Managing Rental Properties in the Wake of a Global Pandemic
The COVID-19 pandemic is the black swan event that no one predicted. With more than 540,506 Coloradans claiming unemployment since March, it’s easy to see why so many property owners are concerned about long term impact this event could have on their real estate investments.
As property managers, investment advisors and personal owners of real estate, the team at Atlas has been keeping a keen eye on the housing legislation being proposed in response to the COVID-19 pandemic.
The evection moratorium set to expire on June 13, has been extended one month to July 13 via an executive order by Governor Polis. The order has increased the 10-day notice to a 30-day notice that is required before action can be taken to start the eviction process. The order also states that late fees are prohibited from May 1 – June 13 and cannot be charged retroactively. This means that if your lease includes them, daily late fees can resume on June 14 and monthly fees can proceed if July payments are missed.
This decision comes after a COVID-19 Relief Bill, that proposed extending the moratorium to October, was voted down in the Colorado senate. It’s important to note that nationally evictions are still banned until late July on properties that have federally backed mortgages. If you are unsure, a building’s status can be checked on the Fannie Mae and Freddie Mac websites.
The Atlas team currently manages more than 3,200 properties. Pre-COVID-19 our rent collections averaged 98.5 percent month over month. As of June 15, we’ve seen only a 4.1 decrease, bringing our average down to 94.4 percent and the month is not over yet. We are anticipating rents collected to be above 96 percent. This decrease was much better than we imagined. We suspect that this may have been artificially inflated by support from the federal government and are anticipating a decrease in the collection rates from June and July.
At Atlas, we always encourage property owners to first work with their tenants by offering payment plans. Eviction can be a long and costly
process. It is in your best interest to protect against vacancy, which can be one of the biggest threats to property owners. To proactively protect our clients, against the adverse financial implications of COVID19, Atlas created a new position, the Resident Resource Manager. This position was added to help residents arrange such payment plans, walk individuals through filing for unemployment and help connect people with the array of local nonprofit resources that are locally available.