Real Estate Investing Multi-Family Real Estate

Property Management during COVID-19: Showing Empathy while Protecting Investments

Despite the pandemic, in most ways, it’s business as usual at Rastegar Property’s dozens of Austin-area residences. Yes, a lot has changed in a short amount of time, and we’ve quickly pivoted to practice safe social distancing. As a result, the bottom line has continued to grow. This has been made possible through a transparent, flexible, and unique communication strategy – an innovative plan we created for resident communication during the time of a global crisis.

Empathy and communication are top priorities when it comes to our business partners and our tenants. A record number of Americans are unemployed – a rate that’s reached 14.7 percent. Numbers we haven’t seen since the Great Depression could make some landlords feel uneasy about residents’ ability to pay rent, despite economic relief packages like  the CARES Act. As a result of the current climate, we acted in a pre-emptive manner, executing the following plans:

  1. We sent out an initial note, letting our residents know – through clear and transparent communication – that, “we know times are hard, but rent is still going to be due.” We hinted we would work with them, but the bottom line was – rent is still due.
  2. Next, we followed up with letters to let people know if they had an outstanding balance and didn’t follow up about a payment plan, then we would file eviction within 60 days. In a normal situation, people would only have three days.
  3. As a result of our 2nd letter, several tenants did follow up and request a payment plan. That’s when we told them that our payment plans included options that would provide them the time needed to catch up on all rent payments.

To learn more about our property management practices during COVID-19, connect with a member of our team today!

Compassion – along with best business practices to secure our payments – is why we chose enough time for residents to catch up on payment plans. Strategically, we made sure not to divulge all of our plans immediately, first feeling out the environment with our residents, while trying to make the smartest business decision.

In all, we over-communicated with our residents. But unlike our competitors, we didn’t immediately send out a letter that talked about grants and federal funding programs. In our opinion, a lot of companies made the mistake of divulging their plans too soon. Showing understanding is important, but you need to set the stage to handle each resident’s circumstances on a case-by-case, individualized basis.

Many of our residents have told us that they were pleasantly surprised as we spoke with them on that individualized basis. Our teams could hear how stressed some of them were feeling. That’s also why we decided to not charge late fees. The loss from not charging late fees has been minimal. And not charging extra late fees has increased the likelihood that full amounts of rent will be paid, creating a win/win situation for all parties involved.

Good public relations efforts can go a long way, especially in a city like Austin. Happy residents will show appreciation, potentially returning the favor through loyalty. Renewed leases cut overhead costs and word of mouth is a large factor in many rental markets, including Austin. Positive word of mouth also affects industry employees, who may feel conflicted if they are asked to do something that conflicts with individualized morals, especially during a time of crisis.

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Ari Rastegar
Author:

Ari Rastegar

Ari has built a portfolio network designed to reduce risk and provide strong quarterly cash flows, with an emphasis on asset classes such as self-storage, multi-family, office, retail, and industrial. He’s been recognized for his specialties in recession-resilient strategies and commercial real estate investments.