focus below on how you can improve your residential collection.
Communicate with your tenants
We’re living in a period of uncertainty, so don’t leave additional guesswork to your tenants. Are you discounting this month’s rent? Tell them. Collecting rent as usual? Tell. them.
You’ll be surprised how many tenants have the means to pay their rent, but are delaying their payments in anticipation of a discount or rent waiver from their landlords. The longer this anticipation drags on, the longer your payments drag, too.
Communicating transparently with your tenants will ensure that payments are made on time, and will help you identify those who are truly in need of your support early on.
If you’re using Ajar, the message center is a great tool to share announcements with your tenants and receive direct responses back.
Make payment seamless
Country-wide curfews and limited services have made it difficult to access cash or deposit cheques for most people. Even those who do have cash might be more cautious about spending it. Make sure your tenants have a more convenient payment option that will remove any barriers they might be facing.
An online collection service like Ajar gives tenants the option to pay via debit or credit card, from the safety and comfort of their homes. Having a credit card option might even help tenants who are struggling financially still pay their dues on credit.
Support tenants in need
Many people’s livelihoods have been affected by the crisis due to lay-offs, delays, and reductions in salary payments. Your tenants might be unfortunately impacted, too.
Offer your support to these tenants, especially if they have a track record of consistent payments and are navigating a circumstance beyond their immediate control. Landlords were able to boost collection by up to 60% by giving a temporary discounts of 30% or more using Ajar. Supporting your tenants in this difficult time will also create good will that will have far bigger gains in the long run.
You may choose to give a discount on a case by case basis – that’s fine, too. Just make sure that your tenants are aware of this (communicate!). We also suggest requesting paperwork to weed out any tenants who might be taking advantage of the situation to decrease their rent dues.
Unsure of what discount to give? Download our infographic here to see how discounts improved landlords’ collection in the COVID-19 crisis.
Need a fast and seamless solution for collecting your rent? Join Ajar today.