Tips for Landlords in a Recession

Tips for Landlords in a Recession


A recession can throw the relationships between landlords and tenants into flux. As incomes are squeezed and the job market suffers, tenants may find themselves struggling to pay rent, and landlords may find it harder to let property, resulting in declining rent prices.

As a landlord, how do you insulate yourself from the hardships of a recession while maintaining your income and preventing spats with tenants? The reality is that most landlords will have to make some sacrifices. But if you make wise choices, those sacrifices may be small and relatively inconsequential to your income in the long term.

Follow these tips for landlords to protect yourself and your business during a recession.

Keep Your Tenants

Your tenants may fall on difficult times, but keeping them is almost always more profitable than trying to replace them. Evicting tenants may leave you with empty rentals for months at a time, earning you zero income. If you agree to allow delayed payments for struggling tenants, you will likely be able to collect their full rent at a later date.

Even offering lower rent prices (temporarily) or a month of rent forgiveness may keep tenants from moving out. Remember that your tenants are your source of income. Work with them and make compromises, and everyone will be better off.

Get Rent Insurance

Rent insurance covers you for unpaid rent cheques, which means if tenants can’t pay, you still get your money. This can save your business and lifestyle during a recession.

However, rent insurance is notoriously difficult to get approved for in a recession. Luckily, the looming recession hasn’t officially started yet, so smart landlords are doing their best to lock in a decent rate. Apply for rent insurance now to improve your chances of eligibility.

Know Your Rights—And Your Tenants’ Rights

Relationships between tenants and landlords can become heated in a recession. But it’s important to remember that no matter how you may feel about your tenant, you have legal obligations to them. Even if your tenant refuses to pay rent or damages the property, you must continue to maintain safety standards and give your tenants the privacy they are entitled to.

Any problems caused by the tenant can be resolved by the courts or the local council. If you fail to perform your legal duties as a landlord, the tenant will be eligible to apply for a rent repayment order, requiring you to repay them up to 12 months’ rent. It’s important to understand all of your responsibilities as a landlord as well as your tenants’ rights before you take any action.

Help Tenants Seek Financial Support

Your tenants may not know that they are eligible for financial support during an economic downturn or in the case of lost employment. Is it your job to assist them? No. But it is certainly in your best interest to help them apply.

Financial aid for your tenant means rent payments for you. Without aid, tenants who would prefer to stay and continue paying rent may be forced to move out. Others may stay but stop paying rent altogether.

There’s also a human side to providing assistance to families. As a landlord, part of your job is to ensure the well-being of your tenants. Ensuring they have the resources to keep a home and feed their children certainly falls under that purview.

Reconsider Your Tenant Profile

Some of your tenants will likely move out due to economic hardship. Instead of lowering rent or letting your property sit empty, you may need to consider a different occupant profile than you normally would.

For example, you may want to convert a single-family home into an HMO property. This may attract younger people who can afford to let a room in a shared rental. You may also want to allow tenants with pets. Pet-friendly properties are rented more quickly, and tenants tend to stay longer, affording you more security in a recession.

Recessions Bring Change, Not Always Hardship

Maintaining your business during a recession will depend heavily on your ability to adapt to change. As a landlord, being strict in times of turmoil is not realistic. Do what you can to maintain an income, even if a partial one, and take this opportunity to audit your business and personal costs to save money. As a result, you may find yourself in a better position when the economic skies clear.