For many mom-and-pop rental owners, federal and state eviction moratoriums have taken a staggering toll. The National Low Income Housing Coalition said that by the end of December 2020, renters owed landlords $30-$70 billion in back rent, and this number has certainly increased in 2021 Q1. According to the Census Bureau, close to 20 percent of adult renters didn’t pay rent in February. Renters are, on average, four months behind in rent with a balance of $5,600, and as back rent increases, it’s likely most renters will never be able to pay the rental payment debt they’ve incurred and continue to incur.

Since small independent property owners own more than half of the nation’s rental units, this is a large group at high financial risk. With less money coming in than expected, many landlords are spending more money than they are making in rental income, draining savings or buffer funds they once had. The moratorium extensions, on the federal level if not the state, are bringing many landlords to their breaking points. Looking forward, the prospect of collecting back rent seems dismal. The debt load many renters are under will take a long time to pay off-if they ever do. Without current and projected rental incomes, what’s the risk for landlords?


If landlords don’t receive enough rental income to pay a mortgage, foreclosure is a devastating possibility. For every rental dollar paid, thirty-eight cents on average go toward a mortgage payment. The more dollars in unpaid rent, the less money there is for landlords to make the mortgage payment. Foreclosure is a worst case scenario for everyone involved, not just the landlord; the landlord loses the rental unit, the tenant loses a residence, and the lender loses an investment

Property taxes

If landlords can’t pay property taxes, again, they could lose their property. Since property tax money goes to the local governing bodies, these governing bodies could put a lien on the unit to collect money owed. Additionally, without this money, there’s less funding for public services. Property taxes generally supply money for services like fire departments, water, sewer, roads, police departments, and the like. Underfunded fire departments can put residents at risk, for obvious reasons.

Maintenance tasks

Without enough rental income, there likely won’t be enough money for routine maintenance projects. When money is tight, most people prioritize the most important purchase items. For landlords, this is the mortgage and property taxes, since they could lose their properties if they don’t pay these bills. As a result, less-than-critical maintenance tasks may have to wait. Even critical maintenance items may be temporarily patched up or simply delayed due to lack of funds.

Capital improvement projects

Capital improvement projects go beyond typical maintenance, but they can still be essential items that need attention-and they can be very costly. If there are large issues resulting in replacing an entire HVAC system or large plumbing areas or extensive electrical work, these capital improvement projects would need immediate attention and funding. For landlords who have no resources to fall back on if one of these projects comes up unexpectedly, it will be a very difficult road.

The application process to find a qualified tenant is now more important than ever! Ask Golden Real Estate how they screen tenant applicants and why their process works to mitigate your future risk!

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