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The Australian economy has been stopped in its tracks due to the Coronavirus lockdown.
Personally I’ve been fortunate that I am still employed (for the moment) and have a paycheque coming in.
But as you guys know, the majority of our net wealth is in residential real estate, so I’ve been mentally preparing myself for the increasing likelihood that one, some, or God forbid, ALL of my tenants will seek some form of rent relief.
And lo and behold, it happened today:
Hello The Frugal Samurai,
The drastic measures that the government has put into place right across Australia to ensure a flattening of the curve, has seen many of our tenants facing job loss and financial hardship.
At this time, your tenant has contacted our office to request help with their rental payments as they have suffered a significant reduction in their income. As they have lost their job they are hoping that you would be in a position to assist with their rent.
As you may have heard in the media, the government has introduced a 3-month moratorium on evictions to those affected by the COVID 19 outbreak. What this means for landlords, is that a tenant can be behind in their rent significantly due to their COVID 19 hardship and they can not be evicted…
…At this time, we are in a position to negotiate for you, and you, as the landlord, have a number of choices. I have added as much information below as I am professionally able to and I invite you to look into what works best for you.
I have already asked the tenant to provide proof of the position they are in, ie: separation certificate, stand down email etc. At times, this may have taken a small amount of time to get together….
…Current rent: $720 fortnightly.
Rental reduction requested: 25%
Period of time asked for: 6 months or the end of covid…
DUM DUM DUM “cue dramatic music”.
To be honest though, I get these are unique circumstances, and will try to find a win-win for everyone.
Though it did make me wonder on the state of the rental landscape in Australia right now.
In a word… rough.
Here’s a survey conducted by rent.com.au:
- 59% of renters have either stopped working or had their working hours reduced
- 22% say their ability to pay rent has been severely affected
- 66% don’t feel confident seeking support from their property manager or landlord
- 35% of tenants have requested a rent reduction or deferral
- A large number of those tenants planning to move in the next 6 months have put their plans on hold
Renters are stressed
Well, these stats aren’t overly surprising.
The shutdowns in the economy has been ab-so-loot-ly devastating for many businesses, but particularly evident in the hospitality, tourism and retail sectors.
You’d expect these industries to employ younger, more transient staff, whom make up the largest cohort of the renting community.
It helps to an extent that the federal and state governments have moved quickly to support tenants, but the message seems to be constantly evolving.
I’ve been trying to keep abreast of all the different initiatives rolled out, given our properties are based in 4 different states – bloody confusing to say the least.
Hopefully the lockdowns can continue to be eased (with no 2nd wave) and we get some confidence back in the market – we can see that in the 29% surveyed who feel better about the future.
Otherwise, I’ll be expecting a FLOOD of emails like the one I received earlier in my inbox.
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