Cancel rent… It’s probably a new term but you’re probably familiar with the term “cancel culture”, which means people that want to censor certain beliefs that they may not share or simply avoid talking about things they don’t agree with. But what is the term “cancel rent”? Does it simply mean that tenants can live free?
This is a new issue that a lot of Panama City Beach real estate investors are having to deal with right now. The idea behind the cancel rent program is for tenants that are struggling financially because of the COVID pandemic and while nobody should live rent-free necessarily forever, there is a chance that we might get some relief but is there any relief for the landlords? A landlord shouldn’t have to shoulder the burden of tenants that can’t pay their rent.
Landlords are and investors are not to blame for hardships but telling that to folks that are renting or tenants, could fall on deaf ears as many feel that anyone that could be higher up the food chain and they are shouldn’t deserve any breaks.
However, a recent measure passed in Ithaca canceling rent payments to landlords even if they are not sure they have the authority to do so. Some city councils are trying to pass the rent cancellation measure as a threat to landlords. It’s basically saying you can either cancel the rent or you can come to the table and talk about options.
Unfortunately, there are a lot of landlords that couldn’t care less about where their renter is going to get the money, they just need to pay. This proposal is designed to at least get landlords and tenants talking and coming up with a reasonable solution that’s a win-win for both.
Under certain eviction moratoriums, landlords in certain circumstances can’t evict, this is a general consensus across the board even pre-pandemic times. But eventually, the rent will come due after the moratorium is up. However, it’s really up to the landlords to collect and if the renters are financially strapped, they may not be able to come up with a huge lump sum of back rent. Cancel rent groups want even more options for landlords such as all back rent erased. They’re essentially asking landlords to pay for someone else’s housing.
So how can cancel rent work?
If it becomes a thing, somebody still needs to pay for the housing. If it’s the landlord, the policy would not only be unfair but a bit shortsighted. There’s no way for a landlord to make any money and basically would be losing money on a consistent basis. Landlords are not just doing this business because they think it’s fun. Landlords need to make a living to and have many expenses to owning a home such as a mortgage, property taxes, maintenance, and insurance just to name a few. Not being able to evict a tenant may be bad enough but not allowing to even collect rent could be the last straw.
While it’s a seller’s market in most of the country, landlords will eventually just start selling if they cannot collect rent and there goes a lot of the housing options for tenants. If you’re planning on investing in Panama City Beach condos or real estate or you currently are a landlord, it’s important to keep up with what’s going on in your local market. If there’s an active tenants rights organization it’s important to be a part of that or have an active landlord Association so that both parties can come to the table and offer legitimate solutions for both the landlord and the renter.
“As with a lot of businesses during the pandemic era, in order to succeed, you must pivot. Investment property might be a great way to make money but if government actions encroach on your private business and don’t allow you to make a living from it, it may be time to sell.” – John Kinnunen, Join eXp Realty
Now is actually a great time to sell throughout the PC Beach market. It’s definitely a seller’s market and prices are increasing rapidly. If you’re looking to sell or just nervous about the cancel rent issue that may become a problem in the future, contact our office at any time. With your investing, buying your first home, or selling an investment property or any home, contact our office today.
For more information on Panama City Beach real estate, contact my office at any time.
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