A message from our CEO, Manoj Varsani
Hammock is made by landlords for landlords. During these difficult times of the Covid19 emergency, as a landlord, our CEO Manoj has thought of ways to help and support his tenants.
We share his 4-step process below, with the email he’s sent to the Hammock community.
It saddens me to write this email during these turbulent times. Coronavirus is impacting everyone massively and some more than others.
Everyday we hear that employees are being made redundant. And the self-employed and contractors on zero hours will experience reduced work commitments in the near future.
Tenants affected by this loss of income will suffer additional stress. They’ll worry about paying rent or, even worse, they’ll feel forced to turn up to work when they shouldn’t. They’ll take risks they shouldn’t have to.
As a landlord I feel I have the responsibility of care for my tenants, so I came up with a 4-step contingency plan to help protect the tenants as well as my assets.
First I thought, how can I help tenants? To help tenants in the best way I can, I needed to understand my options. So here is what I did.
1. Mortgage payments.
If a tenant can’t work, chances are they can’t pay the rent. So I contacted my buy-to-let mortgage providers and asked them how they could support me if a tenant had issues paying their rent. Foundation Home Loans said they are willing to support, but they will be working on a case by case basis. To me, it feels like lenders understand the scenario and are willing to help. If you can freeze your mortgage payments, this will relieve the burden of rent payments for tenants. Rishi Sunak, the Chancellor of the Exchequer, announced on March 16th that mortgage holidays will be available for 3 months. This is great for home owners but it doesn’t allow landlords to help their tenants. I am hoping the government will extend this to the rent market. I had positive conversations with my mortgage providers before Sunak’s announcement, therefore I’m convinced that buy-to-let providers want to support renters too.
Find out how your buy-to-let lenders are willing to support you and your tenants. If you don’t ask you don’t get, so jump on the phone and ask.
2. Building and Maintenance.
I contacted my plumber to make sure he was okay. I was very happy to hear that he is in good health and so is his family. He also told me that if a boiler broke in one of my properties, he would still go out to repair it. “We can’t have people living in a cold house”, he said. This blew me away.
We have to appreciate builders and maintenance workers now more than ever. They don’t have options to work from home.
Drop your maintenance people a small message to make sure they are okay. Be prepared to find suitable substitutes for emergency repairs, should your usual contacts be unwell.
3. Financial plan.
I updated my financial plan to see what I can afford to cover for my tenants. In all scenarios, I would always contact the lender to freeze payments. However, you need a contingency plan to cover rent where mortgage freezes and rental insurances are not in place. If you log-in to Hammock, you’ll find your profit and loss per property, and which properties have a surplus. This will help you calculate your runway and assess your risk. If you are a spreadsheet geek like me, you can also download the data in CSV.
Get a clear view on the current profit and loss of your properties and manage the risk of loss of income from rent.
4. Your tenants.
After completing the first three steps, I was ready and prepared to contact my tenants and share the good news with them. I let them know that they don’t have to worry about any emergency repair being delayed. I then encouraged them to discuss with me any potential issues with upcoming payments. Checking in on my tenants was the right thing to do. For one of properties I had to go through my estate agent but it was still worth it. I now only hope the tenants won’t hesitate to reach out for help when needed.
Action four, the most important action
Now that you are clear on your financial situation, financial options and emergency repair support, you should contact your tenants and let them know you have their back.
Let them know you have contingencies in place should the worst happen. Let them feel comfortable so that they do contact you when things are hard and support them where you can. I can’t think of anything worse than worrying about being evicted from your home during this terrible time.
Also offer to help in other ways, if your tenant is elderly or vulnerable, is there anything you can do?
How to help your tenants in 4 steps and beyond
Coronavirus is not going away anytime soon. Everyone will be impacted at some point. I can only hope the impact will not be the loss of a friend or family member but something less important, like a financial loss. Money, e-commerce and tangible goods are important, what is even more important is humanity and being there for each other. I strongly believe tenants are and soon will be even more vulnerable once this pandemic reaches its peak. The loss of income, the fear of losing one’s house and the mental stress that comes with it, is unimaginable. I am just grateful for my tenants, family, friends, customers and employees are not impacted just yet.
I hope none of you, our landlords and estate agents, are impacted by coronavirus and are also in good health.
What I urge landlords to do is to think of ways of how you can help people. To kick this off and to make it easier for you to help, I will be dedicating some time to do more charity work. If you would like to help and don’t know how to, please contact me at firstname.lastname@example.org. I will be happy to put you in touch with a good reputable charity which is local to you or to your properties.
I am planning on my next steps to support my tenants. My next action will be collating advice numbers to call for support dealing with mental stress or financial difficulty. I will also share with them the process for claiming statutory sick pay. And I will highlight how they can help the community.
If you have any questions or concerns please contact me. I will share my next steps with you soon. I would love to hear about the steps you are taking to support your tenants and your community: we could all do with more good news these days!