While I’m a lawyer by trade, my wife and I also own a handful rental properties. A few days ago we were having dinner when an idea occurred to us both at the same time: “Our country is at war with an invisible enemy. America is in lockdown. We need to help our tenants who are now, or soon will be, facing real financial trouble.
“Let’s waive April’s rent. We can contact our tenants and tell them to not pay the rent for April as it is forgiven. We’ll call it the ‘Beaver Family Stimulus Package for Our Tenants.’”
And that’s exactly what we did, immediately reaching out to our Pasadena, Calif.-based property manager, Jon Anthony Dolan, and instructing him to phone and email our tenants.
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The next day, we heard from some very happy tenants, some in tears. “Is this for real? Are you serious?”
Of course, we were serious. In fact, we want to encourage other landlords who have the financial ability to do the same thing. That’s why we were so glad when word got out, our local newspaper, the Bakersfield Californian, ran the story (opens in new tab), and I was interviewed on local TV stations KBAK and KERO.
Of course, not all landlords are in a position to follow suit, as many depend upon their tenants’ rent to pay the underlying mortgage. But my law practice has many clients who own fully paid for rental units and do not depend on the rent to maintain their standard of living.
And the Results?
Following the newspaper article and television interviews, “The Beaver Family Stimulus Package” went viral. I’ve gotten phone calls from all over the country and ABC News wanting info. I’ve heard from landlords across town and across the country. Here are two local examples of what resulted from those news stories:
“We were kicking this idea around,” said Jeremy Price, general manager of Alpha Media in Bakersfield, “and then we read the article. That’s what we’re doing with our rental. You motivated us, Dennis!”
Bakersfield estate planning attorney Patrick Jennison — whom I interviewed for my recent column Coronavirus Legal Advice: Get Your Business and Estate in Order Now — sent this email:
“Your generosity in forgiveness of rent led us to conclude that we should do something like that. And that’s what we are doing with a townhouse we own in Southern California. We let the tenants know that for the next two months we would have them pay 50% rent, and they are thrilled. Our expenses stay the same, as even with full rent the place does lose money each month, but God has blessed us, and we can take the hit. I am sure their income has taken a dive like so many people.
“We have all been given so much. Thanks for encouraging us to share.”
In addition, a dentist, who asked to remain anonymous, canceled an overseas vacation and when she receives the refund, will distribute the money to her staff, who are all staying home.
A Helpful Landlord Assures Keeping Good Tenants
It is fair for a landlord to ask, “If I do this, what’s in it for me?”
Having many clients and friends who own rental property, I’ve learned the secret to retaining good tenants and seldom having trouble being paid rent on-time: If something is broken, fix it! Do the right thing. Show that you care about your tenants’ welfare. In this crisis facing all of us, those landlords who do will have the best tenants ever!
Remember: Helping each other during this coronavirus crisis is a win-win for all of us. What can you do to help the cause?
This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.
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