Sam Collins • Jul 07, 2020

The COVID pandemic since March of this year reminds me of a saying from my Grams. She said something along the lines, “If you live long enough, you will see just about everything.” Grams was right, but then again she was almost always right. My Grams, Rosa Lee Smith, was also a real estate investor and did not get started until she was in her 50’s. Then came my Mother who was not only an investor but also managed her rentals. Now, I get to make the claim that I am a third-generation real estate investor. That information plus a $5 bill might get you a coffee at Starbucks.

Now back to the blog…

In my email inbox, I get a lot of industry videos and news, and I have been watching and reading about this movement calling for “Rent Forgiveness.” I understand this pandemic has caused turmoil and havoc on tenants and landlords alike, but most landlords cannot afford forgiveness even though they understand and sympathize with situations that their tenants find themselves in. Most real estate investors had to borrow money to purchase the investment from a bank or other financial lender. Banks make money by making loans and collecting their money back with interest on a monthly basis, and if you don’t pay your loan payments then the bank forecloses and the investor and the tenant are out. Tenant can’t pay the rent, the investor can’t pay the bank...you get the picture.

Why pick on rental real estate investors? Why not grocery forgiveness or car loan forgiveness? In fact, why don’t the banks just forgive all the loans in their portfolio and grocery stores give their groceries away for free and all the retailers just have a come in and get what you want and not pay attitude? You get the folly to this scenario, right?

Since March, the eviction courts have not served evictions to tenants due to COVID. Most tenants paid their rent or made arrangements with their landlord, but a small group of tenants took this “NO PAY = NO EVICTION” and milked it, and as of this blog post some still are. When the evictions start flowing again, many will pick up and move on to another unsuspecting landlord and start over. The previous landlord is then stuck with several months of unpaid rent. This cost is often passed on to the other tenants which is another blog post.

Until next time...