Navigating Eviction Moratoriums as a LandlordSep 16, 2021
Clip from a recent episode on investing in multifamily real estate during the pandemic and what it is like to navigate eviction moratoriums as a landlord. (watch the full episode here: https://youtu.be/PI02WfpIlOw)
They're also offering relief, which I think was huge. They said they set $50 million aside to help for the next year to year and a half for back rents and rents going forward to help the renter. Which I think then helps the mom-and-pop type of owner.
They were really the ones that I think we're getting hit hard with this, because most people were like, well, you still have to pay your mortgage. Yeah, but your tenant doesn't have to pay their rent. Well, how does that work?
Yeah, well, then a bunch of them mon pause. But especially the big national property owners, they went out and got a bunch of those PPP loans, right to help flow through any, any period of difficulty, but didn't I mean, Chase, we soon found out that, you know, tenants not paying rent that that was a very much a localized thing, wasn't it?
For Utah, it was just a short period of time. The thing I think about with this subject here is you try to put yourself in other people's shoes, right? You have the mom-and-pop or you have the investor that most likely has a mortgage and they need to make their mortgage payments.
They're counting on that tenant or that renter to pay their monthly mortgage and so on. They don't, that really could put them in a bad spot and get them in trouble. But then you also want to sympathize or, or think about that tenant or the renter that might be put in a bad situation laid-off fire sicknesses, we got a bunch of things going on. And you want to sympathize. They need that relief for that help as well.
And how are they implementing? When we talk about affordable housing, Section 8... That's all about where you're working out of the right county and local municipality because the money gets allocated federally, but it gets dispersed on the local level. And they're just some of them are good at it.
Some of them absolutely are not. We'll see how this goes with the rental assistance side of things. But, man, if you look at landlording, just the cold hard way. And this is hard because these are people's lives, right? I've had times in my life where the money's just not falling out of the sky. It's hard to make rent hard to make a mortgage. That's, that's tough for somebody.
I mean, that's a real person on the other end of this, but if we step out of that, we go okay, Bobby, Sue didn't pay rent, it's the fifth of the month, Bobby Sue has a problem pay up or get out. I mean, that's the black and white of it is insensitive as that sounds. The difference here wasn't Bobby Sue has a problem is we both have a problem. Right? The market just completely went haywire.
That high level of empathy that property managers had, well, you can't pay your rent, what can you pay? Let's work with you. And I helped a client analyze a rent roll the other day where one of the units, rent dropped off the table, right wasn't coming in. And then all of a sudden, three months later, it was but it was a little higher, dug into it. What was that? Oh, it was an abatement. They said don't pay for these three months, we're going to catch you up over time.
This turned out to work really, really well. Especially in some of these markets, where there are jobs where a tenant said I lost my job, or my pay has been really cut. I need some time to land. Right? Because what were you going to do? Right? Where are you going to rent? Now? It turns out, it turns out that's in the market. So we operate in just a shortage of rental inventory. And I think it's because of COVID-19 people coming out of places where they don't want to be and going to places where they do want to be that migration pattern.
I also think we hit that sweet spot too, with where the rents are, what attendants going to pay. I have noticed we try not to shoot to build something we could but we're not building a super nice a class building, where we need to ask 2000 3000 or more for rent per month. And we're not super low either.
We kind of fall right in between there. And so it's understanding the investment, your type of property that you're purchasing, and then what your tenants going to look like and what they need to pay per month and if they can make that payment.