The COVID-19 pandemic has impacted every facet of our lives, especially our finances. Unemployment claims are still trending upwards, and nearly 20 percent of renters—almost 15 million people—are behind on their rent. That puts immense pressure on landlords.
Jeff Cronrod of the American Apartment Owners Association (AAOA) is acutely aware of the situation. “COVID-19 has had significant negative effects on the rental property industry,” he said. “With perhaps catastrophic ones on the horizon.” Mediaplanet asked Cronrod about ways landlords and property managers can get through this unique and challenging moment in history.
When asked about the specific ways the COVID-19 pandemic has affected the rental property industry, Cronrod said it’s too soon to have a clear picture, but he thinks the impact will go far beyond the properties in question.
“At this point, it is impossible to calculate the economic losses that have already been absorbed and those that will hit the industry over the next few years,” he explained. “Loss of rental income has a domino effect that jeopardizes the property owner’s ability to maintain the property, pay the debt on the property, and maintain cash flow to provide income for his family.”
One way that the pandemic has affected rental properties is the amenities that tenants see as valuable and necessary. “Pre COVID-19 there was an emphasis on luxuries such as gyms, valet and concierge services, and additional security,” Cronrod noted. “Since COVID-19 tenant amenities have given way to rationing the use of common areas like gyms, pools, and common recreation areas.”
Aside from security, which Cronrod stated is always a priority, the new approach to amenities is more practical than luxurious. “Managers are spending much more on cleaning and adding touchless entry systems and contactless service,” he said.
Under new management
When asked about how managers and landlords should adjust their approach, Cronrod noted that property managers are actively working to deal with pandemic-related problems.
“The vast majority of the members polled by AAOA indicate they are working with tenants to mitigate their financial situations on a case by case basis,” he said. “Many are deferring or reducing rent or offering offsets like having a tenant do property maintenance in lieu of rent.”
In terms of increasing tenant satisfaction in what he called “uncharted waters,” Cronrod said the AAOA is a great resource for property owners and managers. “Tenant satisfaction is more focused on safety and cleanliness than ever before,” he said. “The AAOA’s Virtual Rental Housing Conference and Expo, scheduled for October 14-15, will have several breakout sessions and guest speakers that will be focusing specifically on tenant satisfaction during COVID-19.”
Such information-sharing events are crucial, as Cronrod sees the potential for trouble down the road.
“We see most people working together to get through the current crisis, but very few are planning how to deal with the long term impact for both sides.”