May Day apartment rent payments are promising, according to early rent collections data from LeaseLock. First-day rent payments in May increased slightly compared to first-day payments in April. More than 15% of renters paid in full on the first in both April and May, according to the report. The trend shows that renters that can afford to pay rent are prioritizing the payment.
“The people that pay on the first of the month are very reliable,” Derek Merrill, CEO and co-founder of LeaseLock, tells GlobeSt.com. “Those people are still paying their rent, and there was even a slight uptick in people that are paying on the first. That could be attributable to a number of things, but as long as people have the money, it looks like they are prioritizing paying rent. That is a really good thing because the big worry is first if they have they money, and second, if they do have the money, how they are prioritizing their housing expense.”
Despite strong first-day payments, total rent collections are expected to fall in May compared to April. “We are seeing a slight dip, even deeper than April’s decline, in the second- and third-day payments. We are still sizing up the magnitude of that,” says Merrill. However, the drop won’t be as dramatic as expected. In April, there was a 7% decline in total rent collected, and May will likely see an increase of a few percentage points. “The drop off between April and May is looking like it will be a drop off of a few percentage points,” Rochelle Bailis, VP of marketing at LeaseLock, tells GlobeSt.com. “It would be unlikely to see a big drop off at this point. Interestingly, we are seeing that class-A and class-B are both doing well. A lot of the drop off we are seeing is in the class-B space, but the difference is pretty marginal.”
For the optimists, May is not likely to have the world-ending, cliff-dive that was expected by many apartment owners and forecasters. “The decline in total rent collected [in April] wasn’t substantial considering the magnitude of what has happened,” says Merrill. “Then, everyone was expecting for May to drop off a cliff. Early data indicates a decline, but it isn’t a drop-off-the-cliff decline. That is the big reveal.” Of course, there is always June.
Although, if April rent patterns are any indication, there could be a fairytale ending waiting at the end May. April rent collections surged at the end of the month as renters received unemployment and other federal assistance. Those funds are continuing to make their way into renters’ pockets in May. “As we saw unemployment checks coming through and federal relief checks coming through at the end of the month, people made rent payments,” says Bailis. The grace period for May collections ends today, and more data will be available to reveal the full scope of rent collections for the month.
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