We never thought we would be in a situation where a virus bought the world economies to a standstill. Where social distancing is what we must practice and “toilet paper gate” would be a thing!
I am an investor and when COVID-19 reared its ugly head one of my first thoughts were: Will my tenant need to move out and how will I cover the rent?
My property provides housing for my tenant and it is part of my retirement fund. The role of my property managers is to ensure that the property is maintained, and I continue to get capital growth.
Could I be the empathetic landlord in unprecedented times?
It was great to see the Government Stimulus package on the ability to freeze my mortgage payment. However, some banks are probably doing this better than others.
Then the shutdowns started, and as I watched it unfold slowly, I saw the queues outside Centerlink, like many other investors my thought again went to: Is my tenancy secure?
Across the country right now, many tenants have lost their jobs. Predictions are that unemployment will rise to over 10% and this will impact the investment market, rent rates and vacancy rates.
In my day job, I am the CEO of Harcourts Property Management and the Director of Harcourts Move in Victoria, we have 400 properties under management and over 600 investors who trust us with their property.
Tenants are calling us every day to ask for rent reductions, some have simply abandoned the property and at some point, we will start to see lease breaks.
Many of these tenants have never been unemployed, they don’t have a lot in savings as they are young, those that are older are potentially facing early retirement if they have enough super to do so.
I cannot imagine what it would be like to stand in those queues for hours, trying to get money to pay bills of which rent is one of them, and at the same time staying far enough away from the people on either side of me so this invisible enemy doesn’t get me.
The Federal Government has made it very clear: We cannot evict a tenant if they face hardship due to COVID19.
My property managers are across the Government Stimulus Packages and our focus right now is to ensure security of tenancy and the payment of rent in the fairest way.
Where a tenant has requested a reduction, we assess the financial situation of the tenancy, remember you may have more than one person in the property. Where applicable we have discussed options with the investor and provided a rent reduction for the period of time it is required for… the end of COVID19 or they have a job.
It is important right now to keep communication lines open between yourself and your property manager. Our property managers have an ongoing list and each tenant is contacted on a regular basis to ensure that they are ok and their health or financial situation hasn’t changed.
As an investor if I am asked to reduce rent , I want my property manager to provide me with all the relevant information so I can make a financial decision.
However, above all else I need to have empathy with my tenants, having a roof over their head is a basic need.
Tenants see where they live as their home, it is where they live, love, bring up family and create memories.
I look forward to the end of the next 6 months, I wish we could fast forward our way there, however that is not possible. What is possible is that we all work together to ensure that our tenants continue to live in the place they currently call home, that is providing them shelter and safety and the Government Stimulus package has enabled us to protect our investment income as well.
We thought 9/11 changed the world, COVID19 will change us in ways we never thought possible, life won’t be exactly the same again, my hope is that we get through this whole and together and we can go back to enjoying ourselves at the beach, in our favourite restaurants, bars and more importantly a family dinner where we can hug each other and social distancing is a thing of the past.