You may have received a letter from real estate property manager informing you of the change. of the outbreak in your home in one way or another if you are an Australian investor —— I am sure you are also very concerned about how the outbreak affects your tenants and your investment house
How, then, should you, as a real estate investor, respond to changes that may come or have already taken place? On the basis of the first-line experience of the property management team of Ironfish Asia Pacific Group, we are here to summarize for you a Q&A, of the common situation of rental housing during the epidemic period.
Q1: tenant conveyed to me through the property manager, told me that I encountered economic difficulties, hope I reduce rent, how should I answer?
As a result of the recent outbreak, Australia has also closed many service businesses, resulting in reduced working hours in some service industries or the unfortunate loss of jobs, resulting in temporary difficulties in paying rent.
For this situation, you can ask the tenant to issue a certificate of their economic distress through the property manager, such as the letter of dismissal by the company and so on, and see the supporting documents to make a decision.
For tenants economic do have difficulties, we suggest that you can consult with your property manager to see if you can negotiate with tenants for a temporary rent discount, such as 20% rent reduction, for a period of 3 months, and 3 months later to decide as appropriate.
The good news is that on March 30, government announced a new $130 billion $" retention grant (jobkeeper) payment), the scheme will be funded by the government to subsidize employees for the enterprise salary, with a maximum subsidy of $1,500 per employee per two weeks before tax, as well as for employees with reduced or no pay to remain in their jobs. This grant is paid to the employer to offset the employee's salary or to be added to the original salary, depending on the company's choice. The subsidy took effect on 30 March for a period of six months. That is, in the next six months, although employees are still theoretically employed by current employers, a large part or even all of their salary will be subsidized by government.
This policy will significantly reduce the pressure on companies to pay their employees' salaries, help more people to keep their jobs in special periods, and ensure that they have the money to pay their rent.
On the other hand, you may feel that reducing the rent for a tenant will cost a lot of rent, which we fully understand, but in the long run, retaining a current tenant may be a more cost-effective option. If the tenant moves out now, you need to pay for the tenant and advertising fees again, plus because the current government is not open to see the room, can only make a separate appointment, which may extend the time to find the next tenant, and also extend the vacancy period.
The most important thing about real estate investment is always long-term possession, so long as you can hold real estate, the immediate temporary problems can be solved flexibly first.
Q2: my tenant is now in arrears, what should I do? The federal government announced a six-month moratorium on eviction at the end of March, but also stated that the policy did not exempt tenants from rent rights .government encouraging landlords and tenants to negotiate a settlement, and expected to issue more details, when we will update this article accordingly. At the same time, if this situation causes your loan repayment difficulties, there will be corresponding suggestions below. Q3: tenant just moved out, now this situation, can my house rent out? Sure. The epidemic does have a certain impact on the rental market. But people's lives are always going on, and housing will always be rigid demand. For investors, the primary objective could be to focus first on "earning rental income ", which could be reduced slightly on a temporary basis. At present, there are still a lot of tenants looking for a house in the rental market, mainly because some people's salary are temporarily affected, which in turn affects their ability to bear the rent, and if the price is within their affordability, they will still accept it. In a special period, investors can first sign a six-month contract, and then six months later, depending on the market conditions, reasonably raise the rent. For more details, please pay attention to our website blog, more about the lease of the government new deal, we will provide you with updates and interpretation as soon as possible. You can also click the button below to subscribe to our mail. https://cn.ironfish.com.au/blog-news/what-should-i-do-as-a-landlord-during-the-covid-19-pandemic/