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Home · Property Management · COVID-19 · It’s Getting Worse. Landlords and Renters Drain Savings to Make Ends Meet Amid Covid-19

The struggle to pay rent and meet mortgage payments continues as the COVID-10 pandemic stretches into its sixth month according to a nationwide survey conducted in August 2020 by Avail.

Based on the survey, of the 2,932 renters, the largest group of respondents (31.6%) were between the ages of 30 and 39. And 35.2% (the most common response) of respondents had a total household income ranging from $24,000-$49,999 before taxes last year.

Of the 2,225 landlords, the largest group of respondents (45.1%) were age 60, and over and their total household income before taxes last year fell between $24,000 and $150,000.

The majority of renters and landlords surveyed in this report currently reside in California (17.1%), Illinois (7.9%), New York (6%), and Florida (5.9%).

Renters and landlords share the same financial pressures.

Out of the 2,919 renters, 31% could not pay their full rent in August, and 12% of landlords surveyed went into forbearance on at least one of their mortgaged rental properties. “Incomplete rent payments are more popular due to COVID-19, increasing by 93% between March and May 2020, alone.” According to a previous study by Avail.

The future does not look bright for renters or landlords.

The survey results revealed that 18.9% of landlords are concerned that renters will not be able to pay rent, as well as renters not being able to their rent in the future (24.9%). Further, 64.2% of renters stated the main challenge they face in paying rent is due to a loss of employment or reduced income during July.

In August, 61.9% of renters also said another challenge was balancing paying rent and other regular expenses, despite being employed and working 30 hours or more during the time of their survey response.

Savings accounts are being drained.

In order to make ends meet both renters and landlords are dipping into their savings to make rent and mortgage payments. 42% of renters are using savings or emergency funds to make monthly rent payments. 38% are borrowing from friends and family, 31% are getting help from the government and 21% are finding new sources of income. 15% are paying rent with a credit card. And, 35% of landlords who responded to the survey are using savings or emergency funds to cover payments.

This economic crisis due to the COVID-19 pandemic not easy for either party, “I don’t know how much longer I can keep this flow of money going,” writes a tenant respondent from Maryland. “I finished my forbearance and now paying a mortgage and now the tenants are struggling paying rent” writes a landlord from Ohio.

Landlords are trying to be supportive to renters.

In the Avail survey, 38.6% of landlord respondents offered deferment plans to renters and 41.5% of landlords offered to change the rent payment schedule or pattern. The next popular option was to defer one or more months of rent which according to the survey 33.2% of landlords did. And 31.3% offered discounts on one or more months of rent and 13.9% would forgive one or more months of rent entirely.

It is still uncertain times. States are still deciding on whether or not to extend COVID-19 eviction moratoriums. Renters feel like they have been hung out to dry fearing impending evictions. And landlords worry about getting enough money to maintain their rentals and the loss of their investments.

Source: globest.com

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