It is undeniable that the impact of the most recent global pandemic of coronavirus has negatively affected not just the health of the human race, but all the aspects of our lives.

With the rise of unemployment due to establishments shutting down and big corporations on the verge of bankruptcy, our economy is slowly collapsing. A lot of us are struggling with how to survive our day to day lives. With limited resources and physical limitations brought about by the new normal, we have no choice but to adapt and find ways to make ends meet.

One industry, in particular, is badly hit by the economic crisis: rental real estate. Tenants are having a hard time paying rent because they got laid off from work, while landlords struggle to keep their business afloat due to insufficient cash flow.

As mentioned earlier, we need to adapt to the new way of life and not let the disruptions caused by this pandemic get the best of us. Whether you’re a landlord or a tenant, there are several steps you can take to deal with the current situation.

For Tenants

Reexamine your lease agreement.

Before you approach your landlord, review the leasing contract you signed. You are under an agreement with your landlord with specific terms and conditions. Reviewing the lease will refresh your memory on your rights and help you make a better judgment on the course of action you will take.

Check if rental payments have cure periods, which is the period after rent is due when you can still secure payment without incurring penalties or late fees. Review if there are certain conditions when you are eligible for lease modifications like temporary rent relief, rent reductions, or early termination without penalties.

Be also aware of force majeure rights, which relates to fortuitous circumstances beyond your control that prevent you from fulfilling a contract.

Put your bargaining power to good use.

Since everyone is experiencing a certain level of desperation, most of us will take something over nothing at all. Grab this opportunity to negotiate. For you, it’s a choice between reduced rent with a roof over your head, or no rent at all but homeless. For your landlord, it’s either they are left with vacancies and no income or enough cash flow to cover mortgage and property maintenance to keep the business going with still a small chance of gaining profit. Find a middle ground with your landlord.

For Landlords

Review the lease and negotiate with tenants.

The same with the steps that tenants should do, you need to be on the same page with your tenants. Communicate your struggles and expectations so that they will cooperate with you in finding a compromise where all parties will benefit.

Update other non-renting parties.

Make sure that you communicate with your co-investors, your lenders, and all individuals involved in the operation of your rental property. Let them know the steps you will be taking, new rules that you will implement, and lease adjustments you will negotiate with your tenants. Keeping everyone up to date will make the transition to the new normal go smoothly.

Reevaluate and adjust your financial strategies.

Your income projections and financial plan before the pandemic will no longer be realistic. Reassess your current financial situation and come up with more relevant approaches. With the uncertainty of how long the health crisis would last, you have to think long-term.

Anticipate vacancies.

Even if you show a willingness to find a compromise with your tenants, some of them would still pursue a different course of action that forces them to terminate their lease. Make sure vacated units are ready for new occupancy.

Prepare a draft of your listing which you can publish to Padleads so that you can quickly put the vacant unit back on the market in case an unexpected lease termination comes up. Syndicate that list to popular rental websites so that home hunters can easily find it.

There are a lot of things beyond our control like pandemics and economic crises, but what we have control of gives us the power to survive and thrive. If we learn to adapt to whatever life throws at us, we will continue to overcome.