Remain Strong in a Crisis With Property Management, D.C. Investors!
Avoiding every potential crisis isn't possible when you own rental properties in D.C. Seasoned investors can learn best practices to help minimize the effects of a crisis, but truly 'averting' a crisis isn't always an achievable reality.
When a widespread disaster or recession happens, property investors can't batten down the hatches and wait for it to pass or hope that the effects of a crisis won't impact their residents or investment property business. Instead, successful investors must plan ways to get through a crisis: ignoring or responding passively to disaster can quickly become costly.
We've experienced plenty of challenges so far this year. If it hasn't been your best year as a rental property owner, there's no need to give up hope quite yet. Planning for a crisis with expert insight from property management, D.C. investors, can help you survive and recover better in the event of another recession. It's never too late to be prepared—even if you're still working your way through a current crisis.
Small or significant, any crisis can impact your income if you don't have a plan! Here's how D.C. investors can collect the rent and successfully navigate through a crisis.
Planning Alleviates the Impact of a Crisis
Protecting your income and helping residents make it through a recession is hardly enjoyable—or pleasant. However, with a disaster plan in place ahead of time, you can alleviate the impact of a crisis.
It Could Be Worse—So Don't Let It Be
- Thinking about the worst that can happen doesn't mean you should expect this outcome as inevitable: it simply makes you a wise investor.
- The middle of a crisis is never the best time to discover that you don't have actionable goals in play. It's also not the time to leave your D.C. residents without clear direction or a plan to help them pay the rent (as is occasionally even required by law).
If the recent recession or a previous crisis left you unsure of how to operate your business while sustaining a loss of rental income, you're already familiar with this pain point.
A crisis can make investors feel like they don't have control over when (or if) renters will pay the rent. When your residents struggle to make their rental payment, you don't have the cash flow you need to make mortgage payments and pay other rental property expenses.
Property investors have to take control before a crisis threatens your investment income. You can't predict when a crisis will happen, but you can plan how you'll respond accordingly if it happens. When things are running smoothly, you have an opportunity to take time and create a plan to put in action when circumstances out of your control force you to change your business-as-usual protocols.
With the assistance of property management, D.C. investors, map out a crisis plan that includes:
- A communication plan for residents
- A way for residents to easily pay the rent on time
- A modified operational plan to maintain services for residents
- Enough cash reserves to offset a short-term loss or reduction of rental income.
A crisis is a challenging time for D.C. investors and renters, but it can also be an opportunity to impress your residents with a high level of service. Even if circumstances require minimizing or completely eliminating in-person contact, your renters will appreciate a proactive plan to help them work through financial challenges under your leadership as the property owner.
Communication Is Critical
Silence can create fear of the unknown for your renters. Let them know you know what's going on—and that you have a plan to get through challenging times together.
Your crisis plan must include a way to communicate with your residents. Skilled property management, D.C. investors, can help you create a schedule that adapts to the specifics of a crisis. Develop content templates for emails to inform your residents promptly and consistently.
Rental Payments Must Continue
It might be an unpopular opinion with your renters, but even during a crisis, the rent is still due. When you have a strong lease agreement, the rent collection details are ironclad. However, in a crisis, how the rent collection happens is up to you!
- Some of your residents will suffer job or income loss during a crisis, while other residents will not experience financial strain.
- Regardless of a renter's situation, your job as the property owner is to collect the rent on time.
However, an empathetic approach during a recession can go a long way toward building positive relationships with renters. Flexibility and kindness can also help you get paid—even if the short-term solution reduces your rental income to help renters make it through a critical bottleneck.
Create Payment Plans for Struggling Renters
Payment plans should never be a blanket offer to all of your renters—even in a crisis. However, when a renter informs you that they've lost a job or had a reduction in their income, a payment plan is an excellent way to help them pay some of their monthly rental amounts for a short time. It may even end up being a requirement under the law that you work with your renters in this fashion.
Professional property management, D.C. investors, can help you develop a payment plan for struggling renters.Making it easier for renters to pay the rent benefits you! During a crisis:
- Document an adjusted payment schedule for residents who need it
- Put an end date on the adjustment and confirm all details 'in writing' to avoid errors
- When the plan ends, work with residents to pay the full amount of rent owed for the lease term.
Payment plans keep your cash flow consistent while offering flexibility to residents! However, make sure you don't reduce payments more than you can afford. Remember that cash reserve amount in your crisis plan? Use it to help offset a short-term reduction in rental income.
Manage Residents and Expectations
Sometimes a crisis makes it impossible to operate 'business as usual.' When operations must change temporarily, property investors need to manage resident relationships and expectations.
No matter how out-of-control the circumstances might be, you are still in control of your properties and protocols. Residents will react based on your professional approach and plan of action. In most cases, your excellent residents will work with you and understand that a crisis requires change for everyone.
However, in some cases, other residents might react poorly and use a crisis to take advantage of the situation. Bad residents might:
- Cause property damage
- Ignore the rules of the lease
- Stop paying the rent (even though they can afford it)
- Allow more people to move into your property (to 'help' friends or family during tough times).
'Professional Tenants' are happy to take advantage of a crisis! However, during a recession (as we've seen), the D.C. Council might put a moratorium on evictions. Remember: even if you can't evict, you are still in control.
- Document lease violations and nonpayment of rent.
- When it's safe to evict, make sure you take action to remove bad residents from your properties legally.
- For residents who cooperated and adjusted to your crisis plan, make sure you let them know you appreciate them!
As professional property management, D.C. investors, we recommend sending thank-you notes or small, thoughtful gifts to build relationships with residents to encourage lease renewals after the crisis.
Don't Forget the Basics
Even with all of the adjustments you'll make to succeed despite a crisis, don't forget the basics! D.C. property owners can't step away from tried-and-true best practices during a crisis. It's critical to maintain a thorough screening process and consistent, professional marketing—even if it feels like the world is spinning out of control.
People will still need places to live in our nation's capital—and you need to make sure you place only the best quality renters in your property. Scammers love to take advantage of a crisis! Don't let the panic of income loss push you to choose a new renter quickly without a thorough screening process.