We are facing an eviction avalanche. Every year in the United States, about 3.7 million evictions take place, according to Matthew Desmond, principal investigator of Princeton University’s “Eviction Lab” project, which tracks evictions. Because of coronavirus and the massive loss of jobs, today, 28 million are on the edge of being homeless.
The CARES Act expired on July 24th. The legislation gave renters a 120 day grace period from “fees, penalties, or charges concerning nonpayment of rent” and barred landlords from filing eviction notices of any kind during that period.
An Eviction Avalanche
Investors make occupancy of all their rental units a primary priority to maximize their cash flow. Vacancies have a cost. When you buy a property, you start with a rough draft of your financial plan, factor in the vacancy costs and determine how much you will need to charge each month to make up for these costs and any other expenses that may come up when owning the property.
In keeping track of vacancy costs, you can also prepare ahead of time before you know a property will be vacant to start marketing a rental in the area to potential tenants. If you know a lease is about to expire in a month or two, you can begin forming a game plan for advertising the property using different outlets and deciding whether to make minor renovations to get the place move-in ready for the next occupants.
COVID 19 has thrown all those calculations aside. What do you do if 25% or more of your rentals suddenly become delinquent, and you have to evict? How do you find new tenants fast?
Screening, Screening, Screening
Choosing the right tenant for your property can be a tricky business, and the vacancy cost starts skyrocketing. First and foremost, you want renters that are a good fit with you and your property. But, how do you make sure you end up with a good fit while protecting yourself at the same time? In short, screening, screening, screening!
Worry Free Tenant (WFT), a renter screening website, has many suggestions, at no charge to you! You can have most of it taken care of for you with minimal effort on your part. Here are our best tips for finding those diamonds in the rough.
Attention to Detail – You can verify a prospective renter’s age and Identity once they’ve filled out the necessary information on WFT’s screening website. Then you’ll know for sure who you’re dealing with and that they are not a minor.
Good references – WFT will gather information from past and present landlords to giving you insight into the potential renter’s rental history.
Adequate income – WFT can provide you with proof that your applicant is making enough money, giving you peace of mind, by verifying employment and income. Also, you want to make sure that they will be able to pay the upfront costs of moving in.
Background and credit checks – Have your applicants go to www.worryfreetenant.com, to do those background and credit checks upfront. A simple policy to follow is no background check, no keys.
Knowledge is Power
Knowing Fair Housing Laws – and your local landlord-tenant codes, as well as local requirements, is essential to having a good relationship with your tenants. These guidelines protect you both and give even footing for your relationship
You may have some specific preferences for your rental properties, and it is good to consider the applicant’s lifestyle against those. While you are permitted to turn down applicants for many reasons, always be careful to follow the Fair Housing guidelines! You should also consider whether or not the applicant has pets, and if there will be an additional fee for them to pay upfront.
Delaware Realty Management LLC
2700 Kirkwood Highway
Newark, DE 19711