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How to Protect Your Rental Income During (And in the Aftermath Of) the Pandemic

It’s no secret that COVID-19 has affected the bottom line of many hard-working Americans. If you own residential rental properties, you have probably experienced this first-hand if your tenants have struggled to pay rent or if you’ve had a hard time filling vacant units. Fortunately, there are some steps you can take to protect your rental income not just during the pandemic, but as the world begins to slowly return to some semblance of normal.

Offer Payment Plans to Tenants

Many tenants are having a difficult time paying rent, especially if they have been furloughed from their jobs as a result of the pandemic or have had hours cut. If this is the case with any of your tenants, you may be understandably worried about how you will collect your rental income.

This is where it can be wise to begin offering payment plans to tenants who are struggling financially. In doing so, you can ease some of the financial burden on your tenants while ensuring that you receive at least some of the funds to which you are entitled.

Screen New Tenants Thoroughly

One of the biggest mistakes landlords are making right now is rushing to fill vacancies in their rental properties without properly screening their prospective tenants. The problem with this is that you could end up with tenants who don’t have sufficient income or even a reliable job to pay rent. This means that not only will you lose out on rental income, but you may even end up having to go through the drawn-out (and expensive) eviction process. Even though you may be eager to fill vacancies in your rental units during this time, proper screening is actually more important than ever.

Direct Tenants to Resources

With so many Americans struggling financially as a direct result of the pandemic, the government has made many assistance programs available. Some of these even include rental assistance. Take some time to research these options for your tenants and point them in the direction of these resources when appropriate. From the Housing Choice Voucher Program to unemployment assistance, there are plenty of resources available to those struggling.

Fill Vacant Units Remotely

Even though more people are getting vaccinated, many people are still hesitant to go out in public. This may make it difficult to fill vacancies in your rental units unless you’re offering virtual tours, digital lease signing, and other means of finding and approving new tenants remotely. Make sure you’re posting detailed listings of your vacant units online and accepting lease applications digitally as well. When tenants are approved, you can even collect rent and security deposits online to make things more convenient for everybody.

By taking the right measures, you can protect your rental income even in the midst of the COVID-19 pandemic. For more financial assistance as a real estate investor, reach out to our team of Arizona hard money lenders today by calling (480) 470-8594. We offer a number of loan programs and other options to help fund your next real estate investment quickly, easily, and remotely!

Image of Commercial Real Estate Buildings in Arizona

As Arizona Begins To Re-Open, What Should We Expect From the Commercial Real Estate Industry?

The ongoing coronavirus pandemic has fundamentally changed the world as we know it. As countries around the planet began to shut down, states within the U.S.A.. followed suit. While each state followed its own set of guidelines, the country as a whole experienced a cumulative economic downturn. Now, months later, the state of Arizona is beginning to re-open as life returns to some semblance of normalcy. Unfortunately, life will be anything but normal for the commercial real estate market in the weeks, months, and potentially even years following COVID-19.

Understanding the Impact of COVID-19

While much has been made regarding the discussion of COVID-19s true impact on the country, it is hard to ignore the economic fallout that has taken hold in Arizona’s commercial real estate market. According to a vacancy report detailing post-COVID office vacancies, Arizona’s business sector is sporting Great Recession-levels of vacancy rates within traditional office buildings. A report compiled by the team at Costar projected that vacancy rates in commercial offices will remain between 11% and 15%. Seeing these numbers and understanding their impact are two different things. While only a sliver of the picture, this vacancy number gives us plenty to digest.

Let us briefly chart a few primary ways that the commercial real estate industry in Arizona will shift for the foreseeable future. As the state of Arizona continues to re-open, these expectations should be held for the commercial real estate industry:

  1. Space Requirement Changes – Living in a post-COVID world means acclimating to the new normal. Social distancing, sanitation, and large open spaces will dominate commercial property in the coming months and years. As OSHA and HR reps around the state adjust to these new regulations, expect businesses to need larger spaces for the same amount of work.
  2. Equalizing Rental Rates – As individuals struggle to make ends meet, there is an expectation that rental rates will reach an equalization factor. Landlords who are not beholden to debt or lenders that are offering amenable rates will do what is possible to keep their buildings fully staffed. As landlords compete to retain the best tenants, there is an expectation that flexibility in lending and renting can be met.
  3. Changing Operational Expectations – Industries that rely on call centers will also experience rather large changes in the way that they perform in the post-COVID world. Call centers will be expected to split shifts to reduce the footprint of their employees. Buildings will be reorganized and adjusted for CDC and OSHA regulations which could include the installation of filter systems, sneeze shields, and other sanitary safety measures.

While there is no telling exactly where Arizona will be on the other side of the COVID-19 re-opening, it does appear that the state is primed for a healthy launch. Arizona sports a warm and dry heat thanks to its geographical location. With plenty of room for potential land development and a healthy infrastructure for commercial construction, Arizona is in a primed position to succeed.