COVID-19 has affected renters and landlords alike when it comes to rent payments and mortgage payments.
Survey results from a recent study conducted by Avail show that almost a third of respondents who are renters could not pay their full amount during August. This affected the landlords’ ability to make timely mortgage payments and thus creates a new load of stress in the market.
Renters’ current concerns include unemployment, lower income levels, and stress when it comes time to paying for expenses like rent.
The COVID-19 pandemic has caused many people to lose their jobs, which can explain why some renters are feeling more stressed about paying rent. Those that still have their jobs still have a hard time because between one third to one half of their income is going toward rent each month. When renters have a hard time making payments, landlords have a hard time making payments.
Both parties have started to find other means to assist them in paying rent or mortgages.
The survey from Avail showed that the first source renters are relying on is savings, followed by asking others for money, applying for government assistance, and finding another job. Results showed that some renters are even paying with credit cards, creating further financial stress. Landlords are also relying on savings accounts and government assistance, but they are additionally relying on adjusting rent payment plans or offering discounts on rent.
What is a Landlord to do?
In order to help renters, nearly 40% of landlords surveyed began offering adjustments to rent payments, either forgiving the first couple of months or changing the payment due dates. However, this doesn’t benefit the landlords or help them make their mortgage payments. While some are able to temporarily forego payments under the COVID-19 Government Cares Act, others are not so fortunate. 12% of landlords have already missed payments and are facing uncertainty for their futures.
What’s Ahead for Rent Trends?
Landlords are suggesting that either their income from rent payments will stay the same or will decrease in the coming months due to the pandemic. More and more people are becoming frustrated with the way that this issue has been addressed by the government, stating that if renters are forgiven for missing payments, landlords should be also. These are trying times for everyone because there is so little control over circumstances; this has made a huge impact on the real estate market.
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