Does Section 8 Pay During A Pandemic?
First and foremost, if you're reading this post I wish you Health, safety, peace and comfort at this time.
The USA COVID19 quarantine has most of us questioning the return on a few of our real estate investments over the next few months. Rentals in particular. If they will sustain this period and how so. I have been getting a few calls and emails specifically regarding Section 8 payments. Are they going to proceed in lieu of the agency's physically being closed? Will they be late? In Michigan payments are typically released between the 1st and the 5th of each month. My company has received ALL scheduled Section 8 payments for this month and they were timely. So to simply answer the question, yes section 8 still pays during a pandemic.
If you were in the midst of establishing the tenancy at the start of the pandemic you may have definitely experienced a delay in the 1st release of funds. It could easily be accredited to the timing of the release and the banks new restrictions/closure, agency workers becoming infected, etc. Also if you were in the middle of resolving an account issue that had to be corrected through MSHDA you would have experienced a delay out of the normal in response to COVID-19.
Many tenants have experienced unexpected job suspension or lost, family death, infection, child care loss, etc. This includes some Section 8 recipients who have a rental portion due in addition to the agency's portion. In that case you may want to exercise some of the tips mentioned below if they are experiencing hardship during this time. I suppose the results of COVID-19 will definitely affect the return on the residential rental investments for at least 3 months following the quarantine order release.
Below are 3 tips to use to help your tenants who have been affected by COVID-19, and your relationship with them. We are all in this together. We all have our good tenants along with our bad ones. Just the same, some of us are good landlords and some of us are not. The bottom line before, during and after COVID-19 is we all need one another. You wouldn't have rental income if your tenant didn't pay. Tenants wouldn't have a home if they don't pay.
Payment Plan or Partial Payment acceptance:
Many tenants are still expecting tax refunds. Many tenants have filed for unemployment and will begin receiving benefits. Some tenants will return to work before the full quarantine is released. I have a tenant that just found a job amidst COVID19 offering janitorial services! Compose a payment agreement that actually works for the tenant. Unorthodox times cause for unorthodox methods of business at times. So typically we want a large down payment, and or large monthly payments for a quick pay off. However, the commitment is just as important as the amount. Say your tenants says they can only pay $200per month for the next 2 months, but they are expecting funds from one of the methods I mentioned above and would like to do larger balloon payments in the 3 months following to remedy the balance. Compromise and sign. If the tenant wants to commit, half of the battle has been won.Reduce or Cancel Late Fees:
Reduce or excuse late fees for the next 3 months or a time period that you think will best benefit your tenant. Again, communicate with your tenant to learn their situation. The most successful landlord tenant relationships come from efficient communication.Change The Due Date:
After 6mo's of accurate monthly payment history I allow my tenants to change/choose their monthly due date on the regular. After all who knows their finances better than one self. Allowing the tenant to choose their own due date can greatly reduce delinquency, late fees, evictions, etc.These tips are meant to help landlords not hurt them. So only extend your hand in the best manner fit for your business, and family at this time. You also know your tenants best! We can't give some of our tenants an inch because they will take a mile, in the words of my granny. All the Best.
Malaka Green
"She's Your Realtor"
Status Realty Group
mipropertystatus.com
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