A question about rent forgiveness

What about landlords?

I knew the UC bonus was a crock. Have you heard anything about landlords?

I'm a landlord.  (Although I prefer "real estate investor".)

My wife and I own 10 properties, 14 total units - one of which is our residence.  We "rescue" houses in our neighborhood that are at the point that even the flippers don't want them.  (Structural issues, etc.)  We employ one person full time to do the renovations.  (I'm too damn old.)

At the end of March, I was a basket case.  I was terrified that most of my tenants wouldn't pay the rent - given the advertising of the moratorium on evictions.  The District Justice courts were closed, so I couldn't evict anyone with or without a moratorium - so it infuriated me that they would advertise that fact.  We could afford to pay the mortgages for a month or two, maybe three, with no rental income.  But after that, we'd be in default.  Everything we've built (literally and figuratively) over the past 20+ years was in jeopardy.  

To answer question #2 - there's also a moratorium on foreclosures.  However, if you don't pay the mortgage  you're just delaying the inevitable.  If I had mass non-payment of rent, that would stack up and when the moratorium was lifted I could evict the tenant.  Unlikely I would get the back rent, at least not in the short term.  But I would have to pay the back mortgage payments or risk foreclosure.  Hopefully the lender would work with me to get current, since they don't want to repo a property any more than I want to have it repo'd.

To answer question #1 - yes, I think the stimulus helped my tenants pay the rent.  Few of my tenants were unemployed - I looked like a genius in planning for a pandemic because most (if not all) of my tenants were "essential."  (I didn't plan it that way . . . but it sure looks like I did!)

So April 1 rolled around and if anything, rents came in faster than normal.  I got every dollar that I was owed.  That trend has continued to the present - all of August's rent is paid.  That's five months straight.  I was able to cut back on the Xanex at that point.  (Mostly kidding.)

I have had four tenants move out since the pandemic began.  I have had no trouble re-renting those units at higher monthly rents than the previous tenant was paying.  In addition, I've begun requiring two months' security deposit - the highest amount allowed by PA law.  I refuse to rent to people who are presently unemployed, and favor those who are employed in an "essential" position.  (I'm doing that on purpose from here on out.)

The current moratorium on evictions expires August 31.  I fully expect His Royal Majesty Wolf to extend it again.  Fortunately I don't have anyone I'm waiting to evict at present.  It's my understanding that I can still evict for lease violations that are unrelated to the payment of rent - property damage, illegal drugs, unauthorized pets or humans, etc.  I'd like not to have to test that understanding, and so far that has not been necessary.

I've always been nervous at the beginning of every month, due to the huge amount of dollars we have flowing out the door to pay mortgages.  "Nervous" went to "frantic" in late March . . . and has since settled down to closer to the normal level of nervous. 

Through some combination of luck, good management, and government largesse - we're in better financial shape now than we would have been sans pandemic.  Amongst property owners, I think we are most likely in the minority on that score.  Over the years, I've often thought about shifting my focus to commercial properties - I'm VERY glad I never got around to acting on that!!

Hey MD,

I’m glad that things are going well. I remember how frantic you were early on. That explains it.

So if most landlords are doing well, then what protections are there for the Banks?

Serious question.