Ali Ata Sympathizes With Small Landlords As Tenants Struggle To Pay Rent Amid Coronavirus Pandemic

As unemployment rates catapult due to the coronavirus outbreak, Ali Ata notes that some laid-off employees struggle to pay the rent. Small landlords are taking the brunt.

No cash nor credit

Unlike real estate companies or investment trusts that possess numerous rental assets, mom and pop landlords have neither the credit nor cash available to offset the costs when the rent payments are not met.

There are approximately 8 million sole landlords in the U.S. who own anywhere between one to 10 properties. They manage and own half of the rental properties available in the nation and house approximately 48 million renters, according to software company Avail, that sells them online rental platforms typically used by bigger landlords.

Stop paying rent

Ali Ata shares that Avail held a survey in the tail-end of March of about 3,000 small landlords and about 7,000 of their renters. A large percentage of the tenants share that they have been laid off due to the coronavirus pandemic. Of those, approximately a third say that if they could not afford to, they would stop paying rent. A few said that they would look to friends or family for assistance, while some said they did not know what to do.

That leaves millions of landlords high and dry. Most have pending loans on their properties, and though some can apply for the government’s leniency program, it still won’t make up for all of their expenses, Ali Ata notes.

Worried landlords

Most mom and pop landlords do not make a large sum of money from rent payments. They use that money to cover their costs and bank on the properties’ appreciation for future gains, says co-founder of Avail, Laurence Jankelow.

Laid-off employees will receive stimulus checks from the CARES Act, on top of reinforced unemployment benefits. Still, Ali Ata notes that some landlords are worried that renters will stop paying rents because several states have appointed a stay of evictions.

Need to work with your Bank

Most banks are offering assistance to their customers. Depending on the situation and tenancy, banks are offering deferral of parts or all mortgage payment for three months.