High Quality Multi-family REITs - EQR, CPT, ESS, AVB

[thepupil]

potentially so. I'll give you an example in my backyard.

 

Behold this Zillow listing:

 

https://www.zillow.com/homedetails/5500-Friendship-Blvd-APT-817N-Chevy-Chase-MD-20815/37195057_zpid/

 

this is in a well-located but tired building, it is spitting distance from Whole Foods the Friendship Heights metro, etc.

 

$500K gets you a 1200 sq foot 2/2 with some outdoor space that would rent for $2,500 - $3000 (the listing shows a rental at $2,950, I assume someone would rent a little lower than that). If you paid cash, you'd still have a $1000 / month HOA. this is a decent albeit somewhat unhip location. the building was built in 1968. I think its a terrible investment proposition. $2600 /month rent less $1000 HOA = $1600 / month before any other expenses. We're already at an extremely low cap rate. Maybe it goes for lower, but I happen to know a lot of investors own units in this building (let's just say I know a former tenant very well); the units seem to move slowly but they do sell at prices indicating ridiculously low cap rates.

 

Let's walk across the street, to EQR's property (formerly owned by Archstone), Wisconsin Place. Wisconsin Place sits atop Whole Foods (shared parking garage) which also connects to the Friendship Heights metro, which connects to a little retail center that includes movie theater, department store, restaurants, gyms, etc. This was built in 2009 and is in good shape.

 

https://www.equityapartments.com/washington-dc/friendship-heights/wisconsin-place-apartments

https://www.equityapartments.com/washington-dc/friendship-heights/wisconsin-place-apartments##bedroom-type-section-2

 

A 1000 square foot two bedroom is listed for $3600 / month and up. studio's and one bedrooms $2,100-$2,200 and up.

 

this is kind of a contrived comparison using anecdotes, but the first one trades at an 6%-7% rental yield or so and as you point out EQR is closing in on a 9%. But the maintaince and capex and running cost of that 9% are LOWER because the building is newer and the room for error is higher because the rents are high because of the quality.

 

you are buying property in areas where even old kind of tired buildings still command high prices because (in this instance) this is metro-accessible high rent areas with amenities and stuff.

 

and jsut for shits and giggles, you all will be happy to know that GEICO's corporate headquarters is right next to both buildings:

 

 

 

[matts]

Someone sent me a private message about UMH, asking about their occupancy during the GFC. I'm posting my response in case others are looking at it.

 

 

Hey,

 

Please post in the thread so we can all benefit from the info.

 

congrats on the great entry. I also own the D prefs.

 

You can look at the occupancy disclosed in the annual 10-k report on sec edgar

 

the occupancy did not fall significantly in 2009, 2010, or 2011. I was surprised myself. Some people moved out but many moved in to replace them. I was likely because it's so expensive to move these "mobile" homes.

 

The provisions for doubtful accounts did go up during that time, however. They are not a bank so their disclosures don't make it easy to see how those accounts resolved.

 

I think what is different this time vs 08 is that many more people are losing their jobs all at the same time and politicians like Chuck Schumer are on tv telling people they don't have to pay rents.

 

UMH has a significant amount of Fannie/Freddie guaranteed mortgages which allow them to defer mortgage payments if they agree not to evict. I forget if I ever found a % number for guaranteed mortgages but the 10-k shows most of the recent refinances have been with Fannie.

[HalfMeasure]

Well EQR took in 2.7 billion in rents last year. At an EV of 30 billion. That's a 9% gross rent yield.

 

Now if you found a property in EQR's markets that gives you a 9% gross yield don't you buy it in a nanosecond?

 

 

I'm asking for a friend  ;)

 

This is a great point.

[thepupil]

Initial look shows big drop in those paying rent

 

Only 69% tenants paid any of their rent in April's first five days, according to the National Multifamily Housing Council. That compares to 81% in March's first week, and 82% in April's first week one year ago.

• The actual situation for most (tenants and landlords) may be somewhat worse as the data is from a survey of 13.4M investment-grade rental apartments, i.e. likely to be occupied by higher-income tenants.

• While this doesn't necessarily mean a wave of evictions (new laws around the country kind of prevent this), the delinquent rent is likely to move up the chain as landlords then struggle with mortgage payments, possibly setting off a wave of losses in CMBS-land.

[lnofeisone]

potentially so. I'll give you an example in my backyard.

 

Behold this Zillow listing:

 

https://www.zillow.com/homedetails/5500-Friendship-Blvd-APT-817N-Chevy-Chase-MD-20815/37195057_zpid/

 

this is in a well-located but tired building, it is spitting distance from Whole Foods the Friendship Heights metro, etc.

 

$500K gets you a 1200 sq foot 2/2 with some outdoor space that would rent for $2,500 - $3000 (the listing shows a rental at $2,950, I assume someone would rent a little lower than that). If you paid cash, you'd still have a $1000 / month HOA. this is a decent albeit somewhat unhip location. the building was built in 1968. I think its a terrible investment proposition. $2600 /month rent less $1000 HOA = $1600 / month before any other expenses. We're already at an extremely low cap rate. Maybe it goes for lower, but I happen to know a lot of investors own units in this building (let's just say I know a former tenant very well); the units seem to move slowly but they do sell at prices indicating ridiculously low cap rates.

 

Let's walk across the street, to EQR's property (formerly owned by Archstone), Wisconsin Place. Wisconsin Place sits atop Whole Foods (shared parking garage) which also connects to the Friendship Heights metro, which connects to a little retail center that includes movie theater, department store, restaurants, gyms, etc. This was built in 2009 and is in good shape.

 

https://www.equityapartments.com/washington-dc/friendship-heights/wisconsin-place-apartments

https://www.equityapartments.com/washington-dc/friendship-heights/wisconsin-place-apartments##bedroom-type-section-2

 

A 1000 square foot two bedroom is listed for $3600 / month and up. studio's and one bedrooms $2,100-$2,200 and up.

 

this is kind of a contrived comparison using anecdotes, but the first one trades at an 6%-7% rental yield or so and as you point out EQR is closing in on a 9%. But the maintaince and capex and running cost of that 9% are LOWER because the building is newer and the room for error is higher because the rents are high because of the quality.

 

you are buying property in areas where even old kind of tired buildings still command high prices because (in this instance) this is metro-accessible high rent areas with amenities and stuff.

 

and jsut for shits and giggles, you all will be happy to know that GEICO's corporate headquarters is right next to both buildings:

 

Few things here to unpack.

1) Many of the new buildings give 2 months free for a 13 month lease.  They don't' advertise it but if you go to the leasing office it's the first thing they bring up. I have friends who are literally moving apartments every 1-2 years. One of them moved within the same buildings 4 times now (around Mt. Vernon in DC).

2) You hit the nail on the head. The premium here is metro accessibility which in DC is paramount. Getting a similar apartment, 15 minute drive/bus ride will be going for 50% off. Check out 7 corners in Virginia where you are 15 minutes to either blue or orange/silver lines.

3) Here is a fun little special situation right next to a metro - https://www.zillow.com/homedetails/1111-Arlington-Blvd-APT-925-Arlington-VA-22209/2080716875_zpid/

there is a reason, of course. :)

[thepupil]

Initial look shows big drop in those paying rent

 

Only 69% tenants paid any of their rent in April's first five days, according to the National Multifamily Housing Council. That compares to 81% in March's first week, and 82% in April's first week one year ago.

• The actual situation for most (tenants and landlords) may be somewhat worse as the data is from a survey of 13.4M investment-grade rental apartments, i.e. likely to be occupied by higher-income tenants.

• While this doesn't necessarily mean a wave of evictions (new laws around the country kind of prevent this), the delinquent rent is likely to move up the chain as landlords then struggle with mortgage payments, possibly setting off a wave of losses in CMBS-land.

 

I may be weighting this data point too much, but I sized down my exposure by 1/4 at 5-15% profits. Given this is a starter basket approach as I don't think they're quite "cheap" enough, I think it is appropriate to be a little more risk averse. I will await further changes to price / fundamental data to make any more moves. Given the low leverage a 15% move in stock price is basically an equivalent move in the asset.

[matts]

Equity Residential (NYSE: EQR) today announced that through April 7, the Company collected approximately 93% of its monthly residential cash receipts for April 2020 and the Company is working with the remainder of its residents on payment options.

 

http://investors.equityapartments.com/file/Index?KeyFile=403555723

 

I guess they have better tenants than average

 

[thepupil]

Equity Residential (NYSE: EQR) today announced that through April 7, the Company collected approximately 93% of its monthly residential cash receipts for April 2020 and the Company is working with the remainder of its residents on payment options.

 

http://investors.equityapartments.com/file/Index?KeyFile=403555723

 

I guess they have better tenants than average

 

Ha completely missed that, dumbass move on my part, remaining EQR lots are up 27%, AVB up 20%, CPT just a little, Essex up 15%.

 

I’m not going to chase these up, but perhaps more inclined to average down with that datapoint in line with my gut feel/ read of the asset/tenant quality...maybe the hard relief rally is just getting to me

 

 

[matts]

Agreed. By May 1, everyone will know whether their job is steady, or they will have some cash from the feds in their accounts. I'm still a bit worried many will not pay even if they could. You see that already in CRE. This is from a Prologis investor update a few days ago:

 

Look, a substantial amount of that 24% are Fortune 100 companies. And somebody in their legal department probably said, "Send a letter to all your landlords and ask for rent deferral. Why not?" We're not going to give those people. I mean I think people should not use this market condition opportunistically. I think that's really a bad thing to do. I think people should do the right thing. We should be here helping the people that really need help as opposed to trying to extract an economic advantage. We're just not going to stand for that. They're valued customers, but they need to behave themselves.

We're not going to take money out of our shareholders' pockets and put in other major companies' shareholder pockets just because they ask for it.

 

Now landlords have leverage over commercial tenants because "normal" rules still apply. But what about residential where new rules say you can't get evicted if you don't pay? I still worry about that.

[Kaegi2011]

 

Now landlords have leverage over commercial tenants because "normal" rules still apply. But what about residential where new rules say you can't get evicted if you don't pay? I still worry about that.

 

You have a valid point, but if it really gets to that level is there really nothing that can be done as a land lord?  Especially in this high rise buildings, are there no options (cutting internet, for example) to at least force a conversation around ability to pay?  It's one thing to not be able to pay, it's another thing to choose to not pay.  So if one wants electricity or cable or internet, assuming they could be cut off unit by unit, why is a landlord obligated to provide that if the renter isn't paying rent? 

[matts]

 

Now landlords have leverage over commercial tenants because "normal" rules still apply. But what about residential where new rules say you can't get evicted if you don't pay? I still worry about that.

 

You have a valid point, but if it really gets to that level is there really nothing that can be done as a land lord?  Especially in this high rise buildings, are there no options (cutting internet, for example) to at least force a conversation around ability to pay?  It's one thing to not be able to pay, it's another thing to choose to not pay.  So if one wants electricity or cable or internet, assuming they could be cut off unit by unit, why is a landlord obligated to provide that if the renter isn't paying rent?

 

I'm almost sure turning off electricity would open up massive legal liabilities that landlords would lose in court. I know it is illegal in canada to turn off electricity or the heating source to delinquent renters. I imagine it is the same in the US, nevermind during this crisis.

 

As for cable/internet...not sure how it works in US, but again in Canada, most renters even in apartment buildings have individual agreements with their telcos. yes, technically the buildings allow the telcos to run their hardware through common areas, but the rent is separate. landlords would have no legal right to turn off a third party service. Is it generally different in the US? Is the internet explicitly bundled with rent?

 

 

[Kaegi2011]

 

Now landlords have leverage over commercial tenants because "normal" rules still apply. But what about residential where new rules say you can't get evicted if you don't pay? I still worry about that.

 

You have a valid point, but if it really gets to that level is there really nothing that can be done as a land lord?  Especially in this high rise buildings, are there no options (cutting internet, for example) to at least force a conversation around ability to pay?  It's one thing to not be able to pay, it's another thing to choose to not pay.  So if one wants electricity or cable or internet, assuming they could be cut off unit by unit, why is a landlord obligated to provide that if the renter isn't paying rent?

 

I'm almost sure turning off electricity would open up massive legal liabilities that landlords would lose in court. I know it is illegal in canada to turn off electricity or the heating source to delinquent renters. I imagine it is the same in the US, nevermind during this crisis.

 

As for cable/internet...not sure how it works in US, but again in Canada, most renters even in apartment buildings have individual agreements with their telcos. yes, technically the buildings allow the telcos to run their hardware through common areas, but the rent is separate. landlords would have no legal right to turn off a third party service. Is it generally different in the US? Is the internet explicitly bundled with rent?

 

Obviously case by case basis here and we're generalizing, so it's prob not great to extrapolate.  However, if the reason why renters aren't paying is b/c they think the courts will be stuck with too many cases, then it goes for landlords too.  ANd in terms of liabilities - outside of physical harm (so heat being one of the "Essential" items), what could be claimed?  No legal expert here but can someone really claim that they are entitled to free rent?  Again, I'm not suggesting that this is just a legal issue.  If I were a landlord and I have tenants who I know are employed, able to pay, and won't even have a conversation about rent and is telling me to go pound sand to take advantage of a pandemic, then I have no problem letting him or her know that electricity is not a "right."

 

In terms of internet / cable - depends on the building.  Many large buildings include it as a part of the rent / HOA.  It's just easier to negotiate on behalf of 100 units and get economies of scale and service. 

[KJP]

 

Now landlords have leverage over commercial tenants because "normal" rules still apply. But what about residential where new rules say you can't get evicted if you don't pay? I still worry about that.

 

I believe it will make a big difference who the tenants are.  Many people in the US are effectively judgment proof, because they have no assets.  So, it's ordinarily a waste of time to sue them, and that is why debt buyers generally can buy debts for pennies on the dollar.  But there are others who do have plenty of assets and very good credit ratings.  This is the group that, for example, can't simply give the keys of a house back to the bank if its underwater (at least in states that have recourse mortgages).

 

My understanding of the thesis articulated in the original post was something like EQR likely has many fewer judgment proof tenants than something like NEN and so should be priced accordingly.

[BG2008]

 

Now landlords have leverage over commercial tenants because "normal" rules still apply. But what about residential where new rules say you can't get evicted if you don't pay? I still worry about that.

 

You have a valid point, but if it really gets to that level is there really nothing that can be done as a land lord?  Especially in this high rise buildings, are there no options (cutting internet, for example) to at least force a conversation around ability to pay?  It's one thing to not be able to pay, it's another thing to choose to not pay.  So if one wants electricity or cable or internet, assuming they could be cut off unit by unit, why is a landlord obligated to provide that if the renter isn't paying rent?

 

Dude, what state and city do you live in?  You will be skinned and boiled alive for even thinking about cutting off utilities etc as a landlord in NYC.

[lnofeisone]

 

Now landlords have leverage over commercial tenants because "normal" rules still apply. But what about residential where new rules say you can't get evicted if you don't pay? I still worry about that.

 

You have a valid point, but if it really gets to that level is there really nothing that can be done as a land lord?  Especially in this high rise buildings, are there no options (cutting internet, for example) to at least force a conversation around ability to pay?  It's one thing to not be able to pay, it's another thing to choose to not pay.  So if one wants electricity or cable or internet, assuming they could be cut off unit by unit, why is a landlord obligated to provide that if the renter isn't paying rent?

 

I'm almost sure turning off electricity would open up massive legal liabilities that landlords would lose in court. I know it is illegal in canada to turn off electricity or the heating source to delinquent renters. I imagine it is the same in the US, nevermind during this crisis.

 

As for cable/internet...not sure how it works in US, but again in Canada, most renters even in apartment buildings have individual agreements with their telcos. yes, technically the buildings allow the telcos to run their hardware through common areas, but the rent is separate. landlords would have no legal right to turn off a third party service. Is it generally different in the US? Is the internet explicitly bundled with rent?

 

Making unit uninhabitable by landlord is called constructive eviction and opens up landlord to civil lawsuit/liabilities. Depending on the state these could very stiff.

[matts]

 

Now landlords have leverage over commercial tenants because "normal" rules still apply. But what about residential where new rules say you can't get evicted if you don't pay? I still worry about that.

 

You have a valid point, but if it really gets to that level is there really nothing that can be done as a land lord?  Especially in this high rise buildings, are there no options (cutting internet, for example) to at least force a conversation around ability to pay?  It's one thing to not be able to pay, it's another thing to choose to not pay.  So if one wants electricity or cable or internet, assuming they could be cut off unit by unit, why is a landlord obligated to provide that if the renter isn't paying rent?

 

I'm almost sure turning off electricity would open up massive legal liabilities that landlords would lose in court. I know it is illegal in canada to turn off electricity or the heating source to delinquent renters. I imagine it is the same in the US, nevermind during this crisis.

 

As for cable/internet...not sure how it works in US, but again in Canada, most renters even in apartment buildings have individual agreements with their telcos. yes, technically the buildings allow the telcos to run their hardware through common areas, but the rent is separate. landlords would have no legal right to turn off a third party service. Is it generally different in the US? Is the internet explicitly bundled with rent?

 

Obviously case by case basis here and we're generalizing, so it's prob not great to extrapolate.  However, if the reason why renters aren't paying is b/c they think the courts will be stuck with too many cases, then it goes for landlords too.  ANd in terms of liabilities - outside of physical harm (so heat being one of the "Essential" items), what could be claimed?  No legal expert here but can someone really claim that they are entitled to free rent?  Again, I'm not suggesting that this is just a legal issue.  If I were a landlord and I have tenants who I know are employed, able to pay, and won't even have a conversation about rent and is telling me to go pound sand to take advantage of a pandemic, then I have no problem letting him or her know that electricity is not a "right."

 

In terms of internet / cable - depends on the building.  Many large buildings include it as a part of the rent / HOA.  It's just easier to negotiate on behalf of 100 units and get economies of scale and service.

 

All due respect, I think you are just thinking about this incorrectly and i doubt you have ever been a landlord. There is absolutely a double standard. No one thinks tenants are entitled to free rent. But the government has mandated that you can't evict them. So no, you can't cut off their electricity because that is how they would boil water, see in the dark etc. That's not part of your recourse. Your recourse is eviction and it is the government that has taken that recourse away from you. You cut off their electricity, and the only thing you will get is a giant lawsuit for "pain and suffering" once the courts get back to work. Whether electricity is a right is not up to you to determine.

 

In Ontario

 

https://stepstojustice.ca/questions/housing-law/can-my-landlord-cut-my-electricity-or-other-utilities

 

In california (i suspect the rules are very similar in all other states)

 

https://homeguides.sfgate.com/illegal-landlord-shut-off-electricity-61431.html

 

"Electricity is an essential service to make a rental unit habitable.

 

Turning off the electricity as punishment for non-payment of rent or in retaliation for filing a complaint is tantamount to constructive eviction. Constructive eviction occurs when the landlord makes the residence uninhabitable in an effort to remove you from the property. Legal eviction requires the landlord jump through specific legal hoops to get you out. Constructive eviction bypasses these requirements by forcing you to find new accommodations.

 

Every state provides its own legal recourse for tenants who are aggrieved by the landlord. California Civil Code 789.3 makes it illegal for the landlord to shut off the electricity to force a tenant out of the property. You may sue your landlord in civil court for actual damages, attorneys fees and other damages if he does so. The statute allows an amount up to $100 per day for each day the electricity was turned off ."

 

The next point is I'm not suggesting anyone is stupid enough to tell their landlord "I can pay, but I just won't." They will tell you their hours were reduced, their aunt has the virus and she needs help etc. And you can't ask them for financials to prove anything like you can with a commercial tenant. They don't need to provide proof of anything. If they don't pay, your recourse is to go through the courts. You can't change the tenant-landlord bylaws just because the courts are closed.

 

 

[Kaegi2011]

YOu're all right - not a landlord, never been a landlord, never want to be a landlord (at least directly).  Also never missed rent when I was renting, so total ignorance here for sure. 

 

Is internet access considered essential service?  Is there nothing that is available to a landlord outside of the courts? 

 

BTW - renting was when I lived in TX, so maybe the laws / enforcement is different from rest of the country.  I just remember even getting some basic stuff fixed was a real pain.  Perhaps this is also because the apartments were very cheap, so you sort of get what you pay for, and I certainly had no money to go sue... 

 

Edit - to be clear, I'm not advocating just forcing someone out because they can't make payment.  If I'm a landlord and I underwrote a tenant based on his/her financial situation, then I made that call and it's my responsibility to bear.  However, if *having a conversation* is too much, then that's when I become unsympathetic.  I'm merely trying to tease out ways in which to force a conversation.  Perhaps that's not legal in any form, but if I'm being screwed over then I'm going to use whatever legal means I do have to hit back...

[Kaegi2011]

 

Now landlords have leverage over commercial tenants because "normal" rules still apply. But what about residential where new rules say you can't get evicted if you don't pay? I still worry about that.

 

You have a valid point, but if it really gets to that level is there really nothing that can be done as a land lord?  Especially in this high rise buildings, are there no options (cutting internet, for example) to at least force a conversation around ability to pay?  It's one thing to not be able to pay, it's another thing to choose to not pay.  So if one wants electricity or cable or internet, assuming they could be cut off unit by unit, why is a landlord obligated to provide that if the renter isn't paying rent?

 

I'm almost sure turning off electricity would open up massive legal liabilities that landlords would lose in court. I know it is illegal in canada to turn off electricity or the heating source to delinquent renters. I imagine it is the same in the US, nevermind during this crisis.

 

As for cable/internet...not sure how it works in US, but again in Canada, most renters even in apartment buildings have individual agreements with their telcos. yes, technically the buildings allow the telcos to run their hardware through common areas, but the rent is separate. landlords would have no legal right to turn off a third party service. Is it generally different in the US? Is the internet explicitly bundled with rent?

 

Making unit uninhabitable by landlord is called constructive eviction and opens up landlord to civil lawsuit/liabilities. Depending on the state these could very stiff.

 

Got it.  Having said that, if courts are packed for a while, isn't this also going to take a long time?  What will they do in the interim?  Are tenants better off just coming to an agreement with the landlord based on ability to pay?

[Kaegi2011]

 

The next point is I'm not suggesting anyone is stupid enough to tell their landlord "I can pay, but I just won't." They will tell you their hours were reduced, their aunt has the virus and she needs help etc. And you can't ask them for financials to prove anything like you can with a commercial tenant. They don't need to provide proof of anything. If they don't pay, your recourse is to go through the courts. You can't change the tenant-landlord bylaws just because the courts are closed.

 

Let's play this out. 

 

Me - Hi Matt, I haven't seen a payment for this month, are you having financial difficulties?

Matt - Yes, reasons XYZ

Me - Understood.  Sorry to hear about your financial difficulties.  I want to work with you through this crisis.  Can you show me something that shows you've been fired or furloughed or some bank statement showing a decline in income?  Let's see what we can work out. 

Matt - No, you have no right to any financial information of mine. 

Me - Well you may be right, but I'm trying to work with you.  You submitted your financial information along with your credit history at time of rental, and so you don't have to provide it, but it'll make it easier for us to work through this together. 

 

Is that unreasonable? 

[matts]

YOu're all right - not a landlord, never been a landlord, never want to be a landlord (at least directly).  Also never missed rent when I was renting, so total ignorance here for sure. 

 

Is internet access considered essential service?  Is there nothing that is available to a landlord outside of the courts? 

 

BTW - renting was when I lived in TX, so maybe the laws / enforcement is different from rest of the country.  I just remember even getting some basic stuff fixed was a real pain.  Perhaps this is also because the apartments were very cheap, so you sort of get what you pay for, and I certainly had no money to go sue... 

 

Edit - to be clear, I'm not advocating just forcing someone out because they can't make payment.  If I'm a landlord and I underwrote a tenant based on his/her financial situation, then I made that call and it's my responsibility to bear.  However, if *having a conversation* is too much, then that's when I become unsympathetic.  I'm merely trying to tease out ways in which to force a conversation.  Perhaps that's not legal in any form, but if I'm being screwed over then I'm going to use whatever legal means I do have to hit back...

 

I don't think you are a bad guy for brainstorming your recourse as a landlord. But i think, unfortunately, your last sentence is correct. You are just screwed as a landlord here. Which is why i bring it up as a concern. As someone mentioned, the one thing that DOES scare tenants is a hit to their credit score, IF you rent to the kind of person who has a score and cares about it.

 

From a little bit of googling, if internet access in specifically mentioned in the lease agreement then it can indeed fall under "utilities" and therefore be included under the shadow eviction clauses of most city/state bylaws. It's not black and white however.

[matts]

Let's play this out. 

 

Me - Hi Matt, I haven't seen a payment for this month, are you having financial difficulties?

Matt - Yes, reasons XYZ

Me - Understood.  Sorry to hear about your financial difficulties.  I want to work with you through this crisis.  Can you show me something that shows you've been fired or furloughed or some bank statement showing a decline in income?  Let's see what we can work out. 

Matt - No, you have no right to any financial information of mine. 

Me - Well you may be right, but I'm trying to work with you.  You submitted your financial information along with your credit history at time of rental, and so you don't have to provide it, but it'll make it easier for us to work through this together. 

 

Is that unreasonable?

 

Let's play this out more realistically:

 

Me - Hi Matt, I haven't seen a payment for this month, are you having financial difficulties?

Matt - Yes, reasons XYZ

Me - Understood.  Sorry to hear about your financial difficulties.  I want to work with you through this crisis.  Can you show me something that shows you've been fired or furloughed or some bank statement showing a decline in income?  Let's see what we can work out. 

Matt - I don't have any paperwork to prove to you my boss cut my hours in half. (or) My business revenues are way down. My aunt is sick, you want me to ask her doctor right now for a note? 

Me - Well you may be right, but I'm trying to work with you.  You submitted your financial information along with your credit history at time of rental, and so you don't have to provide it, but it'll make it easier for us to work through this together. 

 

Matt - I'm doing my best here man, but you know, it's a tough time. My family is scared. My wife won't stop crying. Sorry, but there is nothing I can do here. I'm doing all I can, but my rent will be paid as soon as I am able. I hope you understand. BTW, I hear the government has announced some programs to help you out so maybe look into that. Stay safe. Matt

 

[lnofeisone]

YOu're all right - not a landlord, never been a landlord, never want to be a landlord (at least directly).  Also never missed rent when I was renting, so total ignorance here for sure. 

 

Is internet access considered essential service?  Is there nothing that is available to a landlord outside of the courts? 

 

BTW - renting was when I lived in TX, so maybe the laws / enforcement is different from rest of the country.  I just remember even getting some basic stuff fixed was a real pain.  Perhaps this is also because the apartments were very cheap, so you sort of get what you pay for, and I certainly had no money to go sue...

 

In many homes, internet goes beyond just browsing (think alarm systems, Alexa, etc.). In many locales tenants sign up and pay for utilities and cutting that off can be challenging (have to validate identify) and all. Long way of saying, landlords should stick to courts.

[Kaegi2011]

Let's play this out more realistically:

 

Me - Hi Matt, I haven't seen a payment for this month, are you having financial difficulties?

Matt - Yes, reasons XYZ

Me - Understood.  Sorry to hear about your financial difficulties.  I want to work with you through this crisis.  Can you show me something that shows you've been fired or furloughed or some bank statement showing a decline in income?  Let's see what we can work out. 

Matt - I don't have any paperwork to prove to you my boss cut my hours in half. (or) My business revenues are way down. My aunt is sick, you want me to ask her doctor right now for a note? 

Me - Well you may be right, but I'm trying to work with you.  You submitted your financial information along with your credit history at time of rental, and so you don't have to provide it, but it'll make it easier for us to work through this together. 

 

Matt - I'm doing my best here man, but you know, it's a tough time. My family is scared. My wife won't stop crying. Sorry, but there is nothing I can do here. I'm doing all I can, but my rent will be paid as soon as I am able. I hope you understand. BTW, I hear the government has announced some programs to help you out so maybe look into that. Stay safe. Matt

 

HOurs cut in half - ok, so based on the information you submitted during time of lease, that's a $xxx reduction in income.  I assume some of your other expenses are down as well, so can you pay 50% and we'll put the balance to be due later, and have another conversation next month? 

 

Aunt sick - really sorry to hear, hope she feels better.  Listen I know it's tough time for everyone, but I also have people I need to pay to run the building, people who are in equally tough situation as you, and I'm trying to not cut them back.  Also I have to pay the bank, etc.  How long do you think you're in a place to start paying?  If it's 6 months from now I will not have any choice but to start an eviction process. 

 

I like the credit score point.  And I'm not trying to paint this as a black and white picture - I realize that it's state by state and said that extrapolating is probably not a good idea previously.  I just think there are ways in which different situatiosn can be worked through vs. not doing anything on non-paying tenants. 

[Kaegi2011]

YOu're all right - not a landlord, never been a landlord, never want to be a landlord (at least directly).  Also never missed rent when I was renting, so total ignorance here for sure. 

 

Is internet access considered essential service?  Is there nothing that is available to a landlord outside of the courts? 

 

BTW - renting was when I lived in TX, so maybe the laws / enforcement is different from rest of the country.  I just remember even getting some basic stuff fixed was a real pain.  Perhaps this is also because the apartments were very cheap, so you sort of get what you pay for, and I certainly had no money to go sue...

 

In many homes, internet goes beyond just browsing (think alarm systems, Alexa, etc.). In many locales tenants sign up and pay for utilities and cutting that off can be challenging (have to validate identify) and all. Long way of saying, landlords should stick to courts.

 

So perhaps I could have clarified that my comments are for the securities listed in the title of this thread.  If it's a single family it's a different story.  However, if it's a high rise in NY it's very likely that tenants do not have a choice on their internet provider.  It's either bundled in rent, or it runs through the central infrastructure of the building (with one provider and zero choice unless cellular).  Having listed in 6 different buildings in NY that has consistently been the case (4 bundle with cable, 2 individually billed, but zero choice on provider). 

[matts]

Let's play this out more realistically:

 

Me - Hi Matt, I haven't seen a payment for this month, are you having financial difficulties?

Matt - Yes, reasons XYZ

Me - Understood.  Sorry to hear about your financial difficulties.  I want to work with you through this crisis.  Can you show me something that shows you've been fired or furloughed or some bank statement showing a decline in income?  Let's see what we can work out. 

Matt - I don't have any paperwork to prove to you my boss cut my hours in half. (or) My business revenues are way down. My aunt is sick, you want me to ask her doctor right now for a note? 

Me - Well you may be right, but I'm trying to work with you.  You submitted your financial information along with your credit history at time of rental, and so you don't have to provide it, but it'll make it easier for us to work through this together. 

 

Matt - I'm doing my best here man, but you know, it's a tough time. My family is scared. My wife won't stop crying. Sorry, but there is nothing I can do here. I'm doing all I can, but my rent will be paid as soon as I am able. I hope you understand. BTW, I hear the government has announced some programs to help you out so maybe look into that. Stay safe. Matt

 

HOurs cut in half - ok, so based on the information you submitted during time of lease, that's a $xxx reduction in income.  I assume some of your other expenses are down as well, so can you pay 50% and we'll put the balance to be due later, and have another conversation next month? 

 

(I wait, 2 or 3 days to get back to you) Unfortunately, I don't have savings and my boss is a bit late on his payments to his employees as I'm sure you can understand. sure, I will try to pay as soon as I am able, so maybe that paycheck from trump is coming. Thanks for your understanding

 

Aunt sick - really sorry to hear, hope she feels better.  Listen I know it's tough time for everyone, but I also have people I need to pay to run the building, people who are in equally tough situation as you, and I'm trying to not cut them back.  Also I have to pay the bank, etc.  How long do you think you're in a place to start paying?  If it's 6 months from now I will not have any choice but to start an eviction process.

 

(also wait a couple days) Thanks for your understanding and well wishes.  I feel your pain and I really want to pay,  but I also have car payments, drugs for my family i need to refill (i don't have medical insurance). I think that check from the feds is coming any day now and so what i don't need for my basic necessities (which i won't list for you) I hope i can catch up on at least some of the rents. Let's touch base then. 

 

I like the credit score point.  And I'm not trying to paint this as a black and white picture - I realize that it's state by state and said that extrapolating is probably not a good idea previously.  I just think there are ways in which different situatiosn can be worked through vs. not doing anything on non-paying tenants.

 

This roleplaying is fun. All of the above assumes the guy even takes your calls.