Eviction bans have become one of the most controversial side effects of the coronavirus pandemic.
Cities, counties, states and federal agencies have all been toying with different eviction bans and moratoriums. Many landlords are upset and stressed out about it. Yet, while there is certainly a dark side to it from some points of view, there are some silver linings and even great opportunities coming out of it.
It’s good to help others. Especially hard working renters who haven’t been able to buy their own homes yet.
Blanket eviction bans may most notably be helping to prevent an immediate tsunami and financial apocalypse. Think mass homelessness and even more civil unrest. How good these mandates really work out all depend on whether they can be tapered off successfully.
As a landlord, if you can give them a break or a modification with an extension or temporarily reduced payments, some will be more appreciative and loyal than ever. It’s a unique chance to win customers for life. For most it is still lower cost, less risk and more profitable than replacing tenants or leaving your property vacant right now.
Sadly some tenants will just take advantage of this situation. They splurged stimulus money and unemployment benefits that were more than old wages on TVs and pools, cars, phones, clothes and parties – instead of saving it or paying the rent when they could afford it. Many will milk it even when they can pay. Now that some of that extra bonus money is ending and bills are due again, they might not have ability to pay.
Many landlords are going to have to try and wait it out until they can evict.
The ugly side is that property owners still have bills to pay. If not a mortgage, then utilities, property taxes, maintenance, insurance, management, and employees. Tenants aren't going to be happy when those things aren’t paid or handled. Most owners can't afford to cover this gap from their own personal finances for very long.
The result is downgrading quality of living, foreclosures, less rental inventory, higher taxes for everyone for the county and city to handle zombie properties and then rents going up. Worse is that this comes during a time when jobs and pay rates are going down.
This is one of those moments to turn distress into success. Those who are not financially equipped and experienced to be in this game need to sell their properties for anything they can get, just to get out of the mess. Renters need available spaces and good landlords. This is a chance to help both renters and other investors out too. There can be great financial rewards for doing that as well.
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