Economy

Small Landlords Face Cash Crunch As A Third Of US Renters Don’t Pay

Almost a third of renters in single-family or small multifamily properties couldn't make their August rent, according to CNBC, citing a survey by Avail, a tech and marketing platform for small landlords.

The main reasons, the survey showed, were the same as they have been for months: the pandemic has left them without jobs or with reduced income. Missed rent payments have soared, rising 93 percent between March and May of this year as the pandemic wiped out jobs and kept people in their houses, often not earning even close to what they had been.

Last month, the number was 25 percent who couldn't make payments, so this is an increase in missed payments, according to CNBC.

There were 2,225 landlords who responded to Avail's survey and almost 3,000 renters, CNBC reported.

Avail CEO Ryan Coon said 42 percent of renters and 35 percent of landlords had to dip into emergency funds and savings to cover everyday expenses, CNBC reported. And close to half of small landlords, he said, had offered to defer or forgive rent entirely.

The pandemic's economic effects have hit both sides of the equation. Renters have been struggling to stay afloat, especially after the expiration of the extra $600 a week unemployment benefits, and landlords often rely on rent for the bulk of their income, with 23 million units in 17 million properties owned by individual investors, CNBC reported.

Around 54 percent of income from a usual rental unit goes toward fixed costs for property maintenance or other associated fees, CNBC reported, citing Zillow.

Some landlords, CNBC noted, have taken advantage of the government's mortgage forgiveness program, which lets borrowers with government-backed mortgages defer payments for three months to a year.

David Sullivan, founder of FinTech Till, speaking with PYMNTS, advocated for more flexible rents, in which renters and landlords work on platforms like Till in order to reach custom payment plans.

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