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As the conoravirus cases mount around the globe, world governments have struggled to manage not only their health care systems, but also the ballooning economic cost. The US government recently passed an historic $2 Trillion stimulus bill, and the Canadian government passed their version as well. But some have responded that the measures in those rescue bills still aren’t enough, and have decided to take matters into their own hands. Allow me to introduce you to the “Keep Your Rent” movement.
What is the “Keep Your Rent” Movement
What was started by a local tenant’s advocacy group in an obscure Toronto neighborhood called Parkdale has quickly become (and I’m SUPER sorry I have to use this word right now) viral, with versions popping up all over the US and Canada, including Ottawa, Montreal, Vancouver, Los Angeles, Portland, and, of course, New York City.
The Keep Your Rent movement’s principal argument is simple. Home owners were given economic relief from the federal government in the form of deferrals on their mortgage. So if the landlords don’t have to pay their mortgage, why should renters have to pay the landlords?
They also point out that in many states and provinces, local governments have passed laws banning evictions for the duration of the pandemic. So, they argue, if landlords don’t have to pay their mortgage, and renters can’t be evicted, on April 1 when everyone’s rent is due, let’s all just Keep Our Rent.
Is this ethical? Beats me. Landlords will argue that renters signed an agreement when they moved in, and that the pandemic doesn’t change that. Keep Your Rent organizers will argue that tenants being left out of economic bailouts is in itself a form of class warfare.
Governments, surprisingly, have reacted somewhat sympathetically towards the renters. Here in Ontario, our Premier came out and told renters it was OK not to pay their rents.
“If you have a choice between putting food on your table or paying rent, you’re putting food on your table. The government of Ontario will make sure that no one gets evicted. We stand by that and we’re gonna make sure we take care of those people”
~~Doug Ford Just Told Tenants in Ontario they don’t have to pay rent if they can’t afford it, BlogTO
Similarly, state governors in the US have affirmed their commitment to protecting renters from evictions. They’re busy fighting a virus, and the absolute last thing they need is sick people being evicted from their homes and then going around and infecting even more people.
The movement has picked up so much steam that posters and graffiti supporting it have just started randomly popping up all over the world.
Brooklyn is going on #RENTSTRIKE, pass it on 🏳️ pic.twitter.com/XHVl6tfwEi
— MIDWEST #RENTSTRIKE (@MW_Unrest) March 22, 2020
Seen in Seattle. #RentStrike pic.twitter.com/1D5Rkq4xu8
— WANaziWatch (@WANaziWatch) March 27, 2020
Landlords are Terrified
Scenes like this are playing out all around the world, and it has landlords panicked. And for good reason.
Over the years, I’ve met and gotten to know many real estate investors and what I’ve noticed is that they’re often far less financially secure than they think. Remember that even if landlords take advantage of these mortgage deferral programs, it’s not the same as having the payment forgiven. The amount that didn’t get paid will continue to compound, and when the landlord resumes their mortgage in 6 months or whatever, they’re going to find that their monthly payments will have gone up to account for this.
Also, there are plenty of other costs like heating, maintenance, property taxes, etc. that still need to get paid. And if the landlord is a full-time real estate investor that’s relying on those rent payments to fund their living expenses, then not getting their rent checks means they’ve essentially gotten laid off themselves.
Add all this together, and what this means is that landlords can’t afford to be sympathetic to their tenants plight. They need that money just as much as the renters do. And when they insist on getting their rent checks despite everything that’s happening, they are going to look like greedy assholes.
You can see their reactions yourself on popular real estate investing site BiggerPockets.com, where a thread has emerged of landlords giving each other advice on what to do about rent striking tenants. Highlights have included suggesting the tenants get a cash advance on their credit card, accusing tenants of being irresponsible freeloaders and thieves, and blaming tenants themselves for being poor.
So…maybe that whole class warfare thing isn’t too out of left field.
The Rent Strikers Want Revenge
But at the heart of this debacle is the fact that the renters are angry. Very angry.
Especially in big, high cost cities, there’s an undercurrent of populism and righteous indignation that’s been unleashed by this movement. Greedy landlords, after all, have been blamed for years on sky high rents in many cities like New York, Los Angeles, and Toronto. “Now’s our chance to fuck the landlords,” people say. “They deserve it because they’ve been fucking us for years.”
The Keep Your Rent people don’t just want relief. They want revenge.
It’s an emotionally satisfying response. This crisis has been unique in that it’s caused so much hardship without a clear enemy to hate. During the 9/11 attacks, everyone hated terrorists. During the 2008/2009 crisis, everyone hated Wall Street. But you can’t really hate a virus. Well, you can, but it’s not going to care.
So when a landlord comes demanding their rent checks when everyone’s lost their job, and then blames the tenant for being poor, that will provide a very convenient punching bag.
That’s why the Keep You Rent movement isn’t asking for a rent deferral. They just don’t want to pay it. That position would leave them vulnerable to being evicted once the bans are lifted, but they’re betting that if enough people do this on April 1, landlords won’t be able to retaliate because, as that freaked out landlady wrote on Reddit, “I can’t possibly evict all of them at once.”
United we stand, divided we fall, viva la revolucion and all that. Sound like anyone you know? 🙂
Who’s Side Are You On?
Personally, I can see both sides of this argument, and while I’m sympathetic to both, the truth is that the renters are probably going to win this one. The landlords are right in their assertion that even in a time of crisis, it’s still not OK to steal food from a grocery store, so why should not paying for housing be OK? But in the court of public opinion, those complaints will smack of privilege, greed, and pettiness. And if this movement manages to keep a united front, successfully pools their resources, and pressures local governments to support them via sheer numbers, landlords will find it less expensive to just eat the lost rent rather than engage in an doomed PR campaign.
Either way, April 1 is going to be an interesting day.
What do you think? Are you on the side of the renters or the landlords? Should people just Keep Their Rents or do you think that’s ethically wrong? Let’s hear it in the comments!
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I am so glad I got out of real estate! Crises like this make me kinda sad that I’m not holding any debt and that I’ve got a nice cash cushion, since many of the stimulus measures seem to be designed to give money to people who haven’t planned as well as we have.
Whatever! I payed my taxes, and I will keep paying my rent, and I will do what I can to help the businesses I care about stay solvent while this pandemic runs its course.
The one thing I hope to get out of this, is maybe America will finally figure out that tying health insurance to employment is a really stupid idea.
Stay safe!
Oh yeah, there’s already been a 17 year old kid who died of COVID because the hospital turned him away due to lack of insurance. When this is all over, that’s going to be an election issue.
You may be referring to the 17 year old kid from Lancaster CA. He was actually turned away from an urgent care for lack of insurance. He was referred to AV Hospital and they are a county hospital that doesn’t turn anyone away. Many of the people that use the ED dept at AV Hospital for colds etc do so because they aren’t required to pay. This is very costly for the hospital but they don’t turn anyone away. The kid was very sick when he got to the hospital and the CDC is looking into his case to see if COVID was actually the reason for his death.
But yes, the US does need to reevaluate its medical system. Right now it is highly regulated and pretty much a blend of bureaurocratist/socialist/mercantilist/capitalist. It would be nice if it just went straight to the capitalist side (in the free market sense). This would make it so the prices would go lower and the quality would go higher and it would allow for more innovation. We would still have to figure out a way to stop snake oil salesman, but the current system doesn’t stop that. So, I don’t know if there would be a huge difference.
“This would make it so the prices would go lower”
Nope, the prices would go up higher than they are today, and more people will die.
I won’t be arguing with you beyond what I’ve said above.
Sorry Bob, gotta disagree with you there. The regional divisions and constraints on the market make the market more inefficient. Competition is always the bestway to drive more innovation and cost reductions. Jon is right IMO.
Perfect example of the weaknesses of the media to do real journalism. There are hospitals across the country that do not turn anyone away for any emergency.
Oh boy! Thanks for keeping us informed about this ‘crazy’ movement. Has someone who own a couple of investment property in the USA, I’m gonna watch what our tenants are gonna do on April 1st. Do you know if this will catch like wildfire and everyone renting is basically going to stop paying rent for a few months? I’m happy to consider delay rent payment from my tenants if they are in some financial trouble due to the pandemic… but giving them free rent for a few months seems a bit too much to ask IMHO.
Who knows how far this will spread, but I’ve already had friends of ours tell us that their tenants just informed them that they won’t be paying rent for 3 months, and they own a bunch of flats in the UK.
Keep us informed on what your tenants do!
A lot of this shows lack of values.
Is it understandable if a person where to reach out and ask for a deferral and work with their landlord, of course.
Is it acceptable for landlords to work with their renters and explain to them what shortfalls they can accept and have them simply catch up at a later date, of course it is.
But all these movements be it “rent-striking”, or wanting government to forgive student loans you signed contracts for shows a frightening movement of people’s thinking from personal responsibilities to a socialist/communist thinking.
As you said, it’s revenge against people they think are taking from them and they expect governments to do everything for them.
The further people move from personal responsibility the further they move from the concept or any desire and reason to strive for success. For that matter, if you don’t have to strive for success what is the purpose making yourself sacrifice to save?
That mindset to me is the exact opposite of what it actually takes to become Financially Independent.
It is a saddening sight.
I hope one day more people can begin to see why it is more freeing to be self reliant than to be beholden to anyone for survival.
Well said! It’s so true. Extreme socialism is a huge threat to these unsuspecting people. I wonder if renters realize that their landlords do still have to pay the mortgage payment at some point and that if they can’t pay then the whole building could be out of a place to live…
My renters who reach out,
communicate their issues, and work out a deal with me wont get evicted and I won’t go after them for rent through credit & collection agencies (legal in my state). I’ve given a struggling single mother three months of free rent. However, I take immediate and enjoyable glee to trash a renters credit who feels entitled to move in, not pay rent, and believe they can live in your property for free. At one time I needed all my renters to pay rent: if they didn’t pay rent my kids didn’t eat. Unfortunately public opinion believes landlords are more solvent and don’t have as large of risk as renters. If anything they HAVE significantly more. Renters move out and find a new place to live; landlord is stuck paying bills. How about landlords start a movement, “NOT GOING TO PAY PROPERTY TAX”. If enough of us don’t do this city services will shutdown, schools will be defunded, and roads will be more messed up. If enough of us landlords do this hey can’t come after us all…
“How about landlords start a movement, “NOT GOING TO PAY PROPERTY TAX”. If enough of us don’t do this city services will shutdown, schools will be defunded, and roads will be more messed up.”
That’s funny you should say that, because landlords have been fighting property tax increases tooth and nail for decades while simultaneously demanding the right to increase rents arbitrarily. In Vancouver, seniors can defer property tax until death! How great is that? Also, I can’t be certain how many landlords are among those who’ve been fighting increased spending and salaries for public services, but I’d wager a significant portion.
Have your costs as a landlord faster than average rental prices? Because last time I checked, mortgage rates have continued to drop and property taxes have remained stable. Meanwhile, landlords are hoovering up largest chunk of Canadians’ incomes. If anything, landlords are NOT paying their fair share.
You can either invest in real estate for asset appreciation or income; doing both is greedy and risky, and now you understand why.
Put yourself in others’ shoes for a change. This crisis is showing that retail and healthcare workers among others make the world go around, not landlords.
Investing in real estate (insert: stock and index funds) for income and appreciation is risky and greedy. Had to insert that to point out your hypocrisy. If you’re a reader of this website you have some economic sense but somehow when you read my comment you let that your sociology professor’s brainless tag lines infected your ability to reason.
If you have something people want you will charge what market demands for it. If Canadian rents are increasing higher than expenses, it’s because the market is demanding that they go up due to supply and demand. In my area rents have gone up 4% per year for the last decade while my property taxes have DOUBLED over that time. You’re argument is incorrect, expenses in virtually ALL US markets besides Northeast and West Coast cities have gone up faster than rents. Landlords should take note of this crisis and REFUSE to rent for several months since that is what people seem to think we owe our renters. We stop renting and there are no homes to rent, then renters and the government will see just how high stupid SJW based incentives can drive rent😎
Hey Chad!
Absolutely right, there’s actually an element of the far-left that have kind of latched onto this and tried to spin this into an eat-the-rich anti-capitalist movement, which would make this movement far more radical (and dangerous IMO – you know my stance on communists)
The real issue underlying all of this is that it seems neither the renters nor the landlords have any money saved, and that’s causing them to fight with each other over table scraps.
Yup, know your guys stance on communist and agree 💯 %.
Unfortunately society as a whole has lost all concept of personal savings. They also seem to somehow want to avoid all responsibility for their own wellbeing. That is one of the most hopeful things I have about the FI and FIRE movement’s.
I have a tendency to run people the wrong way on things, when they blame everything on everyone else I tell them they’re full of crap when is would probably just say it’s their fault.
But sometimes I think brutal honesty with people is more useful for them.
I love your guys work, keep it up and maybe we can start the larger changes for the good.
Wanderer, you’ve got to the heart of it. Tenants and landlords will blame each other, but the truth is that because of the pandemic, that money just doesn’t exist.
Absolutely right. Here we teach everyone to be financial independent and responsible, save months worth of expenses and yet I felt like through this entire article, Renters are victims and landlords are evil.
I own my house, I have the basement rented, I don’t have a mortgage from the 6 Big banks of Canada but from a small lender and they have not defered the mortgages, my wife is out of work, I have a 3 year old and a 1.5 year old, I still have to pay mortgage and put food on the table. Now that my wife is out of work, I am heavily depending on rent money.
How is that being greedy?
Socialist always Use the “other” this now is the back/landlords and label them as an oppressor or tyrant to make them inhuman.
Then the promise government can solve everything.
The only trade off is 50,60 or 70% of your work is for the government and you’re left to survive on 30 cents on the dollar living in a shack that’s provided by that wonderful government.
China’s socialist government built those hospitals so fast😂 until you realize they where basically warehouses full of beds with no medical staff or treatment. They where cattlecamps where people either survived or died.
I’ll take a hard pass on Socialist/Communist governments 👍
Its the age old Socialists vs Capitalists scenario in my opinion.
I live in Nigeria and rent here is paid at least 1 year ahead. My landlord is balling and there’s absolutely no way i can join any movement even if i wanted to.
I have accepted my fate and intensified my race into FIRE.
Peace and love from Sub-Saharan Africa.
A lot of good points in the article, and the comments as well. I never had any interest in owning real estate. Too much uncertainty about renters paying, and being able to evict them if they don’t. Now it’s even worse.
Overall, I see this as a problem on two fronts. One is that landlords have been really unforgiving in the last few years about raising rents, or working with tenants who are experiencing financial difficulties. In the last few years it has been easier to find new tenants, and raise the new tenants rent so there has been no incentive to work with people. Now those people are “striking” back (get it).
The second part of the problem is that the government has been encouraging people to go out and spend money since the last recession. Literally, George W. Bush telling people to go out and spend money to support the economy. People listened, and spent everything they had. Now they find themselves without any emergency savings, which used to be a thing. They are now looking to the government to tell them what to do next. It’s a case of “We followed your directions. Now what?” Student debt, auto debt, credit card debt. Our economy is financed off of debt.
The sad conclusion to this is that we will have to bail everybody out, renters and landlords. However, the only way to do so is to take money from the people who are working and building businesses. The only businesses that are open right now are essential businesses. Mostly healthcare and groceries. So the people on the front line fighting this disease, and the people supplying our food, along with the businesses they work in will end up bearing the brunt of this bailout.
This will definitely change America in the coming years. Healthcare will be an increasingly heated topic of debate. Perhaps we will end up socializing healthcare, and even groceries in the future? Who know, too early to say. Chad Hill did have an excellent point about how not taking personal responsibility will lead to people not wanting to succeed. I would add that if you do succeed, you will be taxed even heavier because of your success. At some point we have to stop looking to the government to fix all of our problems.
I’m not looking to the government to solve any of my problems.
Yup, everyone’s in debt on both sides of the equation and have no money saved up., so now both sides need a bailout. Personal responsibility sorely lacking, but then again if everyone had their shit together, we wouldn’t need governments would we? 🙂
Except governments don’t have their shit together, either. It just adds another onerous layer of shit to all if it!
I’m pretty sure there is no mortgage deferment in the US. You have to work with your lender if you need help. It will probably screw up your credit score.
As for renters, the stimulus bill has eviction protection. Renters can work with their landlord on deferment, but they still owe the rent. If renters don’t pay, they can get evicted after the period covered in the bill. I think that’s 4 months.
We’re very lucky because our renters kept their jobs. Both sides should be fine for now.
In the US, rent can be deferred. It’s not free rent for several months. That will screw up your credit.
Fannie Mae is deferring mortgages. That’s roughly 50% of all mortgages in the United States.
What do they mean tenants were left out of the economic bailout? For people who are able to work from home they are still collecting a paycheck. For people who lost a job they raised the amount of unemployment you will receive from $385 to almost $1000 a week– on top of the one time $1200 check that’s coming soon. That may not be everybody but I would think this covers most people.
Oh you know, it’s the same old jealousy BS. “They” got more help than I did, so now I’m mad.
This is why I have thought that being a landlord is a bit dangerous. It’s like putting all your eggs in one basket. Sure you can make a good money leveraging a mortgage and getting rent payments. But it seems really dangerous putting so much money in a single asset. I prefer stocks for that reason. You are putting your money in a lot of different assets.
But at the same time, if you are a landlord and you don’t have a significant cushion for for times like these per house, well, you should have planned ahead. E.g., you should have money set aside for a new roof, which would be 10 to $15k per house, which means you should be able to ride this out easily.
A couple years ago we stopped buying rundown houses in our neighborhood and fixing them up to rent because it seemed that our country is against rentals as a small business. We’ve been waiting to see what happens. So far we have always had great renters. We decided if the neighborhood gets too bad we will just move as far as we need to.
They should have money put away, but they don’t. That’s why they’re panicking.
Real estate is definitely more work and not without some additional risks. However, any given rental property could be considered a unique type of asset if you diversify by buying different types of buildings in different locations with different tenant bases. Maintenance expenses tend to be below $1000 per instance and a new roof (in California), will cost you about $5-6k per thousand square feet of living space, less if you’re putting a second layer of shingles down on top of an existing roof.
So, not too bad. I definitely think it can be a good route to FI. It just seems extra risky because you are putting so much into a single asset/property. And I guess you mitigate that by leveraging with the bank loan. A lot of people go that route and do really well, so I’m not saying that it is a bad path. But it is definitely more work than I would like to do. Granted I’m probably working extra years at my job instead because I don’t do rentals.
I was actually about to purchase a duplex/quadplex in my younger years but didn’t end up going that route since I couldn’t stand my engineering job and instead used that down payment as a 5 year sabbatical where I taught myself programming. And by the end of that my family was large enough (and we owned a lot more) that I didn’t want to be living in an apartment anymore. So, who knows, maybe I would be FI already if I had liked my job and went down the rental route (well, I would definitely be FI – but I would have hated life!).
I also think it is understandable that with stock investors hurting so far in this downturn, there is a desire for landlords to get screwed as well. But if you look at history, real estate has been much more stable during times like these and will rent continue to get paid.
A lot of people are simply working from home instead of working in an office and they are keeping their paychecks. While the people who are struggling are getting Tremendous help from the government and Unemployment benefits.
So if you are a higher priced market landlord, Your tenants are probably kept their jobs. And if you are a lower priced landlord, the government is helping out your tenants.
I think in the end, responsible people will do the right thing.
Sam
Jobless claims were over 3 million. Only rich people are seriously sitting on the internet thinking everybody is working from home.
I don’t know, man. It seems everyone’s getting hit right now. Rents are supposed to be the last thing that gets hit, but even commercial real estate is getting affected because all the malls are shut down. Cheesecake Factory & Subway are saying they’re joining it!!!
‘Love it !! Not only should they withhold rent, they should use their leverage to force landlords into renegotiated reduced rents going forward.
Regarding FIRE, I’ve always believed that those who pursued FIRE through real estate investing were in a precarious position. These people leveraged up with multiple properties until they establish a cash flow sufficient to quit their jobs. They built their FIRE dreams on a house of cards. It’s always been a matter of time for these people…just one or two flakey renters can flush their early retirement down the toilet. Now it’s actually happening.
..not much sympathy here…
This viewpoint seems a little too simplistic to me. Most real estate property owners I know personally own 1-4 residential units. The way I do the math, that’s never going to be your only source of income, but it does serve as a nice hedge against inflation/market downturns. They also have personal relationships with their tenants, because both the tenant and the property owner have the common goal of maintaining the property. I’m sure you can find folks who sold out on real estate as their only investment vehicle, but I also wouldn’t consider someone who owns and actively manages real estate to be retired, early or otherwise. Anyone who has owned and maintained real estate for themselves knows that it’s not a passive form of income if you care about your assets (or the future of your investments for that matter).
It’s also hard for me to see a property owner with mortgage, taxes, insurance and other fixed expenses NOT preferring to work with a tenant who has an extenuating circumstance due to this health crisis as opposed to demanding rent, in full, as per the terms of the lease and proceeding with an eviction process.
I also don’t understand the the portrayal of the property owner/tenant relationship as a necessarily combative one, or a situation where an entire building simply refuses to pay rent without unless A) every individual has individual lost the ability to pay his/her rent or B) this seems to the tenants to proper starting place for a negotiation with the owner concerning a previously agreed upon contract. Either way, it seems to me a much better approach would be to contact your property owner, explain extenuating circumstance, and see if you the two of you can work out a mutually beneficial arrangement to whether this current crisis together (much in the same way property owners are being told to contact their lender given an extenuating circumstance on their end to avoid a foreclosure if at all possible)
Really Bill? Talk about a broad brush and a fixed mindset.
Most that go into real estate aren’t over-leveraged, and even if they were why root against them? Why Bill finds such joy in “flakey renters” destroying someone’s retirement says a lot more about him.
What attracted us to real estate was learning not only could it help us achieve FIRE but it also can provide a lot good to a community. Many investors help rebuild buildings, houses, and communities that have been vacant for years which the city left to rot. We give our tenants ownership of a house they can be proud of.
My wife and I are not greedy wealthy over-leveraged landlords. I’m a teacher with middle income that saved up my money to purchase a modest single-family rental. My tenants work in the medical field and we have already reached out to them to see if they need any help. The politely declined. I’ve learned if you build a good relationship, and take care of your tenants you will be successful in real estate.
I understand some landlords don’t behave this way. But encouraging renters to strike against those looking for FIRE, to me, goes against the values of what this blog/forum stands for.
I understand being sympathetic to those who lost their jobs and are without income. My wife just lost her job two weeks ago. But due to FIRE, we learned to not spend beyond our means and instead of the nice cars and bigger home we built an emergency fund.
I also feel there are enough standards in our state (Illinois) to protect against anyone getting evicted so there isn’t a valid reason for renters strike other than to hurt people like us who try to do the right thing. No reason to attack those who chose a different path of FIRE.
I think land lords and tenants should be working together to solve these issues. As some others have mentioned, people who have been laid off are getting a lot of help from the government to make up for lost income. In a lot of cases it probably isn’t enough to cover rent completely depending on how much rent costs in their area and what their other expenses are but they could at least pay SOME of the rent but they’ll probably just hoard they money they get just like people have been hoarding groceries (in BC they have announced a $500 rent subsidy and it is being paid directly to the landlords so tenants can’t just claim it and keep it for themselves) The landlords should also not expect to get the full amount from tenants, so many people lived paycheck to paycheck before this so simply deferring rent but expecting full payment once they get back to work is just not going to be realistic. There should be compassion and compromise on both sides.
I don’t think a lot of these people have, let’s say, friendly relationships with their landlord. I personally know people who had their landlords try to lock them out of their apartments because they were worked in the travel sector and the landlords were worried they would catch the coronavirus. That person’s not gonna think twice about joining this movement.
Yeah I am in a few facebook groups that discuss things like housing and rent either in Metro Vancouver or my local community. There is a very strong “eat the rich” mentality coming from a lot of the members who basically think that if you own land you are rich (or that you over leveraged yourself to buy property when you shouldn’t have and therefore deserve to get screwed) so a lot of those people are relishing watching the property owners struggle now. I am personally not in that boat, I have sympathy for both sides.
We rent from family and I’ve already paid up until June and will continue to pay rent no matter what. So far I still have a job with regular hours working from home but even if I didn’t I could afford to pay the rest of the year without issue. We get a really good deal on rent and I wouldn’t be ok with screwing over a family member like that.
lol well that is hella illegal. I would be surprised if it were widespread.
Bryce, Parkdale isn’t “obscure”….you guys have been away too long (don’t blame you though)…..I know you are staying on King West….hop on the streetcar (gross) or walk further west and check it out more.
Well, if Parkdale wasn’t famous before it certainly is now.
I’m a small landlord and this scares the crap out of me too. All I can do is try to work with my tenants but how do I know for sure that the tenant is really in crisis or just taking advantage of the opportunity to not pay rent? I think that it’s unfair to landlords, I wasn’t planning on going to my lender to cut some kind of deal or waive my mortgage and in the end the landlord is the one that gets screwed, the payment does not go away, neither do all the other expenses. Also, I am sorry that people complain about high rent areas, but guess what, it’s a big country, move to a low cost of living area. I am not a greedy jerk for asking market rent for my units. I get a little sick of the “us vs them” mindset in this country too.
If they have money put away landlord should be able to ask for bank statements to verify that they don’t have any money to pay rent .
PAY 20% OF THE RENT.
Here’s an idea we have discussed where I live, in Scandinavia . We operate a retail store, and business is catastrophic.
Our bank is willing to pause amortizations, and interest rates are fortunately low. What if everyone agrees to pay 20% or so of the rent? That would give the landlord some income, to pay for insurance, utilities, maintenance.
If they have loans on their properties, they should be able to defer their amortizations as well, and only pay interest.
To have a all these apartments or stores empty by the time the whole Corona-deal is over cannot be in the interest of the landlords. Where are they going to find all these new tenants, and at what cost?
Pay 20% of the rent? That’s not gonna make a good hashtag!
Not all landlords are in your position and you know that. Also many landlords will NOT get mortgage deferrals and are loosing money on a month to month basis even if the rents are paid. If you are genuine in what you have written, then you have been doing this for a very long time, built equity and conveniently forgotten your first few years, Further with what many people had to pay to purchase properties recently their start was way harder than it ever has been financially. Why does everyone assume that all landlords have these deep pockets? Or is it just jealousy and no compassion if all go under. It will make some feel better as now we all will be slaves to the corporations and no more middle guy. People have no idea what they wish for…no small guy, no competition, sky high rents.
This seems like a sensible plan, given two conditions:
1. All of the parties are in agreement (tenant, landlord, bank/servicer)
2. All of the parties have to have some savings to ride it out for however long this is
It’s more likely to work in Scandinavian countries, with higher social cohesion and a stronger welfare state, than in the US or Canada.
worldwide rent increases have been caused by 2 factors ;
Airbnb ( etc ) and ignorance of investing ( people expecting to get rich from real estate or FOMO )
i blame governments of all levels not providing enough affordable housing with rent caps etc for DECADES .
I blame individual idiots who don’t make an effort to educate themselves about money or saving for a rainy day. Gouvernment is not responsible to wipe everybody’s ass because they can’t be bothered to do it for themselves. Get real.
This is overly simplified. With monetary easing, cost of real estate was going up, so rents were going up as well. Population growth increased demand for housing while supply didn’t keep up. Minimum wage went up and less people wanted to do blue collar work and when a landlord called for anything to be fixed, the prices asked were outrageous. Airbnb was only presented as such as because the big corporate hotels didn’t like competition. So they made the Airbnb hosts look like the big bad guys and turned the renters against hosts. No property owner (or at least not many) have been paid or hired to supply affordable housing, so how again are personal people responsible to supply affordable housing when the average house in Toronto started at a million???
Can anybody still do some math here, and then add all the other expenses.
Sadly there are hardly any people with a sufficient emergency fund these days (renters and landlords alike) and they are in panic mode. And guess who they are looking to to bail them out? Good ole Uncle Sam. Yet many of these same people are anti-government, anti-taxes, and all about their freedoms. As for the comments above re getting too many handouts and not being motivated – I disagree. Having a healthy support system from your government means you don’t have to start off your career burdened with tens or hundreds of thousands of dollars in student loan debt, you don’t have to put off going to the doctor or because of pesky co-pays, you don’t have to worry about health care costs (both pre and post FIRE), you get legitimate time off to spend with your newborn child, etc etc etc. I think we all could learn a thing or two by reading the book The Nordic Theory of Everything.
There’s a middle alternate to this situation.
I live in a Housing Coop (that is well managed and holds a small mortgage with a social purpose Credit Union). We’ve been able to halve our housing fees for the next couple of months to support families. We already have very low (and very below market) fees for our homes (mainly 2 – 4 bedroom townhouses full of families). This has enabled my husband and I to not only have a large 3 level townhouse to raise our family in, but given us a lot of financial mobility to invest elsewhere.
We already have a community that is geared towards collective support for one another, and under duress we have the financial clout to get support from our credit union.
We have a handful of elderly members who have been able to rely on the support of their cooperative neighbours to get supplies and groceries. We have our own emergency response plan. We have our own green space and playground. We grow food together. We look out for each other.
There are so many important reasons why more people should be demanding cooperative housing. It solves a lot of problems, and aside from the great advice on this site, it also provides an alternative to the question, “should I buy a home?”
And right now, I feel very fortunate to not have to worry about being a “renter” or a “land owner”, because i’m neither and I’m both.
I am not against Coops or affordable housing for all.
However, we have to face reality.
No company, private individual, or organisation can build housing and hold a ‘small mortgage’. As land and people need to get paid, the money needs to come from somewhere.
If they truly have a ‘small mortgage’ that is GREAT, but that means they bought/built a long time ago. Without outside funds or communal construction you cannot build and have a small mortgage.
Unfortunately many people do not make the connection between wages demanded and cost of paying.
If an electrician and a plumber earn over a hundred k, guess where that money will come from?
I am not against coops or communal construction, but against not understanding reality.
Lets communally build coops and ask governments to build affordable / subsidised housing as they are the ones collecting taxes, and those taxes can be used to build.
The implications of covid are so far reaching. I hope we all work together to make the best of this situation. Luckily, my rentals are debt free, but, it’s passive income that I currently live off of. I have always done well by my tenants and I hope they will continue to pay on time as they have secure jobs. If not I will work with them and potentially sell one or two if it becomes problematic.
Thank goodness for good FI principles. No debt, large emergency fund and this gal knows how to cut her expenses.
Good luck to everyone.
Absolutely the right approach Michele. I continue to pay 3 domestic staff for the simple reason that I can afford to do it.
There will also of course be the unintended consequences of all of this. What happens with the mortgage industry moving forward? When people stop paying rent, people stop paying mortgages, we have seen these things go south before.
Normally I have 2 jobs because 1 isn’t enough to pay the bills and save for retirement. I also rent out 3 rooms in my basement because I wouldn’t easily be able to afford my house otherwise. I have lost both of my jobs. My income is now the rent I receive plus EI, whenever that starts to come in. Included in the rent is heat, water, power and internet, even for our lowest price room of $400/month. I can probably defer my mortgage payment if I need to, and would be open to deferring rent if that needs to happen. Refusing to pay any rent? That’s just robbery.
There is no easy answer. It is mortgage deferral, not mortgage forgiveness; landlords still have costs and not all have mortgages. Renters will find themselves in different positions: some are still earning exactly the same income, some less and some have little or none.
In an ideal world, tenants and landlords would agree on revised rental rates based on the circumstances of both sides, but sadly that won’t happen as far too many of us are jerks. I am another who is happy to have sold his real estate portfolio recently – if you can’t be smart, be lucky!
If our tenants honestly can’t pay their rent because they can’t work due to the virus, God bless them, they’ve got it worse than me. I won’t give them any grief over it. I can weather this storm without any rental income for quite some time. I don’t want to, of course, but I can and will if that’s what it takes to be a decent person in a time of woe.
We provide a quality place to live at a reasonable rate. We take our duty to fix things seriously and we fix them as promptly they can be fixed. We get thank you letters from our tenants for being great landlords.
But if I find out that someone could have paid their rent and they simply decided to cheat me, I’ll kick their ass out of our property the moment the courts or their lease lets me, whichever comes first. And I’ll make sure that they have a shitty reference that clearly states “Tenant had the resources to pay rent and simply decided not to pay. I will never trust them again.”
Totally agree with you
The problem is, of course, that you can’t differentiate intent from action. Just because someone didn’t pay rent, but had the cash available, doesn’t mean they were trying to screw you. It might mean they were afraid that they would need that cash later.
What could they possibly need the money for later that’s more important than paying rent now? What goes above shelter in these times? Groceries? Then why not decide that they cannot afford to pay for groceries instead, and simply fill their carts at the grocery store, then refuse to pay?
Amen. The difference is that the grocery stores that still function are mega corporations and the landlords may be small scale. This is not the small against the big, but the big against the small so that they can buy it all up pennies on the dollar. The media is in it.
Completely agree. I am happy to negotiate as needed (rent deferral, decreased rent for a period of time, a payment plan that works for our renter, one month free, whatever), but if someone withholds pay when they had the means all along just to “eat-the-rich” or whatever, then I will realize that my tenant sees me as the enemy and I don’t want to continue a business relationship with someone who sees me as the enemy – in this case, we will look for a new renter once the crisis is done and I can legally do so. Humanity goes both ways.
It’s a slippery slope. And if companies cut, suspend or refuse to pay their dividend? Then so much for your Yield Sheild, It’ll really be a crisis having to sell your stocks at low prices
I think the vast majority of landlords are small-time Mom and Pop operations, and many have jobs too, that they could lose in this crisis. Not sure what ethical argument could be made for simply not paying your bills. This is a time for cooperation, not anarchy. If landlords go down, then their tenants will lose out too, and the bank always wins.
Some crazy commies are proposing defaulting on the rent – what else is new?! Remember, landlords can – in the best possible case – only hope to DEFER the mortgage payment, while interest will accrue as usual.
So, if renters promise to pay all the rent later, plus interest (!!!) then sure, why not?! Or even better: subtract the rent arrears from their stimulus check to make sure renters don’t blow the windfall on other nonsense.
But if they completely default they will be (and should be!) kicked out of their apartments.
Mortgage deferrals in Canada are being touted as free money. They are not (you will owe the bank more money not less if you take them). All they do is help cash-flow for awhile. When I go and buy TP at Costco I pay at the checkout. When I go to the grocery store And buy all the rice, flour and beans I pay at the check out. When I live in my apartment I pay at the checkout(figure of speech). Many landlords are essentially small business owners. You wouldn’t steal a bike from your local bike shop would you? Don’t steal from anyone. Be a grown up , build your emergency fund seek FI, invest and be self reliant…..ps what do you mean tenants didn’t get a bailout ?it’s called employment insurance, plus all the other programs that just started
My husband and I have three mortgage properties and all of our tenants have paid their rent for April. We really try to take care of our properties and make them excellent places for our tenants to live. It really is a relationship and we spend a lot of time checking on references and determining financial wherewithal to handle the monthly rent before we sign an agreement. It’s not perfect but it works. Also, I think most people who rent respect their rental agreement and will do the right thing and pay. Vince has articulated personal responsibility very well and I think this kind of attitude will take you much further in life than always looking to who you can take advantage of.
The saying “treat others the way you wish to be treated’ is a good principle to live by.
In theory, everyone being laid off will be receiving EI or some other form of government support. As has been discussed on this site ad nauseam, mortgage payments are just one expense among many while owning property. Many landlords/real estate investors are at serious risk of going bankrupt without money coming in. Once they go bankrupt, banks will have zero sympathy or difficulty clearing a rental property out….by force. Canada is at major risk of becoming a failed socialist republic if public opinion keeps bending left; with savers and investors becoming modern Kulaks.
Can’t pay your rental property mortgage because renters don’t have money? Boo hoo, that’s capitalism.
There’s a process for non-paying renters and if that takes too long or is too costly then you should have planned better and not leveraged so hard into something that, by the rules of capitalism you’ve been exploiting on the backs of your renters, can go south so quickly. You were all about capitalism when it was so much in your favor that you could charge $4k/mo for a crappy 2/2 in the Bay Area, right?
You can always sell that asset you’re sitting on too so spare us the crocodile tears.
Interesting post! Personally, I am not that afraid of a rent strike, and I believe most small-time landlords won’t be, either.
Here are some statistics:
There are ~18M single-family rental homes in this country. There are about 8 million units of duplex, triplex, or quadplex housing.
80% of single-family rental units are owned by investors with 10 or fewer units. 60% are owned by investors with just 1-2 properties aside from their primary.
These people are individuals, they usually work a job (earn between $50K and $200K per year). They usually have multiple investments, including real estate, their home, a job, stocks, and often small businesses.
We polled our audience, and 75% of the people polled say they have over 3 months reserves (if ALL income dried up). 60% have over 6 months.
About 3M people filed for unemployment last week. That’s huge, but it’s only 1% of the population of this country. Even if ALL of those folks are tenants, there are 45M units of rental housing stock in this country. So that’s less than 10% of tenants. Most of those folks are receiving final paychecks, some will receive severance, and most will be eligible for unemployment and the bailout checks. Many tenants are elderly, on disability, receive social security, etc. Many tenants are on section 8 or other gov’t housing.
Most of these small-time landlords have personal relationships with their tenants, or have reasonable property managers. Most have a somewhat diverse tenant pool. In the event that a tenant is truly out of money, losing their job, ineligible for unemployment, no gov’t bailout, no other savings, no other liquidity, no other income, then of course these people are going to work with them. A few won’t, and they will be the evil landlords who make the news.
What you are seeing, and what is playing to the fears of landlords, is a tiny population, often of communists (I don’t say that to be political, literally, check the pages and you’ll see Maoist and communist pages backing these things), who are calling for a rent strike.
PERHAPS, a small percentage of tenants who are otherwise able to pay rent because they are still employed, have savings, are receiving unemployment, receive a bailout, have other streams of income, etc, strike. These are the people who could otherwise pay, but won’t, in order to take revenge, as you express.
Well, at that point most landlords remain relatively well-capitalized. Most will have at least partial rent coming from other places. The landlords will wait, accrue the rent and late fees, file, evict, sue, and bankrupt these rent-strikers when the courts reopen.
No one wins in this scenario, but in all but a few cases, the truly screwed are the rent-strikers who tried to game the present. The landlord simply experiences a temporary dip in cash flow and dips into reserves. The rent-striker is bankrupted with an eviction and ruined credit, and will face the consequences of that for years.
Of course, if you aren’t well-capitalized, then this could bring you down as a landlord. But you were probably doing down in the next recession anyways, if that’s the case, if not sooner when you have an unexpected trashing of your property, roof replacement, etc.
As I’m working from home I don’t have time to read all the comments on this thread, but the answer seems simple to me…why can’t everyone just WORK TOGETHER??? Instead of accusing people of being freeloaders or greedy bastards, how about they come to an agreement on how much rent needs to be paid to keep the landlord and the tenants afloat? Or, if the landlord is getting deferred payments, can he offer the same deferred payments to his tenants? Ie. take a few months off while you’re out of work, but if you have 9 months left in your lease, than the total owed will be split over the last 6 months or whatever? I realize typing this is WAY easier than doing it, but at least give it a shot before you declare a war on each other.
This is why we have laws and a government with the ability to step in in a pandemic situation – part of the security system we pay for with our taxes.
In BC you can’t evict currently for non-payment of rent, but it doesn’t mean the renter doesn’t continue to owe the money.
This is not an issue of opinion, thank goodness, it is a question of law and to what degree the government will step in in a crisis. The government has already created a $500 renter credit for April payable to the landlord, and arranged for mortgage deferral for those that qualify. In addition, there is emergency income support for tenants who have lost their employment for the next four months. They should be able to pay something and government will likely continue to assist until this is over.
For tenants who think they can just claim a rent strike, they are going to be quite surprised that when this is all over they will be evicted if they don’t pay and, once evicted, will still be expected to pay back-rent. Not to say there won’t be losses as some will never pay, but that is the system.
Ridiculous to put the cost of living burden on a provider of a service, whether it be housing or utilities. People need to have savings, maybe this situation will change some spending patterns long-term.
I’m a very small time landlord with just one unit. I would certainly hope that my tenant keeps paying rent. Not because I need the money for a mortgage (I have a job and live well below my means and can pay the mortgage from my savings if necessary), but because fair is fair.
I would be willing to work with the tenant on a rent reduction, with the balance placed on rent deferral for however long it takes businesses to reopen, maybe three months with the option to reevaluate the situation after three months. I would even be willing to do this interest-free. I feel like that would be fair. The tenant is using a resource, and needs to compensate the owner for the use of the resource.
Also, why didn’t Ford just say, “If it’s a choice between having a place to live, and feeding your kids, then definitely keep a roof over your heads and just don’t pay for the food?” It amounts to the same thing, and the large grocery chains are wealthier than most small time landlords.
The way I see it. Everyone should have some savings. I see people buying crap they don’t need and in some cases take out a loan to get it.
I have around 100 units. No one has offered me any help on my $20,000 in monthly mortgage payments. There may be mortgage deferral for single family properties but I see nothing about commercial apartment building owners. The VAST majority of rental units are in purpose built buildings. Mom and Pop, with their few units, don’t really even count.
I am NOT looking for anything from the Government. We can manage. We had offered all our tenants a program if they needed help. They were grateful that I asked but only really a handful need assistance. I don’t have fancy property – just plain and decent stuff. Playing class struggle helps no one. I have always offered help to struggling tenants, but people ultimately need to be responsible for themselves. While this whole thing works its way through the system we will be sympathetic for people who have lost their jobs. But we too need to pay our bills, and everyone wildly underestimates what it costs to run apartments. The reality is that for most apartments the expense ratio is in the 50% or more range of gross scheduled rents, PLUS debt service on top of that. Paying 20% of the rent wouldn’t keep the heat and lights on. The Parkdale people are doing a disservice to tenants. It would be much more productive to work together between tenants and landlords than to play class struggle.
We are age 60 and 61 working class landlords who have bought and fixed up run down properties. We are still paying off the properties. So far the companies that hold our mortgages for our rentals haven’t given us the option of not paying the mortgages. So far we still have to pay property tax, insurance, and utilities. We do not have high rents, we maintain our properties, and have good communication with our tenants. However now the governor, Tony Evers, in our state (Wisconsin) is trying to pass a bill to put a moratorium on evictions up to 45 days after any crisis ends.
You have it wrong, we still need to pay the mortgage payment, just later, and they are charging more interest, and fees. You need to read the fine print. People that have applied are also being put thru credit checks to see if they even qualify, this is not a hand out.
Almost all mortgages have this function anyway, I can skip a payment anytime I want, by why would I, they charge me extra interest.
How about the Landlords go on strike, and stop paying their Mortgages, as the Banks are the ones getting the hand outs from the Feb dropping rates, and buying back paper.
It seems like landlords would be somewhat covered by the security deposit. In my case, we collect two months of rent for security deposits. If my tenants decide not to pay for one or two months, I would just play it cool until they leave and then just keep their security deposit as rent payment plus late fees. If they do this for more than two months or if they trash the property, then I am out of luck I guess. I really hope it doesn’t come to that.
I can’t speak for other provinces, but it’s illegal to demand deposits of any kind beyond the first month’s rent in Quebec.
I’m a tenant of a rental in Whistler. The majority of Whistler is now laid off and like you said everyone wanted cheaper rent or not rent. It seems people are under the assumtion that all landlords can defer their mortgages, and that the landlords are always ripping people off. Some landlords here have been offering discounts but not a lot. And I don’t think anyone is owed a discount even though some seem to think they are. The mortgage deferrals from the big 6 banks I believe are on a case by case basic and may only apply if the landlord themselves is out of work. Not everyone understands that. They also don’t seem to understand that the mortgage still needs to be paid even if deferred, the interest accrues, and also it may effect your credit rating(banks are saying it doesn’t but I’ve read reports of this already happening). Then a lot of other people don’t understand that there are 10,000 to 12,000 active mortgage brokers in Canada and I’m guessing whether they offer deferrals or not is a case by case basis also. Then lets say for example some landlords don’t have a mortgage. Most people I talk to assume that those with out mortgages and rich slumlords taking advantage. In the case of Whistler I try to explain to people that a lot of these landlords came her young and worked their ass off to get to the point where they could invest in property and make something of it. Perhaps the income from rent now goes towards food to feed their families, or towards taking care of their elderly loved ones in nursing homes, or towards maintenance and strata fees. Like you do in these blogs, and a lot of the finance blogs I wish the general public would read into the finer details of everything and think where this rental income goes and the consequences. I intend to pay my landlord in full, but when the BC government offer the full details of the $500 discount on rent I will ask the landlord to apply for this as there are 7 out of 8 people in my house unemployed.
This captured a sentiment I’ve seen a lot of lately – “Now’s our chance to fuck the landlords,” people say. “They deserve it because they’ve been fucking us for years.”
I think it’s unwise to think this feeling of antagonism sprang up overnight. Rent has been rising faster than wages for a long time and there hasn’t been much development of affordable rental properties since the 2008 crash. It’s because of a number of different factors that are mostly outside of individual landlords hands but tenants won’t be able to see that. We can talk ’til we’re blue in the face about personal responsibility and the importance of savings but the fact of the matter is that a lot of people are seeing the cost of living go up without seeing an increase in wages. That’s not a sustainable situation in the long term. The pandemic has just highlighted an issue we’ve been ignoring for a long time.
My impression is that nobody involved in this thing is looking like much of a winner. On one hand, you have renters refusing to pay for the roof over their head, despite agreeing to a lease, based solely on the fact that landlords are getting mortgage deferrals. What they’re missing is that these deferrals are merely that; the mortgage is getting extended and additional interest being levied. Do the renters plan on paying an extra month of rent after they move out of their units? Idiocy.
Then on the other hand, you have Canadian amateur landlords, who’ve smugly been strutting around for the last decade bragging about how they have someone else pay their mortgage while their units gained double-digit percentages every year. Renovictions, rental income unclaimed to the CRA, and basically rentier type activity while leveraging themselves to the hilt with no backup plan, “because real estate always goes up!” Well, sometimes there are downsides to things, buttercup. Sorry you thought you were getting risk-free money for nothing.
More than ever, I’m happy to have my own modest little slice of land with four unshared walls built upon it. And even though the chances are quite good that I’ll be laid off for at least a couple of months, I have no intention of begging for a handout beyond the unemployment insurance into which I’ve been paying premiums for the last decade or two.
Many people seem to think the rent strikers anti-Capitalism, but they’re actually the pro-Capitalists. In capitalism, badly run businesses go bankrupt. If you’re a landlord and you’re so incompetent that you don’t have any reserves, you’re supposed to go bankrupt. The taxpayers, which includes most renters, would not be giving the landlords a handout like this in a capitalist system. So really, the landlords are just like the Wall St banksters with privatize the profits and socialize the losses as they take on otherwise irresponsible risks and drive up housing prices beyond what responsible investors would pay. The rent strikers are simply playing tit for tat trying to even the score rather than enacting an economic ideology.
I haven’t bought a house because the prices in my area are hopelessly irrational. So despite having the money to buy a house, I rent. I want to see the jackasses that bought in to sell or suffer the consequences so prices return to normal and responsible people like me can justify buying again instead of blowing my tax dollars. That’s called capitalism. I already spend more on taxes than all other expenses combined, so I think that’s quite enough of my money wasted.
For what it’s worth, I’ve always paid and intend to continue to pay my rent, but don’t begrudge the strikers.
By your definition, pretty much all business deserve to go bankrupt. Care to give an example of a business that would still survive if all of its clients unilaterally decided to stop paying for the services that they are being provided, while the government prevented the business from suing for damages or even from stopping to provide the service that the clients are no longer paying for?
By your logic, isn’t it the renters who deserve to go bankrupt, as they seem to be the ones with so little reserves that they can’t afford to pay the rent they’re liable for?
Maybe what you’re really saying is, “I’m jealous and angry that people took the risk and spent more money on real estate than I was willing/able, and I want them to be hurt for my benefit.” (The giveaway here is your use of the word “jackasses” to describe people who apparently did nothing worse than exchange their money to buy something that you wanted at a cheaper price.)
I also bought a house that you didn’t buy. Do you think you deserve that one, too?
LOL so businesses that are put on the brink of economic collapse because their customers are STEALING from them should just grin and bear it?
Well if you wanna talk some “rise up lord of the flies” type shit, I wouldn’t think twice about shooting you between the fucking eyes. You wanna rob me to prove a point? You better be willing to die for the privilege lol
Boy oh boy are there lots of comments today. I currently rent since 2017 when I sold my house. I realized it was better to take the equity and invest it in ETFs and let my landlord subsidize my housing expense as renting is cheaper than owning.
I have no issues with paying my rent though and continuing to do so.
Here’s the issue I see here. Tenants and landlords who didn’t plan for a rainy day. Shit is going to happen and you need to prepare for it.
As a renter, you should have some savings set aside for between 6-12 months in case something happens where your employment income has been jeopardized. If you haven’t, you’re an idiot and only have yourself to blame. You need to take care of yourself because why would anyone else do it for you if you don’t? Seriously. If your employed, pay your rent and don’t be an asshole.
As a landlord, for fucks sake, you’re running a business. For all you “amateur” landlords who didn’t take this as a serious business enterprise, you need to assess risk and consider what should happen if no rental income is coming in. As with the renter, you should have some savings set aside to cover expenses for between 6-12 months for those rental properties you own in case something happens. If you didn’t, why the fuck should anyone care that you were a stupid moron and didn’t do your homework. You deserve to get crushed.
Now, let’s get to me as I’m sure I’m going to get shit on by some poor bleeding heart saps saying I’m being too harsh and I need to be sensitive to everyone’s personal circumstances. So here goes. I’m 44. I saved my money and invested it. It’s sitting in a globally balanced and diversified portfolio of ETFs which is in the 7 figures. I’m down right now -10.98% which is in the 6 figures. Am I crying and whining about it? NO! I assessed risk and made decisions to weather the downturn best I could. Overall, I’m satisfied with what I did. I have cashflow. If I really had to, I could sell some ETF units and pay my bills but I don’t need to. You know why? I treat my money as a business. I assess risk, cashflow, diversification, liquidity and most importantly, I educated myself on where I was putting money so I wouldn’t have to rely on anyone else and be their hostage. Lastly, I still have my job. I picked a career path that ensured a need of my skillsets and is in very high demand.
So, for me, today’s topic is pretty simple. Prepare for the worst and you will never be disappointed or caught off guard. If you don’t, don’t cry about it.
I know that was harsh but hopefully some of you that were caught with your pants down will learn from this experience and plan differently for the future.
I’m a landlord that has planned for a rainy day but that doesn’t mean I deserve to be taken advantage of. If my tenants were in a tough spot I would help them but if they are just trying to make a point I’m not going to go along with it. If they still have work or are being helped by the government please continue to pay rent is my thought.
Never said otherwise. You picked your tenants. If they take advantage of you, well, you picked them. That’s what running a business is all about. Hope that any goodwill you provided will be reciprocated but don’t count on expecting it.
There are 3 issues here.
1. Landlords need to understand that this is a BUSINESS and like any business you need to have money set aside for hard times. That means at least 1 year of mortgage payments and expenses for each property BEFORE you get paid. One year should be enough time to evict a tenant, find a new tenant, or Sell the property at potentially a gain/loss. That is the risk you take as a business owner. If your goal was to live off the income and didn’t prepare for hard times, then you deserve to get foreclosed on, as you were not a good business person. The landlord that had 32 unit apartment does have the option to sell the complex and I would bet, if they have owned the place for longer than 5 years, they will STILL come out on top. I think many people got into the “landlord” business thinking its ‘easy money’ but don’t realize that it actually takes a few years to really build up the income in order to live off the proceeds properly. Most of these new landlords didn’t think that this scenario of losing ALL rental income would be “possible”, but you MUST plan for the ultimate worst case scenario, not best case or most likely. Personally, I think too many people went into real estate thinking it is easy money and are now learning a hard lesson, finally! The faster the amateurs leave, the quicker the rents will stabilize with more experienced landlords and property prices will adjust.
2. Renters who have jobs and can pay, SHOULD! You signed a CONTRACT, nothing has changed for you! If you join the cause and get evicted after this passes, which it will, what have you won? A couple of months of free rent. What will you loss? You now have an eviction record, so when you go apply for a new place, good luck in getting it as most landlords will pass on you. Hope it was worth it!
3. Renters who lost their job should try to work out an arrangement with their landlords as most are reasonable people, given the situation and the current eviction restrictions. However, I would also argue, what if you got laid off, regardless of COVID-19, what would have been your plan? Execute that!
Everyone needs to take responsibility for their own failures and quit asking for constant handouts!
bigger picture implication. landlords get spooked, some leave the rental market (perhaps for easier to manage stock indices) less supply of units to rent means same number of renters fighting over less homes available, bidding up rental prices. landlords now much more stringent on who they let to, so many existing tenants no longer will be deemed creditworthy enough in future. landlords will also require higher rents too to compensate for this added tenancy risk (much like bond interest higher for riskier corporate debt)
it’s counterproductive as after it all settles it will be more difficult and expensive for tenants. perhaps rents priced too far out that tenants eventually need to buckle up and just buy a home at that point
I believe it’s ethically wrong, unless you are genuinely incapable of paying rent, which is what that no evictions emergency stimulation is designed for.
We live in an RV and rent our landlord’s backyard to have hookups. Our landlord has been nothing but kind to us, in fact we are on week 3 of prescribed complete isolation with COVID-19 symptoms and our landlord has so far fetched two pickup orders and propane for us, without any form of compensation. We have been here for over a year and a half and our landlord has not even raised the rent.
We have an emergency fund set aside so we can maintain necessities in the face of unexpected income loss, and paying rent is one such necessity. Our landlord has been good to us. We will be good to her. It’s the world we want to live in.
Wow, this is quite the ethical conundrum. The US Government gave homeowners (generally more wealthy, though this blog is proof that that’s not universal) a pat on the back and a stroke on the chin, while telling renters to go die in the streets and/or get corona’d. And too many landlords (and, unfortunately, people on the comments to this article) seem to have little sympathy for families being thrown onto the streets. “You should have saved up 6 months of expenses!” people yell, not realizing how expensive it is to be poor. Not realizing that it’s not the wealthiest Americans that are part of that 3.3 million unemployment claim. And let’s see if, with the system so backed up, any of them get that. I’m still waiting for my first direct deposit.
And yet, I find myself siding tentatively with the landlords. If only by default. Unlike mortgage lenders, which are ALL big money lenders (usually banks), landlords can be regular people. Someone who owns a 3 unit property and lives in one of the units, for example. Not poor by any means, but not super wealthy either. It’s one thing to stick it to the banks (and I say that having worked in the banks for a long time). But do we wanna stick it to our fellow Americans, our neighbors and communities so bad? I don’t think so. Plus, how do things like heat and repairs get paid for if you don’t pay your rent? I guess it’s just as much on the landlord to have saved up for all that as it is on the tenants to have saved for a rainy day (or prolonged global pandemic that made worse by the massive failures of two of the world’s largest governments).
Makes me glad I’m not in real estate. I would never want to be a landlord. Rather just collect my stock dividends.
You know, there WAS a policy that could have solved the issue for both sides. I’m a huge proponent of Universal Basic Income, and that money could have been given to Americans and helped with rent payments. Unfortunately, even before the government gave $4 trillion to the largest corporations and threw some means-tested crumbs at the people (surprise, surprise), I heard the most baffling pushback to UBI. To generalize (perhaps unfairly) the landlords as the wealthy capitalists on the Right and the renters as the Bernie-loving socialists on the Left, I heard from “UBI is just another socialist handout for entitled commies too lazy to work!” from the former and “UBI is a capitalist Trojan horse designed to steal from the poor and make billionaires richer!” from the latter. Well, now both sides are reaping what they sow.
I’m not involved in rent from either side of the equation. I just hope the government comes to its senses and enacts a UBI (preferably the way Andrew Yang proposed it when he was running for president) before this turns into full on class warfare between renters and landlords with one side taking to the streets.
Sincerely,
ARB–Angry Retail Banker
Disgusting! tenants don’t pay rent so they can have food on the table… and landlords can’t have food on their table because they don’t get the rent. Landlords had to take on all he risk and pay a lot of money for a property so that tenants can stay for free??
Tenants should try buying a property instead of freeloading off of others…
Tenants pay rent. Landlords profit on that. So do tenants. It’s a good system. Please open your eyes. Landlords are in it for the profit otherwise they wouldn’t be doing this. Do you think landlords are angels from heaven? Your reality seems distorted.
Not to beat a dead horse.
I wish people would think of it this way. People are using the bank/mortgage as an excuse, tying the landlord to the bank.
If I own a house and the bank has nothing to do with it. It is like a apple or a taxi ride. Can people come take my apples and eat them without paying? Can they get in my taxi or Uber and have me drive them across town without paying me? Is that right or is that theft? Is that right or is that wrong?
That’s why if you desire help or charity you ask, you never expect it. If you take something you don’t own or haven’t paid for its called theft. What if that landlord is a grandmother who uses her lifelong investment of a house rental to pay for her nursing home? Should she suffer?
These people’s simple Demand isn’t always so simple.
Just my 2 cents.
Completely see both sides as well but some thoughts:
1. Some landlords will learn a hard lesson. There is no free ride to riches. Buying RE especially in Canada has been touted as the only way to get rich. Buy more properties – rent them out. It’s a no brainer. Properties always appreciate and the tenant pays your mortgage. Ah….. maybe not.
2. How many landlords are fully transparent on their rental “suites”? Not very many I would imagine. Hey, free non-taxed income – awesome ( which is illegal ) que the CRA.
Would you dare complain and try get financial aid from the gov’t?
3. Same with Air B&B. How many amateur landlords out there pimping there rentals out to whoever and whatever. Good luck with that. A big reset on Air B& B in progress.
4. Tenants should also appreciate good landlords and pay up. A good time obviously to negotiate the rent and maybe short term relief but people should have a cash cushion at all times. Yes, easier said than done but that’s what a LOC is for.
5. Have ethics and mutual respect. You’ll regret it later.
Good luck to all. April 2 news will be interesting.
Totally agree.
I’m almost sure these rent strikers are not thinking about the long term consequences of what they’re proposing if they get their way.
Why would anyone want to be a landlord, especially a small time landlord under these circumstances? This will make it harder for smaller landlords to operate, which means big corporations will be the ones with lots of economies of scale will be the only landlords left. That’s the exact opposite of what these folks would intend. Either that, or landlords are going to be more demanding as far as income requirements, savings requirements, deposits, rent paid in advance for multiple months, etc. So, in the long run, I see this movement as ultimately hurting the people it purports to help.
These folks also are also missing a couple of other targets that are behind the steep rent increases in major metro areas in recent years: Zoning laws and NIMBYs. Here in California, the combination of super strict zoning laws, red tape, and NIMBYs have meant not enough housing has been built for 40 freakin’ years, which is why we have America’s highest housing costs.
But these rent strikers never talk or even think about any of the above.
I’m a renter who is fortunate to still be getting paid even though I’m on lockdown. It would definitely be unethical for me to not pay rent. Other people who’ve lost their jobs should renegotiate with landlords, and landlords should be flexible and/or forgiving to the extent they can be, because this is not a normal situation.
While I do have sympathy for people who can’t pay rent, I do think more and more people expect the government or “someone else” to take care of them. This is an ominous trend and it will end very, very, badly if it continues.
This is WWIII and this is humanity fighting against an invisible enemy. We should all work together. My homeowner had to pay mortgage payment but if those payments get deferred I am willing to pay him the interest so he doesn’t take all the hit and while I get a break.
I can’t work due to Covid as well but do have “some” financial cushion. Hopefully we get through this in few months. Remember y’all we have to be our brother’s keepers.
Renters would be homeless without landlords. . If they don’t want to pay rent, they should work hard like landlords to save up enough money to buy their own house, pay property taxes, insurance and maintenance expenses. Lenders are offering forbearance to landlords BUT those missed payments have to be paid at some point! It’s a forbearance and NOT a mortgage freeze. The sad thing is lenders are not giving landlords the option to add payments to the end of the loan period. This means landlords will be stuck with 4+ months worth of payments to make at the end of the forbearance period. Landlords are human too and they have bills to pay and kids to feed like anyone else. Would it be fair if we ask renters to work many long hours and take quality time away from their kids to save up enough money and buy a house for someone else to live in for FREE?!
Why should a renter buy when they can rent? Homeless? That makes no sense. It’s called demand/supply.
Also, your blanket statement That landlords work hard and renters don’t is also nonsense. Let me make a blanket statement in turn. Wasn’t the appeal of being a landlord collecting easy money and not really doing anything? Hasn’t been how it’s been hyped as? And then the landlord finds out that reality does not equate to the fantasy they were sold. Well, if they didn’t do their homework before signing on the dotted line, that’s on the landlord’s head, no one else.
It’s not about working hard but working smart. I guess there are not a lot of smart people.
Working smart? You mean being sneaky? Somebody has to work to create value added products. Someone had to build that place you live in, someone had to mine those minerals your gadget holds. Look at what this whole blog is about. How not to work and retire early. Well that means that YOU’ll be using people while you’ll be blogging about ‘social justice’. Your food needs to physically be worked for while you are blogging.
No landlords were not sold on the ‘easy money’ part, corporations and the media were selling that initially that more people will be buying houses, so that there is a bigger debt load out and then to turn the renter against the landlord. Its is exactly what is happening. The media and the corporations against the local landlord so that they can pay the properties for pennies on the landlord. When properties will go into foreclosure the banks will kick all renters out immediately. But some renters will rather be kicked out and be homeless with the ‘satisfaction’ that the landlord lost to. Its called jealousy.
If you are admitting that renting is cheaper than owning, then ALL that money you are handing over to the landlord clearly cannot all be staying in their pockets.
Similar to dividend stock yield chasing, this is exactly why investors shouldn’t become slumlords simply for high ROI. My properties are all in nice areas rented to professionals who even if they lost their jobs would be able to easily afford their rent, and all have something to lose should they stop paying. Way too many investors are buying cheap properties in GTA such as Brampton and mississauga, and renting to min wage workers who are living paycheque to paycheque.
I worked 3 jobs for 8 years and paid off my mortgage April 2019. In the past year I’ve put away 2 years living expense. I’ve spoken with my tenants and at the moment they’re ok, but I’ll check in on a regular basis and make any necessary changes for them. My job is secure. I’ve never been able to time the market, (I now use dollar cost averaging:) but its become very clear I can time my life. I am thankful for what I have and eternally grateful for the FI community.
I do think workers unemployed by the wujan virus pandemic should get a temporary break from paying rent while they are waiting for their unemployment to start. In the US they are supposed to be getting their full salary in unemployment benefits. Then they need to pay rent. If not, the landlord will remember this and evict them first chance. Not the time for a socialist revolution(Yah! Stick it to the Man, man power to the people!)
“unemployed by the wujan virus“
Coronavirus or COVID-19!
Its simple, I am a renter and as such, I am required to meet my obligation (and agreement) to pay my rent, regardless of the circumstances. Neither my landlord nor the government is responsible to forgive the payment or pay it for me. If you don’t have the money, borrow it or ask your landlord if payments can be deferred. Don’t use this global crisis as an excuse to live rent free.
The concern is why should tenants be paying rent when the landlord isn’t making their mortgage payments. My suggestion is for the tenant to require the landlord to submit to a credit check ($50 non-refundable fee payed by landlord) to prove they are current on their mortgage. This credit check must be updated each month and they must maintain a 700 or higher score in order to stay eligible to receive rental income.
If the landlord’s credit score dips, that means they are delinquent on their mortgage, so there’s no longer a need to pay them any rent.
Why is their cashflow relevant to you meeting your contractual obligations??
How far down the line does it go analyzing another person’s profit margin? The baker only paid 5 cents for the bread ingredients, so you’ll only pay a nickle for a loaf. Apple only paid $50 for making an iphone, so you can drop a $50 note in the store and walk out with the phone.
How about you only need $3000 a month on your lifestyle, so your employer doesn’t need to keep paying you your contractually obligated $5000. Fair right?
Another person’s cashflow has nothing to do with yours.
And with your idea, landlords who own the home outright and don’t have a mortgage don’t deserve any rent because they have no “expense”? Nevermind that they have to feed their kids or support their parent, pay for their medicines or whatever else people need $ for.
The sense of entitlement is as disgusting as it is delusional.
I couldn’t agree more with Basketcase. This country was founded on individual liberty and personal responsibility, accountability for their own outcomes. Business doesn’t work when parties en masse can’t be trusted at their word to fulfill obligations. In turn, this dissuades people from taking the very type of risk that is providing rental opportunities in the first place. Some geographies have a shortage of available housing.
What I am seeing on the part of everyone from large corporations to renters is “not letting a good crisis go to waste”.
I think you should pay if you can. If you can’t pay, well, work with your landlord. That’s how the agreement works. If you really are unable to pay you have an additional 30 days provided by law for eviction. The feds are providing checks and enhanced unemployment benefits. Many people could stay with family. Realistically people may only need to survive 1-3 months. Again, if you can’t pay, you can’t, but a strike is kind of ridiculous.
On the student loan forgiveness, total bullshit. We are going to spend trillions on relief for the 3% of the global population fortunate enough to have a college degree? I was speaking to my gf about this today. The government provides lots of resources through BLS that will tell you everything from expected pay to growth rates to even what your office conditions should be for different careers. CAVEAT EMPTOR Many, many of these students, apart from choosing degrees that may not be lucrative enough to comfortably repay the loan, are using the money for apartments, food, even vacations. And the money is cheap as hell! That is fine I guess as long as you will repay.
The whole reason tuition is high in the first place is because of government subsidies. Too many cheap dollars chasing the degrees. I personally worked very hard to put myself through school. I worked full time at a supermarket, started at an affordable community college, earned a scholarship to a university based on academic performance, and ultimately earned an MBA through corporate sponsorship. Your mileage may vary, but I have always found that the harder I work, the luckier I get. People who want to do it can. Bottom line.
I guess Bill rents then
Can I offer a win-win solution? Landlords drop the rent by 50% so long as utilities are not built in to the rent price. If they are, the drop the rent by 50% after utilities are accounted for. The utilities get paid 100% but while the landlord doesn’t get $0, he also doesn’t go broke.
Only time that could occur is if demand/supply create a circumstance where you pay above market rent. As A renter, you can request a rent reduction from the landlord to bring you to market rent. If the landlord refuses, then it’s up to you to find a new place that suits you within market rent range and move. The prior landlord then comes to the mercy of the marketplace and has to determine the best price to charge to get a quality renter. Demand/supply will determine what his rental is worth either the landlord continues to have an empty unit if demanding above market rent Or finds a new tenant within market rent.
Anything else is a pipe dream.
I think they’ll all pay on April 1st. It’s April fools and they’re just playing around!
Just kidding, haha. It’ll be interesting to see how it actually plays out.
I agree with angry retail banker, a UBI seem to be a needed policy.
While I agree with the need for individual responsability, let’s not forget that a great part of the population has seen an increasingly hostile economic environment: their wage has been decoupled from productivity gain and most of them are poorer than their parents at the same age.
There is systemic fragilities in our economies showned by this crisis and a UBI would help increase resiliency in the economy and would
have allowed to just avoid the actual renting mess.
Nature is a hostile environment. What we have is the most powerful economy in the world replete with opportunity. You can work to improve your station in life and realize that goal. I’m not sure what you mean by decoupled from productivity gains. Does that assertion control for technology? Our standard of living is better than it has ever been, across the economic spectrum. Unlimited quality, TV, streaming music, social media, cheap airfare, a world of knowledge under your thumb, National and State Parks. I could go on. One can live quite happy in America at all levels.
One thing I would like to see us invest in is trade school opportunities. We’ve brainwashed everyone to think college is the only way to make it. Meanwhile my best friend is a small AC contractor making well over 6 figures. Push everyone toward college is another reason for inflated tuition. I mean, if you want to go, I think you should go, but if we had better access and counseling on trades I bet many would be surprised at how well they could do. And having your own business can be a lot of fun, and even have perks over a regular 9 (8) – 5.
Look I know it can be harsh but life is harsh. Look at poverty around the world. But as Milton Friedman put it, no system has been more effective at lifting people out of poverty than free market Capitalism.
Saying landlords get mortgage deferrals is a weak argument. Even if landlords get a mortgage payment deferral they accrue interest. Are these renters expecting to be charged interest on unpaid rent?
The other side is how many Joe’s and Jane’s have become “landlords” ( joke ) Bought with too much leverage and jumped on the RE ride. Foolish and greedy. This obviously doesn’t apply to all but far too many.
This event will be the pivot to re-set RE and this will not only increase supply but adjust prices to more affordable levels.
RE is shelter. Buy a REIT instead.
This movement to not pay rent is unethical. It is rude and ignorant. Those who refuse to pay and don’t, will be lumping in those who truly can’t afford rent with those who are choosing to not live up to the terms they agreed on. Don’t use a HEALTH CRISIS where people are DYING to create your own agenda.
The arguments to not pay are absolutely without logic. I won’t touch the mortgage deferral as a reason because it’s been explained. The rules are simple, when you buy something you pay. This is called being an adult and being responsible. You don’t like the price? Buy something cheaper.
I am a landlord. I provide beautiful, clean well kept places to live for people. It is a service. All 8 of my units paid their rent yesterday. I am not a mean person. I am kind to each one of my tenants, and I reached out to each one to see how they were doing during this crisis. I treat them with respect, because I appreciate they pay my salary. They enable me to pay my mortgage. They respect me because I live up to my side of our contract.
Landlords typically can see both sides because they were also tenants at one time. Tenants in this movement are very shortsighted. Many landlords will be forced to sell homes, if the tenant refuses to pay. Guess what happens to the tenant then, they have no place to live, damaged credit and no landlord reference. Landlords and tenants need EACH OTHER. Get it? They NEED EACH OTHER. So both need to work together with their individual circumstances to get through this.
Preach on, Suz! People love to hate the rich or anyone who has worked hard to improve their station in life forget that it is a two-way street. As you can see on my website I was literally homeless for years, then earned $6.25 per hour when I started. I’m not a silver spoon guy. Today I’m successful and I support all kinds of local and national businesses, which means jobs and improving living across the economic spectrum.
I mentioned in one of my comments above that in many areas there is a shortage of housing. Landlords are entrepreneurs, risk takers that providing a crucial service. The reason a lot of FIRE folks don’t want to own a home are the same risks and costs that landlords incur to give them the benefits of renting.
I also concur that people reneging on commitments en masse distracts from the subset of people that really need help.
I read your experience. Bravo! I agree. My husband and I built what we have without university or college degrees, and without any family assistance as we both grew up “below poverty”. But neither of our families lived in poverty conditions because they learnt how to stretch a dollar and make good financial decisions. I find it aggravating to hear complainers with 1st world problems. There are countries in this world where people cannot break the cycle. We won the birth lottery in that we were born in a place where you can break cycles, work hard and make decisions that change your trajectory.
The majority of people haven’t lost their jobs and can afford rent just like any other month. Freeloaders are the people whose situation hasn’t changed but still choose not to pay rent. However, Landlords should set up a deferred payment plan with those whose situations have changed. If people used logic, there would be no need for a strike.
On the renters side. Landlords take a significant amount of money from our checks. If the economy tanks and millions are out of work, why should landlords not be affected. Landlords should work with tenants to get a reasonable amount if possible. If a person has lost their job, landlords should forgive the rent until the coronavirus has run its course.
I have zero sympathy for landlords
I should add, this is why we need a strong response from the federal government. Landlords, especially mom and pop ones, and renters shouldn’t be pitted against each other because of piss poor government support. Government needs to step in, and in a big way.
Still, renters over landlords. Labor over management.
Renters over landlords…….ok let’s say in your world renters win, landlords lose everything. Where do you plan on living?
Kyle, most landlords, and people in general, were renters at one time. Why, once they achieve some success such as becoming a property owner and investor, do they become less than, or “under” as you put it? I think you need to provide a lot more support to your argument here.
Also, you say they shouldn’t be pitted against one another, then you refer to one party as “over” another. The conclusion does not follow from the premise.
Forgive rent? What does that mean? Do you expect grocery stores to give you free groceries too? Where do you draw the line on what people should do for you? Doctors and nurses should work for free too?
So you have zero sympathy for landlords, but fully expect landlords to feel sympathy for you. Would you say that is being hypocritical?
you know what this gonna mean for you in longterm? landlords gonna jack up rents more to compensate for this added risk you’ve introduced to providing you the service of housing. and many won’t bother to rent at all, scared off, meaning less supply of homes available to you. and less supply always means higher prices. shooting yourself in the foot dude
I hope stocks don’t go on a dividend strike.
Dividends are not the same as a roof over the head. Not even an appropriate analogy. Not even sure what you are getting at with it.
The fight shouldn’t be between landlords and renters to begin with. Gov’t needs to step in and help in a big way with the unprecedented job loss numbers we are seeing.
I don’t give a shit what a landlord feels. My main point is, landlords take a huge chunk of everyone’s paychecks every month. If the economy goes down, they should expect to be affected to. That means working with renters to get what rent they can and not charging rent to people who lost their job due to COVID. Like Superdave says below, if they aren’t jerks and work with landlords they will come out ahead in the long run.
See this guy in Brooklyn: https://www.nytimes.com/2020/04/03/nyregion/coronavirus-nyc-landlord-mario-salerno.html
Getting good press. Not kicking people out of their homes when tens of thousands of Americans are going to die from this virus.
how about you forgive your employer for having to pay your salary too. many businesses having a hard time and may go under
Your main point is lost with your outrageous sweeping statements about not caring about landlords, and having 0 sympathy.
I don’t think some of you get it. Landlords that aren’t corporations, or the small scale landlord who may have lost their job just like you have and NO the mortgage payment deferral is not aoutomatic and not for all. Further, property taxes, utilities and upkeep still need to be paid. Many landlords were loosing money on a month to month basis but kept the properties in hopes of value acceleration. Most people rent as they cant’s afford to own, so what makes people think that the landlords are making ALL this money when you are realising that in the sky high real estate world you are renting because it is cheaper than buying. People don’t get how many landlords just like you are small scale people and much of this money doesn’t stay in their pockets. But the big corporations want the landlords gone, so this is the big stirring the smaller scale out and more for the rich. You’ll see how much rents will cost after all this. Do some thinking people. Only your rent does NOT NEED to be paid but everything else the mega corporations already control SURE does. The media is only compassionate as long as you don’t pay your local guy, don’t worry your small scale company you worked for is already gone and now your small scale landlord will be gone to. Powerful united against the small scale.
many stocks already declared they won’t pay dividends. even after it was declared and after the ex-date had passed. quite unprecedented!
I was a landlord for over 20 years. Got out of it about three years ago, and so glad I did. Here’s what I would have done. Preemptively, I would cut rents by 20%. This business is about building relationships and keeping your customers (i.e. your tenants) happy. Now, instead of being known as the greedy landlord, you are perceived as a compassionate business person. You also need to call each tenant, ask how they are doing, and see if there is anything you can do for them. If you care about people, they will care about you. Here in the US, the govt is providing unemployment of $600/wk + state unemployment of $200 to $300 per week. This is more than most of my tenants made in their full time jobs. So, really there should be no excuse for not paying. But, by being sympathetic and mitigating the situation you will likely come out of this in good shape and have very loyal tenants to boot! I’m sure there are many other good ideas out there on this and I’m eager to hear them all.
Civil unrest will result when everyone lives by individual values!
Prosperity Society requires hierarchal order. Most landlords work very hard to be where they are today.
Prioritized your family needs and collective needs as follow –
1. Foods
2. Water and Electricity
3. Rent
Once COVID-19 is over and it will be with ABSOLUTE CERTAINTY – you need to compensate your landlords for the loss!
Here is an article with differing perspectives on how this financial crisis will impact FIRE. Thoughts?
https://www.bloombergquint.com/onweb/financial-freedom-warriors-fired-up-over-economic-turmoil
Ryan, I’ve given up on presenting alternate views of the approach. They clearly refuse to acknowledge or respond for the sake of maintaining reputation/brand as I’ve learned in my yield shield comments. I appreciate that at least it got through to you. But in some ways, they’re being as bad as the financial advisors touting active investing they love to hate on in this wilful dismissal of any criticism to maintain the delusion. Instead of healthy discussion on the topic to arrive at a better approach, it seems maintaining traffic is the more important consideration at play
A lot of small scale landlords will go bellyup and the banks whom the governments will always back will evict all within 24hrs. Where will you move to then?
Landlords who bought recently needed to ask for those rents just to stay afloat. Its called supply and demand. When a house was going for a million, needed a mortgage, property taxes, insurance and upkeep paid. Do the math ‘millennials’ and see how much it will cost per month. Can you pass grade nine math, because some teachers to become sure can’t. Sad states. This is not united against the powerful, but the sheep herded by the media to make small scale landlords go under, so that they can buy up the properties. The sheep just don’t get it. See how much rent will cost after all this?