Helping landlords stay on top during COVID-19!
by Emma Allen
During these uncertain times we need to keep up to date with information and changes without getting overwhelmed. We also need to take action well before we find ourselves in a bind.
Over the past week we have had countless conversations with investors and our expert panel of partners across the industry. With so many factors changing and evolving around us, it’s understandable to feel anxious but you are not alone, we are definitely all in this together.
One of the things that stands out between talking to people on the ground versus media or even property discussion groups online, is the level of panic. When swimming in uncharted waters, there’s an assumption that you’re either swimming or drowning, but this is not the case. There are various ways to deal with your investment, your finances or the way you look for tenants. NOW is the time to make sure you have things in order well before it gets hairy.
Below we have compiled some key tips to help landlords stay on top during the COVID-19 situation.
- MANAGE YOUR FINANCES – as property owners our mortgages don’t change, even if the situation around us has. However, the lenders are just as keen for your business and offering some very low interest rates. If you haven’t already, have a chat with your mortgage broker to review your current loans including your owner occupier ones. There may be various options before even getting to ‘mortgage freeze’ which itself is not free money. Seek their advice and place yourself in the strongest position to deal with the coming months.
- IF YOU ALREADY HAVE A RENTAL PROPERTY – the important factor here is receiving rent. Fundamentally, everyone needs a roof over their head so you will have seen the governments emphasis on rental assistance. The biggest impact to a tenant defaulting on rent is if they lose their job. The announcement of the ‘Job Keepers’ initiative on 30th March has eased that pressure somewhat and more employers are retaining staff. Interestingly, not all tenants are screaming for a discount. Image Property, our Brisbane recommended Property Managers recorded just 3% of tenants on their books needing rental relief. Having a proactive Property Manager who communicates with tenants and finds alternative solutions beforethey defaul is key. Just be mindful thatany new arrangement can void your landlords insurance, so be sure to check this before you commit to changes.
- IF YOU’RE GETTING READY TO SETTLE OR HANDOVER A PROPERTY – you might be feeling the pressure of having a new mortgage soon, so getting a tenant in as quickly as possible is the focus. Work closely with your Property Manager so you can have them prepared prior to your settlement date. Experienced Property Managers have already adapted to ‘social distancing’ restrictions with alternatives like virtual tours and individual inspections. Tenants are still active albeit in smaller numbers. It’s just not as visual as when the property market would make headlines for record numbers at an auction or open home. It’s more like a covert operation but our Property Managers are still actively screening and signing up tenants including throughout this past week. Mint Property Management, our Melbourne recommended Property Manager re-let a unit by advertising within the complex itself. Vogue Real Estate, our Sydney recommended Property Manager leased one of our staffs personal investments just last week. Got to think outside the box… and it does help to have the unique characteristics our strict research looks for in these properties!
- IF YOU’RE IN THE PROCESS OF BUILDING – construction continues across the states. Many of the medium sized Australian builders have already sourced their materials or use local materials so the main focus for them is health practices onsite such as strict social distancing. One of our main builders has already shared their COVID-19 contingency plan for site foreman with ample staff ready to take over should there be any that fall ill. Project timelines are still currently on track, however, if there are delays it’s anticipated it could be within the council building approval process or at the titles registration at the end preparing for settlement. Some restrictions on movement for inspectors are a part of this challenge.
- INSURANCES – now is the time to review your insurances. Look at what you have in place, what you need and make adjustments as required. Check what options or impacts there are related to Covid-19. Seek the advice of your Financial Planner or let us know if you need help with Property related insurances as many of these companies have closed their books but we have associates who can help.
- MORATORIUM ON EVICTIONS – part of protecting people during this outbreak is the security of having a safe place to live. The Moratorium on Evictions announced by the Prime Minister on 30th March was to prevent landlords evicting residential or commercial tenants due to financial hardship. It does not mean that rent does not need to be paid during this period but rather, that it is deferred. Whilst the moratorium was announced at Federal level, the jurisdiction falls to the State Governments so the final details will depend on the location of the property read more
- QLD RENT RELIEF PACKAGE – the State Governments have begun their support for rental stability through things like the QLD rent relief package announced yesterday 2nd April. This provides Queenslanders who have lost their job due to the impacts of COVID-19 with up to 4-weeks rent (max. $2,000) as a one of payment from the QLD Government read more
In practice, tenants and landlords can work well together to get through this with the support of your property manager and the people in your team. These unprecedented times mean that we need to stay on top of our finances but talk with professionals and seek help early. If you experience financial hardship please get in touch with the relevant professional ASAP. Don’t wait, start the conversation and take action!
Lastly, up until two weeks ago there was a healthy number of people participating in the property market. Participation has since reduced, however, there is potential for investors to jump in during the coming weeks. Like the above, be vigilant and prepare yourself for when those opportunities arise. Like all things, this too will pass and property as an investment vehicle will still be here well after COVID-19 has been defeated.
If you have any questions or would like some recommendations please call us on 1300 449 974 or email email@example.com