Did you know? According to a recent analysis from Moody’s Analytics and the Urban Institute, approximately 18% of renters are behind on their rent. Including utilities and late fees, the average delinquent renter in the U.S. owes about $5,600. On average, this equates to about 4 months of rent payments. In total, an astounding $57.3 billion is owed by just more than 10 million renters. To put this into perspective, this is far more than the approximately 7 million homeowners who lost their properties to foreclosure during the subprime mortgage crisis and the ensuing Great Recession. It should also be added that this was over a 5-year period of time.
Help on the way?
In one of his first executive orders, President Biden extended the Centers for Disease Control and Prevention’s current eviction moratorium through the end of March 2021. Of course, this is unlikely to be long enough and it is believed by many that it will get extended again.
With various relief bill packages recently approved, there have been funds allocated towards housing relief for tenants and landlords. Unfortunately, landlords continue to be overlooked which is leading to inability to pay mortgage payments in many cases. With the majority of landlords being “mom and pop” investors, this has been considerably devastating.
Summary
Not surprisingly, delinquent tenants tend to be lower-income Americans with children. The economic devastation caused by the pandemic has hit lower wage earners particularly hard. Although there is no easy solution to this problem, there are various strategies that both landlords and tenants may employ in order to try and navigate these times. In some cases, landlords may want to consider applying the last month’s rent and even a security deposit towards rent. In addition, tenants may also propose a payment plan to help catch up on late rent payments. As always, tenants should also consider a secondary income to help offset these living expenses.
Are you a landlord or considering becoming one? Now more than ever, you may benefit from our consultation. At Live South Florida Realty, Inc. we are extremely experienced in real estate investing and rental-income properties. Contact us today!
