Addressing the financial difficulties for tenants and homeowners that have been brought on by the pandemic will be a slow burner as much as a balance.
Although many tenants are faced with the reality of having to maintain rental payments at a time when their incomes have been restricted and, in some cases, cut, some landlords are also faced with the prospect of losing the flow of income on which they relied. on to keep their investment home loan repayments covered.
When the federal government announces that details of how tenants and owners of residential properties will be supported during these uncertain times will be in the hands of each state government and territory, REIA President Adrian Kelly expressed concern about the inconsistency of the approach.
"We are now faced with the potential situation where Australians will be treated differently depending on where they live," Kelly said in a speech to the media – also sharing that residential rentals are subject to "social and economic impact" .
Extension of the available support
Saskia Wrobluskie, CEO of Advantas Property, says that for a landlord, entering into a short-term tenant agreement provides a stable foundation for long-term results.
"Most states have already released some form of rent relief for any reduced rent that has been negotiated and most states will not allow agents / landlords to charge break charges lease, "said Wrobluskie.
"In some states, tenants are able to end a fixed term without penalty, from this point of view, it is best to negotiate temporary rent relief with tenants who are severely affected."
For example, New South Wales was among the first to unveil a set of rental reliefs intended to assist both tenants and landlords: as part of a main set of $ 440 million, property tax exemptions and rental discounts will be extracted.
The owners may request a 25% discount on the property tax on the basis that the same reduction in rent is granted to their tenants. However, if the change in income of a tenant following the pandemic requires a further reduction in their rents, it is advisable for both parties to open a discussion to reach an acceptable rate during this period.
This approach met with great disappointment, because the burden falls largely on the owner to manage the financial loss.
On the other side of the country in WA, $ 30 million in rent assistance will be distributed to tenants whose incomes have been disrupted by the virus, eligible people being able to be alleviated up to at $ 2,000 in rent. This will be provided in addition to a reduction in rent as agreed by the owner and the tenant. A similar rental package is available in Queensland for those who have lost 75% or more of their income due to COVID-19.
The evolution of the situation in the short and medium term remains largely uncertain, because of compromised income could potentially see an increase in the number of tenants who would not be able to pay their leases in the coming months.
However, Wrobluskie shares some of the ways in which a landlord can actually engage in conversation with their tenant, as well as the avenues from which they can tap to ensure that their investment continues to operate under current market conditions.
She encourages owners to always approach their investment property as a business and says that teaming up with the right agent can "reduce their risk and make the business profitable."
Virtual strategies – such as 3D tours, videoconferences and electronic contracts – are offered to owners to pave the way for the future of real estate.
During this time, it is ideal that you can conclude an agreement with an existing tenant to allow him to stay on the property during the crisis.
When she has to go through a delicate situation with a tenant, she advises the owners to get involved by "listening to, validating the information, assessing the risk and negotiating a mutually beneficial result".
"Even though we were extremely fortunate to have only a small portion of the tenants and clients financially affected by COVID-19, we still encourage all of our clients to develop a crisis response plan "says Wrobluskie.
"This includes calculating the numbers, talking to banks and insurers, and putting in place a solid plan so that they don't get caught off guard if things go wrong. "
Conduct inspections in the midst of restrictions
In the case of owners who manage their rental properties themselves, Wrobluskie recommends the use of a video call instead of a physical inspection. Photographs are also effective.
"We have adapted our technology to include the ability for tenants to access a link where they can upload their inspection photos," she shares, also noting how the tenants were satisfied with the new process and showed "pride in the presentation of the property and the photos they produce".
While Some Landlords May Question Their Tenant's Ability to Conceal Damage This Way, Wrobluskie Points Out How Having a Low Level of Trust in a Tenant Might Indicate a Deeper Concern That Should Be Addressed .
When she chooses a property management agency, she says, "It is definitely best to go with someone who is experienced, a solid communicator and well-equipped in technology in order to ensuring business continuity in times like this. "
"A good agent is one who understands that he is part of his client's investment strategy and what it really means to maximize asset potential, even in difficult times," adds Wrobluskie .
