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Managing Rentals During A Pandemic



MANAGING RENTALS DURING A PANDEMIC


Managing multifamily rentals during a pandemic can be challenging. As a property owner/ manager you are faced with protecting your investments and preventing the potential loss of your property while also being sensitive to the hardships faced by your residents.


While multifamily has been more recession resistant than other asset classes, it is not immune from the effects of the pandemic. If you are a new or first-time investor this may deter you from even getting started. With a few practical strategies you can minimize risks associated with investing in multifamily and continue to grow your portfolio. Here are a few tips that can help you succeeds as a multifamily owner during this pandemic.




Update Your Budget Projections



Anticipate increased vacancy. Due to financial hardships faced by residents there may be increased economic vacancy as loss of income or concerns over loss of income may lead residents to default on their rent obligations. There may also be increased physical vacancy as responsible residents may move out when they realize they are no longer able to afford their units. It may also take longer to lease units in markets that are harder hit by the pandemic. Account for this increased vacancy in your monthly and annual budget.


Increase your reserves account. Profit that typically would have been paid out to owners of the property should be reallocated as feasible. This will provide additional buffer for economic vacancy/ defaults should they increase. Refinancing if possible, may reduce your debt service allowing you to put more capital towards reserves and preventing you from having to sell your property at an inopportune time.


Depending on the size of your multifamily property you may have to include additional line items for PPE and sanitization. The larger the property the higher the chances of this. If there are common areas that you wish to remain open, you can have residents sign waivers prior to usa