The United States is currently facing a severe housing crisis, probably the worst that has ever been experienced in history. According to a memo published by housing policy experts, approximately 30 to 40 million Americans could soon lose their homes.
The crisis is not a result of the looming pandemic alone but has quietly been building up over the years. Due to strict zoning and building laws, there has been a severe scarcity of housing. Consequently, real estate prices have gone even higher.
The high prices prevent tenants from renting and buying homes in their localities. Instead, they move in search of places where there is a greater economic opportunity. On the other hand, landlords are hard-pressed to maintain their investments without sacrificing their tenants' wellbeing. This calls for the need to rethink their business and financial strategies.
Here's how creative landlords are surviving the crisis.
Link Tenants Up with Support Resources
Fortunately, many new resources are now available for people financially incapacitated by the pandemic. If you're a landlord whose tenants can no longer make timely rent payments, one way to help them is to connect them with these support services.
One resource is the 211 health and human services hotline. It is in place specifically for people in need, especially for rental assistance or food stamps. Through the hotline, people have received over $30 million in funding through donations, government grants, and CARES Act funds.
Pivot Short-Term Rentals
This is the time for landlords with long-term leases to consider short-term ones. Month to month or even weekly leases can help maintain occupancy of their properties during the pandemic. This arrangement also increases the odds of rent being paid on time. When landlords have multiple tenants, like in the case of Airbnb, they mitigate the risk of missing out on rent payments. The occupancy rate rises to as high as 50%, and this way, landlords can easily make ends meet.
Extend Incentives to Tenants
It has been challenging trying to attract new tenants during the pandemic. However, this is the period to extend hospitality to struggling tenants.
One way to do so is to offer rental discounts and bonuses with new lease sign-ups. If giving a discount can bring in a tenant, it's much better than having a vacant house at a higher price for months.
Platforms such as Piñata also help improve the relationship between a landlord and a tenant by promoting hospitality. Piñata helps renters earn rewards, save on everyday expenses and build credit for a more rewarding rental experience.
Lily Liu, co-founder of Piñata explains, "Piñata has been used to improve renter satisfaction and an out of the box solution to give rewards back to renters. This has helped to improve on time rent payments and reduce turnover."
Treating renters with hospitality keeps the renters who can pay on time well-motivated. Offering rewards or slashing the rent rates will make them more willing to pay. At the end of the day, the relationships landlords build with their tenants matter on humanitarian grounds.
Final Thoughts
The housing market is shaky, and being a landlord during this time can be stressful. However, with the right strategy, landlords can address and strengthen their relationship with their tenants. Creative solutions to the crisis exist, which will help improve the financial lives of both parties while preventing any further loss of rental income.
