How Will the COVID-19 Virus Impact Landlords?

The coronavirus epidemic has affected the entire world, and it keeps changing every day. In only a week or two, the whole situation might change completely. However, we should still discuss how the pandemic is affecting the real estate industry as its economic impact will have lasting effects.

We wanted to focus mostly on how the COVID-19 virus is affecting landlords. We'll tell you what we know at this moment and what the current predictions are for your industry. However, you still need to continue to update yourself as the situation progresses.

Keeping that in mind, let’s take a look at how the pandemic is currently, and will affect landlords:

The Current Situation

As you're probably already aware, the coronavirus pandemic is affecting everyone's livelihood, either directly or indirectly. What's worse, it's becoming more and more likely that the pandemic will also bring about a recession.   Whether it will be a long term recession, or we will bounce back quickly is a topic that is being greatly debated.

However, even though the times ahead appear that they will be hard, it's not the end of the world. We will certainly survive as long as we stay safe and informed and work with one another. 

As for the real estate industry, most tenants and landlords are having trouble already, but it's still too early to see how these issues will affect landlords in the long run. 

What Does the Future Bring?

When it comes to tenants, whether those in residential or commercial units, as time passes, many will have trouble paying their rent. That's especially true for those who are currently unable to work. Many industries are struggling to survive the lockdown measures because their employees cannot perform their jobs at home. 

With that in mind, tenants in residential units with jobs such as those, along with tenants in commercial units whose businesses cannot operate during the pandemic will have the hardest time. That also means that their landlords will have problems because they won’t be able to collect rent from their tenants who may not have the means to pay.

Furthermore, the lack of rent will mean that many landlords won’t be able to meet their mortgage obligations due to decreased rent based income. 

What's sure is that the government will protect tenants from being evicted during the pandemic, especially tenants in residential buildings. What's more, there are some emergency measures (Federal Stimulus Package has been approved, and is in the works to get out to those in need) that will financially assist many businesses, and business owners including landlords.    

The Bottom Line

Nothing is certain at the moment, but what we do know is that the economy will recuperate after the pandemic and the resulting recession. 

Landlords and tenants will need to work together to devise a “Win-Win” methodology and/or lease amendments so that we can all weather this unprecedented period and come out stronger. 

For more information, you can reach us at info@cbicommercial.com.