Are you worried that your tenant may not be able to pay the rent?
Are you can are you concerned about the legislation that will prevent you evicting tenants? What if they don't pay rent for 6 months and then leave?
These are the common concerns I'm hearing from many of the investors whose properties we manage at Metropole.
As property investors ourselves we understand the stress and uncertainty that surround us all at this time, and that many of our landlords have concerns over loss of rental income.
As so much is still unknown in regards to assistance from the Government for both Landlords and Tenants, our advice to them at present is to show compassion albeit but without commitment.
Right now, we want to ensure that tenants don’t give notice to vacate or break lease due to a temporary loss of employment, reduced hours or simple out of fear.
Vacancy is something we work hard to avoid at the best of times, let alone in these uncertain times.
What we do know, is that evicting good tenants, for non-payment of rent, is not going to help anybody and this is the very message that we sharing with tenants – we really are all in this together.
We await announcements due to be made by the Prime Minister, Scott Morrison, in relation to rental relief packages for financial hardship cases.
Once these announcements have been made, we will then have a clearer understanding of what can be offered to tenants and in turn what landlords should offer in terms of rental payment plans.
In the meantime the Property Investors Council of Australia (PICA) – Australia’s peak body representing property investors – has responded to tenant unions and politicians requesting rental relief and end of evictions for renters.
Ben Kingsley, chairman of PICA, said property owners understand the hardships their tenants face, but has called on Government, APRA and financial institutions to step up and be part of the solution.
“Let’s be clear – landlords understand the situation. The vast majority are decent, hard-working, average Australians who own just one rental property.
“They want do whatever they can to assist the community, but the fact is most can’t afford to bear the cost of having reduced or no rental income while still needing to cover mortgage repayments, tax commitments and repairs and maintenance.”
“Put another way, landlords themselves are everyday Australian’s who are also feeling the hit with job losses and reduced income like everyone else.”
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He said any moves to assist tenants have to come with support for landlords as well.
“State governments have been asked to establish programs to assist struggling tenants. As the peak body representing landlords, we’d welcome the opportunity to be part of those discussions.”
He said there are a range of ways to ease the burden on landlords so they can be part of the solution for tenants suffering hardship.
PICA’s has put forwarded a range of suggested implementations including:
- APRA’s relaxation of lending guidelines allowing investors to refinance more easily at better loan conditions,
- Bringing investors interest rates and financial charges to be in line with those offered to home owners,
- Banks passing on rate cuts in full,
- Easing restrictions so investors can move easily to Interest Only loans,
- Providing an interest-free loan repayment ‘holiday’ period,
- Ensuring Interest Only and P&I mortgages have the same interest rate applied,
- Tax depreciation breaks to help offset the burden such as allowing investors to claim the actual remaining depreciation on the remaining life of the asset
“All we are asking is for is some sensible help so we can afford to accommodate rental loses from unfortunate tenants.
“Property investors have already been subject to challenges in terms of securing finance and lose of their ownership rights through changes to state-based legislation. They simply aren’t in a position to be asked, yet again, to carry the load unassisted.
“Recent accusations that landlords are unsympathetic and unwilling to fulfil our roles in providing safe housing at reasonable market rents have been both hurtful and divisive.
“Ironically, the same groups who’ve been advocating for the erosion of property owner’s rights and are now looking for our assistance.
“Perhaps the silver lining of this current event is a greater realisation across the board that tenants and landlords must treat each other with mutual respects and help each other through tough times."
Now is the time to take action and set yourself for the opportunities that will present themselves as the market moves on
If you're wondering what will happen to property in 2020–2021 you are not alone.
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