Landlords have seen a significant drop in payments as the COVID pandemic has shuttered businesses and caused record-breaking unemployment over the past two months, a property management technology company has reported.
According to Rentec Direct's recently issued report, landlords received a 19% drop in rent payments between early March and early May. The report, however, also noted that landlords might have more success receiving on-time rent payments if they allow tenants to pay their rent online.
"As COVID-19 continues to impact markets across the globe, many are left wondering what the future will hold in the rental industry," Rentec Direct President Nathan Miller said in prepared remarks. "It's safe to assume landlords are directly feeling the effects of this global shift. We are on a mission to determine how COVID-19 has impacted rental payment behavior by comparing the first week of each month to the same period in March, when most state shutdown orders occurred."
Although the report notes a nearly 20% drop in rent collections from March to May, there was only a slight dip in collections between April and May. According to the report, rent payments dropped 17% from March to April, and then only two percent from early April to early May.
The report also noted that landlords are seeing a slight boost in timely rents from those who have the option of filing rent online. Online rent payments are 1.5% higher than the online payments that were filed in April, the report said. According to the report, the trend makes clear that "online rent payment options increase likelihood of paying rent."
As a result, landlords' interest in allowing for online payments has seen a big jump as well, the report said. According to the report, on average 124 property managers submit applications to turn on online payments each month. However, in April, the number of those applications increased 15% compared to the months before the pandemic, the report said.
The report was based on a the study that was performed using aggregated and anonymous data from Rentec Direct's property management software platform, which represents 620,000 rental properties across the country.
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Max Mitchell
Max Mitchell is ALM's Regional Managing Editor for The Legal Intelligencer, New Jersey Law Journal, Delaware Business Court Insider and Delaware Law Weekly. Follow him on Twitter @MMitchellTLI. His email is [email protected].
