Payment Deadline
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In the wake of Coronavirus, many people worried about how their going to make their next housing payment. However, in particular, a new survey from Cleaver Real Estate shows just how precarious the situation is for landlords and tenants, many of whom have found themselves on opposing sides of this issue.
Read on below to get a what today’s rental landscape looks like, as well as to find tips on what to do when paying rent becomes a major cause for concern.
According to the survey, 25% of renters are struggling to pay their rents
In these times of high unemployment and economic uncertainty, many people will have to fall back on savings at some point to get by. The problem is, however, that most renters lack sufficient savings to do so.
In fact, Cleaver’s survey found 46% of the renters surveyed have less than $500 in savings, far less than the average rent – which was $1,100 in 2018, according to the most recent numbers from the Bureau of Labor Statistics. An additional 11% said that they don’t have enough savings to cover a full month of expenses.
Given that data and the fact that 25% of the renters had already lost their income due to the virus at the time of the survey, it’s not surprising that one in four renters also reported that they’re struggling to pay rent.
Beyond that, nearly 40% of renters say their worried about evictions Even though, in addition to the protections under the CARES Act, many U.S. cities have put a temporary stop to evictions, renters still find themselves worrying about the possibility.
The survey found that only 11% of renters surveyed had worked out a reduced or suspended rental agreement with their landlord. An additional 13% said they hadn’t paid rent for the month, despite not having a temporary rental agreement in place.
Tips for how to proceed when paying rent becomes an issue
In an effort to help both landlords and tenants who are struggling due to tenants’ inability to pay rent, Cleaver’s CEO, Ben Mizes, who also happens to be a landlord, shared some advice.
For landlords
First and foremost, Mizes advises calling your lender to ask for a temporary forbearance on the mortgage. Then, reaching out to your tenants to come up with a payment arrangement that works for both parties.
“We’re all in this together,” he says, “so think of solutions that are ‘win for all’ and not just ‘win for the landlord’. I’ve seen a lot of landlords have success offering a few months rent-free, but increasing the length of the lease or increasing the price a bit to cover the free months once the tenant has income again. “
For tenants
For tenants, Mizes offers similar advice. He advises talking to your landlord as soon as you realize that you’re not going to be able to pay rent in order to come up with a payment plan.
However, in addition, he suggests looking for ways to come up with supplemental income, such as filing for unemployment and cutting back on miscellaneous expenses.