Dear Property Guy: Renting and owning in the time of coronavirus

Dear Central Oregon:

I’d like to interrupt our normal format to provide some information and thoughts during the coronavirus shutdown.

Let me start by saying that everything, and I do mean everything, is very fluid right now. And anybody who says they know what is happening (including me) is wrong.

I also want to recognize the very human and very real suffering that is occurring right now in our community. Not just the people who are sick. But the people who are scared, people who are unemployed, families who are worried about making payroll, people who are struggling with anxiety and depression, people who are just plain sad and lonely…

These are our neighbors.

Now let’s talk about being a renter and being a property owner right now. There is no playbook for what we are experiencing. Straight up: there is plenty of pain to go around, and nobody is going to escape it.

The biggest driving factor of this financial pain is that this shutdown has put innumerable people out of work. Please note that almost 70 percent of Americans have less than $1,000 in savings and live paycheck to paycheck. Right here, right now, our neighbors are running out of money. Money to buy food, money to take care of their children, and money to pay rent. The reality is that neither unemployment, nor government stimulus checks are going to help for very long.

So we now (or will soon) have large numbers of people who not only can’t pay rent, but struggle to meet basic needs. I’m hearing from clients and tenants that April is mostly good, but May is another story if the shutdown continues.

There is an emergency rule in effect that temporarily prevents evictions for non-payment of rent. It’s not rent forgiveness, but allows renters to pay back rent over time. Again, we are in uncharted territory, and nobody knows how this is going to work as we move forward.

Many property owners depend on rental income as their sole or main source of income. The prospect of not collecting rent has many owners scared and considering putting their residential rentals on the market. This reduced supply will put further upward pressure on rental prices.

Banks and mortgage debt holders are still working out how they are going to work with borrowers who are unable to make payments without rental revenue coming in. Some seem to be offering payment deferments, but the common thread is that lending institutions are difficult, if not impossible, to get a hold of right now for firm

answers.

That’s kind of a rental “State of the Union,” but what to do about it? Every personal situation is so different that there is no universal answer, but there is a universal starting point: communication.

Landlords, talk to tenants. Tenants talk to property owners. Discuss what your respective financial situations really are. Discuss how to best work through it. Avoid surprises.

Some may end up with a temporary rent reduction. Some may work out a payment plan. And some may opt to move to a lower priced rental. I am urging both renters and property owners to be flexible, compassionate, and to take this as an opportunity to follow the ultimate direction: “Love Thy Neighbor.”

— Mike

Payment for this column donated to Sisters Food Pantry.

Mike Zoormajian is principal at WetDog Properties in Sisters. Providing local property management and investor services. Questions, comments, and mail to:

[email protected]

Free legal advice is worth what you pay for it. Consult a real attorney before doing anything crazy.