Salt Lake City Property Management Insight to Guide You in a Crisis
Whether you're new to being a real estate investor or you're growing a substantial portfolio, a crisis can catch you off guard. When Salt Lake City investors aren't prepared to weather the storms of property investing, they risk losing income and long-term wealth.
When compared to other ways to invest or build a financial future, real estate is a stable way to meet your lifestyle goals. However, real estate isn't completely 'crisis-proof.' As we've seen with a recession, property owners can struggle financially when renters also struggle to pay the rent.
Learning how to navigate a crisis and come out well on the other side starts before a crisis comes along! If the recent recession caught you off guard, it's time to take action and prepare for the next time you face a pivotal moment as an investor.
A crisis can take any shape or form: you never know when another widespread crisis will impact the finances of your renters. Even with safety precautions and protections in place, you can't avoid the potential of a fire or act of nature destroying one of your rental properties. How will you continue operating as an investor and collect the rent on time during a crisis? Follow these tips from Salt Lake City property management!
Preparation Is a Priority
It might not be fun, but preparing for the possibility of a crisis is one of the smartest things you can do as a Salt Lake City property investor. Making crisis planning a priority will help you stay successful during a crisis while minimizing the short-term impact (and long-term implications) on your financial goals.
Whether you start small by turning your house into a rental instead of selling or you've recently added another property to your portfolio, you need a plan to navigate a crisis when your business can't operate as usual.
- Property investors depend on rental payments from residents to be successful.
- When a crisis causes job or income loss for your renters, that loss trickles down to your monthly income.
- The expenses required to operate your investment property business don't go away when renters struggle to pay the rent!
A Crisis Plan Helps Investors Manage Cash Flow
Investors have to prioritize paying the bills every month, much like renters must prioritize paying the rent to continue living in your property. When renters struggle to make their payments during a crisis, Salt Lake City investors need a plan to help manage shortages to their cash flow and cover rental property expenses.
Investors must also manage their renters! During uncertain times, renters have questions and concerns about rental payments and the services you provide as the property owner. Having a plan in place helps investors act quickly when a crisis happens.
An excellent crisis plan can sit on your shelf until you need it. Then it's an easy plug-and-play solution when it's time to put it into action! Make sure your plan includes:
- A communication strategy to alert residents to operational protocols
- Adjusted processes for providing maintenance services and collecting the rent
- Changes to how you work to continue providing excellent services to your residents.
You become the voice of calm and certainty when uncertain times threaten the finances of your residents. When you lead them through a crisis with a well-thought-out plan, you instill confidence in your residents that you'll all get through tough times together!
You also protect your income from severe losses. Payment plans and empathy will go a long way to maintain good relationships while ensuring you receive some form of rental income to cover rental property expenses.
Renters Need Maintenance and Payment Plans
Keeping the lights on and paying the bills are two of the primary essentials when managing your rental properties through a crisis. Residents need safe places to live—and they also need to pay the rent!
Manage Maintenance Expectations
Your responsibility as the property owner is to find ways to respond to maintenance requests and perform routine maintenance as crisis conditions allow. Residents might need to adjust to different crisis maintenance protocols during the short-term, but your communication plan will reassure them that you'll take care of all requests as soon as it's safe to do so.
Make sure you handle every emergency request promptly! Keeping residents safe and secure during challenging times helps protect you from lawsuits while showing renters they are still a priority.
Payment Plans Help Investors Collect the Rent
While you uphold your responsibilities as the property owner, residents must comply with their obligations, too. The lease gives investors all of the support they need to continue collecting the rent on time during a crisis. However, if renters are suffering from job or income loss, investors will find it challenging to enforce rental payment collection.
The rent is still due every month—but Salt Lake City property investors can make it easier to collect the rent when offering payment plans to struggling residents. If a renter is truly suffering financial hardship during a recession, your compassion and flexibility with rental payment options help your renter—and your income!
'Some' Is Better Than None
If the idea of payment plans and losing income during a crisis is difficult to consider, remember that receiving 'some' income is better than 'no' income. If a renter can't pay their full rent amount, work with them to see what they can afford.
Not every resident will need a payment plan. For Salt Lake City renters who can still pay their full rent amount, there's no need to offer a plan to collect less rent! However, for residents who need help to cover the rent and put food on the table until they recover their income, a payment plan can be an excellent solution.
When creating payment plans:
- Work within what struggling residents can afford to pay each month through the duration of the plan
- Make sure you can afford the lower rent amount without depleting your cash reserves
- Document the starting and ending dates of the adjusted payment plan.
Remember: payment plans are short-term solutions for financial assistance. Renters pay less rent now, then pay more rent later to make up the unpaid amount before the lease term ends.
Care for Renters in a Crisis
Showing renters that you care helps you build lasting relationships. You don't have to care for your residents like friends or family, but responding to a crisis with empathy and compassion helps them feel like they have a home—rather than just a rental unit and a property owner who demands the rent despite the circumstances.
How you handle renters during a crisis can either help you build lasting relationships or send renters looking for the door as soon as their lease ends. Payment plans and consistent communication when times are tough help Salt Lake City renters feel valued enough to renew a lease! They'll also spread the word about a compassionate property owner who treats residents with care and compassion.
Beware the Scammers
While your carefully-screened, quality residents will respond in positive ways throughout a crisis, bad renters and scammers will also try to take advantage of your kindness.
- Keep careful documentation about renters who refuse to pay the rent (even though they can) or break the rules in their lease agreement.
- When the crisis ends, and evictions can resume, consult your lawyer and Salt Lake City property management to remove bad renters.
- Maintain your careful screening process to avoid placing 'Professional Tenants' in your rental properties.
Scammers and bad renters love to take advantage of a crisis! Even with modified crisis protocols, stick to your best practices for screening residents and enforcing the rules.