COVID-19 Tenant Rent Payment Performance Update through October 2021

2021-11-22

COVID-19 Tenant Rent Payment Performance Update through October 2021

We truly hope you appreciate our extra efforts to keep you informed about the COVID impact on tenant rent payment performance. There are a lot of issues outside of our control, but we want to communicate to keep you informed. Please send us any suggestions for what additional information you’d like to see.

Please be sure to share this with anyone you know interested in real estate investing or looking for a better property manager, so they can see what they are missing!

EVICTION MORATORIUM UPDATE

Michigan still has no eviction Moratorium!

Despite the federal eviction moratorium ending, several states have enacted their own eviction moratoriums – some of them through the end of the year. Thankfully, Michigan has not done so.

Unfortunately, judges in the City of Detroit’s, 36th District Court still seem to be following their own agenda. We had an eviction hearing at the end of October, adjourned until the end of January! Why? To give the tenant more time to apply for CERA funds. We were not allowed to present our evidence that this tenant has avoided all our attempts to get them to apply! We do NOT understand the judge’s logic.

Judges are also refusing to sign Writs of Eviction if the landlord doesn’t have the Certificate of Compliance from the city, yet are not following their own rules about requiring these tenants to escrow their rents.

GOVERNMENT AID FOR PAST DUE TENANTS

For the most part, we seem to be getting COVID Emergency Rental Assistance (CERA) approvals and checks relatively fast. The nonprofit organizations processing applications and distributing funds seem to be running smoother.

If you’re waiting on these funds, please pay attention to the communications we post on your portal. Several of our clients seem to ignore our communications and contact us wanting updates we’ve already given them. While we pride ourselves on our communication efforts, this just SLOWS us down!

DETROIT NOTE: Most CERA application caseworkers are only paying 80% of eligible funds if a property doesn’t have its Certificate of Compliance from the city – some only 50%. After months of warning our clients this could happen, many now want us to perform miracles and get their properties inspected and repaired ASAP. Has anyone not heard that there is a labor shortage in the USA? We’re doing our best, but please be reasonable with your expectations😊

RENT PAYMENT TRENDS 30-60-90+ Days Behind – thru September 30, 2021

We added 16 units to our management portfolio last month.

We saw a slight dip in Paid-in-Full tenants, most of them slipping into the 30-Day Late category. Our 60 to 90-Day Lates remained unchanged and there was a very slight uptick in those being 90+ Days Late.

Part of this is due to those tenants we’ve already obtained CERA funds for, still not paying their rents. This is a disturbing trend, but fortunately, limited so far. One of these tenants submitted a 2nd CERA application on their own and we’re cooperating with it. We’re anxiously monitoring it to see if it’s actually approved. If it is, we’ll try it with all eligible tenants!

Rent Payment Update

Macomb County Rent Payment Performance

Macomb County: It was good news on every metric! Tenants paying full rent increased after dipping in August and September. We didn’t have any tenants pay partial rent but did see a significant decrease in those that paid zero rent.

We believe tenants are finally understanding that they have no eviction protection and the courts (outside of Detroit) are pushing forward with evictions.

Rent Payment Update

Oakland County Rent Payment Performance

Oakland County:  We had a very slight improvement in tenants paying full rent with a corresponding decrease in those paying zero rent. Partial rent payments remained unchanged.

Rent payment update

Wayne County Rent Payment Performance

Wayne County: While there’s been a 3-month improving trend of Paid Full Rent and Paid Zero Rent, we know much of it is due to CERA funds we’ve received. Tenants paying partial rent are unchanged. We’re diligently monitoring and taking every step possible to encourage tenants to pay or move.

Rent Payment Update

It’s interesting the numbers for Macomb County are now nearly the same as Oakland County, while we’re not surprised Wayne County lags behind. Much of what we manage in Wayne County is in Detroit. This is why we warn investors that while Detroit has higher rates of return, it also has higher risks.

FAVOR: If you have a property that has seen an improvement in rent delinquencies, please take a moment to give our Delinquencies & Evictions Department a compliment for all their hard work. They spend their days dealing with a lot of negativity from tenants (and some owners), so a bit of positive appreciation from you would go a long way to make their day!

 CASH-FOR-KEYS:  If you’d like to explore getting rid of a tenant NOW versus waiting for the end of the Eviction Moratorium, contact us about paying delinquent tenants to move. Yes, it’s frustrating to have to do, but we’ll analyze the business case for you to determine if it makes sense.

For those of you that have contacted us to explore Cash-for-Keys offers to nonpaying tenants, we hope you appreciate our well-thought-out procedure. We have had some outrageous requests from tenants, but our procedure is designed to account for that and protect you legally.

Again, please refer us to others you know interested in real estate investing or that are looking for a better property manager!

 

 

 

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