Paying rent when you can’t afford it

As millions of workers have lost their jobs and others are forced into furlough amid the COVID-19 pandemic, many aren’t able to keep up with bills — including paying for the roof over their heads.

While several banks and lenders have announced mortgage deferral programs, renters have not seen similar payment forgiveness on a widespread scale.

Knowing you can’t pay rent — or having to decide between paying rent and, say, buying food — can be incredibly stressful. But it’s not a time to bury your head in the sand.

Talking to your landlord could help you get some financial relief.

In Nevada, Gov. Steve Sisolak signed an emergency order March 29 that temporarily freezes eviction and foreclosure proceedings involving residential or commercial real estate, with exceptions for people who pose a threat to others or to their property. It also bars late fees or penalties for nonpayment during the crisis.

Negotiating a deal with your landlord if you can’t pay rent

When you think you can’t pay rent for the upcoming month, it’s best to speak with your landlord sooner rather than later. You may be able to come to a resolution that doesn’t involve eviction or having delinquent payments on your credit report.

First, know your rights

Matt Koz, finance director for the Tenant Resource Center in Madison, Wis., recommends that renters do their due diligence to research the eviction laws in their area and see if their city, county or state has a moratorium on eviction proceedings during the pandemic.

Pro tip: The U.S. Department of Housing and Urban Development has a page on its website with crucial housing information for each state.

“There is also a federal moratorium on evictions, but that only applies to federally subsidized properties,” he said.

Koz notes that it isn’t always obvious for renters to determine whether the home they rent is federally subsidized, and landlords may not be obligated to share that information.

Being educated about the tenant laws in your state doesn’t just give peace of mind about whether or not your landlord can evict you during this crisis. It can also help you decide how to best proceed when reaching out to your landlord.

For example, Koz said there could be laws where you live that make it disadvantageous to pay partial rent, if you were thinking of suggesting that to your landlord.

“In some cases, it may be better not to offer terms and wait to see what recourse is available to you,” he said.

Approach your landlord with empathy

You may just think of your landlord as a faceless entity that takes the biggest single chunk of your money every month, but a little kindness can go a long way.

“Lead with empathy,” advises Michael Thomas, an accredited financial counselor and faculty member at the University of Georgia. “It’s very easy to become self-absorbed when we’re experiencing a financial shock.”

He says taking the time out to ask how your landlord is doing and working to establish a relationship can make your landlord more willing to work with you. Understanding where each person is coming from can lead to a resolution that’s best for both parties.

Provide realistic solutions

Offering up a solution to your situation can show your willingness to work with your landlord.

You might propose to make a partial payment with a promise to pay the remainder of the rent by a certain date. If you don’t know when you’d be able to make the remaining payment, Koz said it’s reasonable to make an agreement based upon a specific occurrence.

For example, you might ask your landlord if you can pay the remainder once you get your stimulus check or unemployment benefits or when your hours increase at work or your furlough ends.

Instead of suggesting a partial payment, you could ask for an overall reduction in rent or ask to skip paying for one month and spread that payment over the remainder of your lease.

Another option: Ask your landlord to apply your security deposit to the upcoming rent payment, agreeing to replace it at a later date. Or if you paid your last month’s rent upfront when you first signed your lease, you could ask your landlord to apply that money to next month’s rent.

Pro tip: When trying to come up with a rent solution for the upcoming month, make sure you’re not creating a worse financial situation for yourself later on.

Something else you might consider is bartering. For example, you could agree to do landscape work for your landlord’s properties in exchange for a break on rent.

When trying to strike a deal with your landlord, Thomas suggests coming up with at least three plausible solutions that work for your budget.

“Go with your best-case scenario first,” he said.

If your landlord won’t agree to that, ask for their input on mitigating the situation before presenting your other options.

Get agreements in writing

If you and your landlord are able to agree on an alternative plan for paying rent, make sure to get that deal in writing.

“If [your landlord] were to come back and say we didn’t agree to that, [you can say]: Actually we did and here’s proof,” said Pamela Capalad, a New York-based certified financial planner and founder of Brunch and Budget.

Putting things in writing also helps eliminate misinterpretations of your agreement, she said.

However, when signing a lease addendum or other paperwork, don’t rush into a contract with terms you don’t understand.

“If you’re not sure what you’re signing, you can always try to contact a tenants rights organization or an attorney,” Koz said. “Whatever you sign is something that you’re held to. If you don’t meet the terms of that agreement, you’re back where you started.”

Remember, you’re not alone

You may experience shame over not paying rent or fear over potentially losing your home, but try not to let that lead you to making drastic decisions.

“The thing I would recommend, if you can avoid it, is to not take out loans to pay rent,” Capalad said.

It can be comforting to put things in perspective and realize you’re not the only one who can’t pay your rent right now, she said. The National Multifamily Housing Council reported that nearly a third of apartment dwellers didn’t pay rent between April 1 and 5.

“[Landlords] understand that we’re all going through this,” Capalad said.

5 additional solutions if you can’t pay rent

In the event that your landlord won’t budge on requiring you to pay your rent in full, it’s good to have a backup plan. Here are a few ideas to help you come up with the cash for rent.

1. Seek housing assistance

Look into local housing assistance or eviction prevention programs for emergency funding to help keep you in your home.

The United Way’s 211 network is a great way to connect to resources in your community. Other charities, like Modest Needs, may also be able to help. Your landlord may even know of housing assistance options in your area.

2. Bring in a roommate

Despite the global crisis, people are still moving to new homes.

If you can find a good roommate, you can split housing expenses and lower your financial obligation. Just make sure you properly vet the potential roommate and your landlord approves of the new tenant.

Subleasing your place could be another route to take, provided your landlord allows it and you have somewhere else you can crash in the meantime.

3. Sell something

Make some extra dough by selling unwanted items around your home. Put that money toward the rent.

You can even make sales while practicing social distancing. Check out these five websites for selling things online — along with tips for selling while under quarantine.

4. Get another gig

Even while millions of workers are getting laid off, grocers and delivery companies are hiring en masse to meet public demand. Apply for one of these jobs to provide some cash flow if you’re unemployed or working fewer hours.

Looking for a way to make more money? You could work from home. We post new job opportunities every weekday.

Now is also a great time to find a job where you can work remotely. There are several gigs that are perfect for doing virtually, like freelance writing or competing in video game tournaments.

5. Borrow money from your retirement fund

Pulling money out of your 401(k) isn’t ideal, but if you’ve exhausted every other option, you might want to look into this.

The CARES Act waives early withdrawal penalties and spreads the income tax you’d owe on that withdrawal over three years. However, it’s important to keep in mind that pulling money out of your retirement accounts now could mean selling your investments at a loss.

Consider this as a last resort.

Feeling overwhelmed? Create a budget that works for you with our budgeting bootcamp!

Nicole Dow is a senior writer at The Penny Hoarder.

This was originally published on The Penny Hoarder, a personal finance website that empowers millions of readers nationwide to make smart decisions with their money through actionable and inspirational advice, and resources about how to make, save and manage money.