Home / Daily Dose / Missed Payments, Financial Stress Straining Investors & Landlords
Print This Post Print This Post

Missed Payments, Financial Stress Straining Investors & Landlords

money in the pocketMore than one-third of landlords have not received 100% of rent payments during September, according to new data released by the Urban Institute and Avail, a property management platform.

In an October survey of 1,381 landlords who own rental properties, 35.2% of respondents said they did not receive the full amount of rental payments from tenants during September, while 38.1% were not expecting to receive full rent payments in October. More than three-quarters of respondents stated their September situation was due to tenants who were struggling financially during the ongoing COVID-19 pandemic and either did not or could not make full rent payments.

The survey also found 18.6% of landlords reported their vacancy rates have increased since the start of the pandemic. The combination of non-paying tenants and vacant units has created great financial stress on landlords, with 31% of survey respondents admitting they felt more pressure to sell their properties during the pandemic than before the crisis started.

However, higher-income landlords and those without a mortgage were under less pressure to sell their properties. More than 47% of landlords with under $50,000 of income reported increased pressure to sell, while just over 20% of landlords with income of $150,000 or more stated they were pressured. And a little less than one-third of landlords with a mortgage said they experienced increased pressure to sell their properties, whereas slightly more than one-quarter of respondents without a mortgage experienced the same stress.

Despite the increased vacancy rates, landlords are not rushing to fill empty units, with 35.6% if respondents tightening – 30% of respondents demand higher credit scores and 50% expect higher income relative to monthly rental rates. The survey also found Black and Hispanic landlords were more likely than their white counterparts to intensify the screening process, by a 50% to 35% measurement. But the survey also noted that Black and Hispanic landlords are more likely to own two-to-four-unit rental buildings in lower-income communities where eviction rates are higher.

As for the near-future, 37% of landlords feared the remaining months in 2020 will see the continuation of their problems due to the extension of the federal eviction moratorium, while 34.5% cited the expiration of pandemic-related unemployment insurance benefits as the primary source of their dilemma.

About Author: Phil Hall

Phil Hall is a former United Nations-based reporter for Fairchild Broadcast News, the author of nine books, the host of the award-winning SoundCloud podcast "The Online Movie Show," co-host of the award-winning WAPJ-FM talk show "Nutmeg Chatter" and a writer with credits in The New York Times, New York Daily News, Hartford Courant, Wired, The Hill's Congress Blog and Profit Confidential. His real estate finance writing has been published in the ABA Banking Journal, Secondary Marketing Executive, Servicing Management, MortgageOrb, Progress in Lending, National Mortgage Professional, Mortgage Professional America, Canadian Mortgage Professional, Mortgage Professional News, Mortgage Broker News and HousingWire.

Check Also

Federal Reserve Holds Rates Steady Moving Into the New Year

The Federal Reserve’s Federal Open Market Committee again chose that no action is better than changing rates as the economy begins to stabilize.