Home Commercial Multi-Family Apartment rent payments fall 24% to close out 2020

Apartment rent payments fall 24% to close out 2020

Connectivity could be key in increasing collection figures as more tenants are paying their rent online.

Multi-family unit rent payments continued their decline in December due to the COVID-19 pandemic, GlobeSt.com reports. Rent collections fell 24% from March, according to research and rent collection data analytics firm Rentec Direct. While rent payments have trended down since March, there have been signs of improvement since September 2020. Rent collections that month were a record 35% below March, but steadily improved in October (down 28%) and November (27%).

There’s no indication of which way rent collection figures will go as the calendar turns to 2021, however. Rents being down 24% 10 days into December shows there is at least some payment activity going on. Unfortunately, COVID-19 cases have increased across the United States, which could impact tenants’ ability to make their rent payments going forward.

The National Multifamily Housing Council (NMHC) meanwhile saw rent payments decreased 8% during the early part of December versus the prior month, GlobeSt.com reports. Payment data was collected from 11.4 million professionally managed, market-rate units across the U.S., according to Multi-Housing News.

The NMHC also noted that renters made approximately 75% of their rent payments, which falls in line with Rentec Direct’s data. While the NMCH data found the decrease somewhat troubling, it should also be noted that December’s first six days can’t be considered an indicator to how the rest of the month’s rent collection numbers will turn out.

“While the initial rent collection figures for the first week of December are concerning, only a full month’s results will paint a complete picture,” NMHC President Doug Bibby said in a statement. “The report noted that December 5 and 6 fell on a weekend in 2020 and may not be a direct comparison to last year’s figures. However, it should not come as a surprise that a rising number of households are struggling to make ends meet.”

Could connectivity help improve multi-family rent collections?

Residential tenants might be having trouble paying their rent, but when they do, a lot are doing so online. Rentec Direct’s report showed that online rent payments increased by 8% in December. The increase could be due to landlords’ peaking interest in online rent payment tools. It turns out that the more online payment options tenants have, the easier it is for landlords to collect rent. There were 1.8% more online rent payments in November compared to March. Meanwhile, more than 4% of rent payments were made online in October and online payment activity has increased steadily since September, GlobeSt.com reports.

If online rent payments continue to increase, Internet connections in multi-family buildings will become even more important. It’s tough for a lot of people to pay their rent during the pandemic—if there’s a way to make it easier for the people who can pay, it makes sense for landlords to ensure that happens. A reliable in-building wireless network will not only serve as an incentive to tenants to pay their rent online, but also help them perform their job duties, look for work or take part in virtual job interviews. Let’s not forget the need for their kids to be doing their schoolwork online too. Connectivity helps everyone.

Joe Dyton can be reached at joed@fifthgenmedia.com.

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