Real Estate

San Antonio Landlords: 4 Urgent Steps to Protect Your Investments

3 Mins read

No property investor has been immune to the effects of the COVID-19 pandemic. Even if your tenants are paying rent on time and in full, there’s no guarantee those payments will continue.

There’s always a possibility that lockdowns will return. If that happens, the economy will take another dive and more tenants could be out of work.

So the current situation is chaotic for investors. Quite a few haven’t received any rental income in roughly a year, yet not all of their tenants are legitimately protected by the eviction moratorium.

Unless a landlord can prove beyond a shadow of a doubt that a tenant is gainfully employed, it’s apt to be a losing battle to try to get that rent money.

We repeat, the pandemic is hitting investors hard. If you’re going to protect your investments from further impact, here’s what you can do.

1. Hire a property management company

No matter how long you’ve been an investor in real estate, it’s tough to fly solo. Being a landlord isn’t easy in the best of times, and it can be overwhelming in uncertain ones like ours this year.

By hiring a property management company, you’ve essentially outsourced all your landlord duties and tenant interactions to a team of experienced professionals.

The tumultuous condition of evictions is one of the main reasons to hire a property management team now. If and when it comes time to evict tenants for not paying the rent, a property management company will handle evictions according to San Antonio law.

Currently, there’s a sea of confusion with regard to eviction procedure. In February 2021, a federal judge in Texas ruled that the national eviction moratorium is unconstitutional.

However, no injunction followed the ruling to halt the moratorium. Since then, the moratorium has been extended through June 30, and it might get extended further.

The biggest obstacle to navigating evictions is that Texas courts are proceeding with all evictions, and ignoring the CDC’s moratorium. This presents an obstacle course for landlords, because pursuing an eviction in spite of the CDC’s order could come back to bite you, especially if you do it at all improperly.

Property management companies know local and state eviction laws inside and out. If you decide to evict a tenant, your property management team won’t make the careless mistakes that could hurt you later.

2. Make a deal with non-paying tenants

If you’ve got tenants who aren’t paying rent, try to work something out with them. Your tenant might be able to pay partial rent if they’re working part-time.

If you’ve never discussed the option of paying partial rent, don’t avoid the conversation. Your tenant might be withholding rent because they fear you won’t accept anything less than the full amount.

Consider expressing a willingness to amend the lease and change the total amount of rent your tenants are required to pay. Maybe full rent is normally $1,200 and you drop it down to $600. That’s a big loss for you, but if you haven’t been getting anything, then it’s worth making the adjustment.

3. Sell your investment properties

You didn’t buy your investment properties to let tenants live in them rent-free. But if that’s your reality in the Era of Covid, your hands are tied by the eviction moratorium.

To break even or prevent massive financial losses, you may have to sell your properties. According to data published by CNBC, 11% of property investors have had to sell at least one of their properties to stay afloat the past year.

There’s no way to know if the eviction moratorium will be expanded several more times, perhaps even into 2022. Is it worth the risk?

How long can you go without rental income before you get so behind that your property is no longer profitable? If you’re already in the hole, you might want to get out before things get worse.

4. Buy a small property

Your existing investment properties might be a lost cause. However, you may want to consider buying a small property in an area where unemployment is low.

This would give you a fresh start with a new investment property and you’d be able to find a tenant who has an income. You’ll probably pay a premium for any property right now, so the smaller the better.

It could be your only chance at surviving the impact of the pandemic as a real estate investor.

Don’t hold back if you need to sell

It’s frustrating to be forced to give up rental income. If you’ve already lost $10,000 or more in unpaid rent, it’s going to take quite a bit of time to recover that lost income. It may not even be worth the effort.

If it looks like you have to sell your property to prevent bigger losses, don’t hesitate. You can always buy more later, when the economy restabilizes.

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Larry is an independent business consultant specializing in tech, social media trends, business, and entrepreneurship. Follow him on Twitter and LinkedIn.