Millions of Americans are struggling with housing security. In June of this year, surveys found that around 15% of Americans were behind on rent. As rent prices continue to rise year-over-year, this problem may get worse.
This is especially important to know if you're a landlord because there's a good chance that one of your tenants will have trouble making rent at some point. This raises an interesting question, though. What are you supposed to do if one of your tenants can't pay rent, especially if you don't want to jump right to eviction?
You actually have a few options when handling this situation. We'll discuss them more in this article.
Open a Dialog
If you're serious about helping your tenants and collecting rent, the first thing you need to do is sit down and talk to them. Most people don't want to miss rent; they just can't pay rent. With inflation rising faster than wages, times are tough, and many people are having financial difficulties.
Having a conversation with struggling tenants can help you reach an agreement that benefits both of you. Let's face it, evicting a tenant doesn't do much for you until you get someone else to move in. In the meantime, the current tenants live there rent-free until the eviction is finalized.
Working out an agreement with your tenants might allow you to come up with a payment plan or similar arrangement where you recoup at least some of your losses, and the tenant doesn't get kicked out.
Payment or Barter?
When working out a deal for rent collection with a tenant, you should consider both the tenant's needs and yours. Does the tenant have the ability to make smaller payments? Is there anything else you need more that they could help you with?
In many cases, landlords will allow their tenants to work off their debts by doing lawn work, financial work, or other tasks for which they're qualified. For instance, a lawyer can help in different ways than a plumber.
Paying the Mortgage
The important thing to know when becoming a landlord is that they pay mortgages on their properties, and the funds for those mortgages come from rent. The good news is that in Florida, this is far less of an issue because mortgage rates for landlords are much lower in Florida than in most other states.
If you absolutely need it, there are mortgage lenders who can help. While you will need to pay back their loans at some point, it will buy you some time.
What to Do With a Tenant Who Can’t Pay Rent
Struggling to pay rent is, unfortunately, a common problem these days. The good news is that you don't have to evict a tenant if they can't pay rent. We've discussed some ways to help your tenants in this article, but real estate is complicated, and there's always more to learn.
We encourage you to look around while you're here and see what interests you. Feel free to contact us if you have any questions or concerns. We'd be happy to help.