Top 3 Tips For Landlords To Survive The Coronavirus Crisis
If you are like most investors, one common question you may think of is what to do if your tenant cannot pay their rent due to COVID-19?
Rest assured, you are not alone as this is an issue which, unfortunately, is faced by many Australians during these difficult times. So what can landlords do to survive this crisis?
Our Top 3 Tips For Landlords To Mitigate The COVID-19 Crisis!
1. Explore the various subsidies available to you and your tenants
With unemployment now widespread, the government has moved fast to prop up people’s incomes. Make sure your residential and commercial tenants are aware of the JobKeeper allowance which pays $1500 fortnightly to those who have lost their jobs due to the coronavirus. It’s money that could mean the difference between whether they can pay rent or not. Individuals who don’t qualify for the JobKeeper allowance can still access the JobSeeker allowance which has now been beefed up with a coronavirus supplement. If you use a company to run your rental properties and your income has been affected by the corona situation, you may be able to access the JobKeeper allowance yourself. Meanwhile, there’s a raft of smaller state and federal government schemes aimed at reducing pressure on COVID-19 affected companies, such as fee waivers, tax assistance, and loan guarantees. Investigate these online and keep abreast of coronavirus news.
2. Negotiate with your tenants and bank for tailored solutions
Federal and state governments are working together to implement a six-month no-evictions policy during the coronavirus crisis. However, the implication is that any missed rental payments would be payable at the end of the crisis period. While it’s tempting to grab the cash, it may be smarter to look at the long-term game and consider offering long-term tenants a rent reduction or, if you can bear it, a temporary rent holiday. Insisting on full rent throughout the crisis may be enough to send them to the wall – meaning you face an extended period of no income plus the hassle of finding new tenants in a saturated market post-Corona.
Also, be sure to talk to your bank about mortgage relief. The nation’s major banks have announced landlords can defer their mortgage repayments by six months provided they don’t terminate the lease on tenants affected by COVID-19. Depending on your situation and any financial distress you are experiencing, you may be able to negotiate an even better deal with your own bank.
3. Have comprehensive Landlord Insurance cover
There are many different insurance companies protecting landlords, offering a multitude of different policies.
I’m pleased to see that currently, they’re standing behind their policies. According to EBM Rentcover Insurance, it is business as usual for your landlord insurance policy.
“Pandemics do not alter any of the existing terms and conditions in your landlord insurance policy.”
‘Rest assured, just because we are in the middle of a global pandemic, an insurance policy will still cover what it is designed to cover. Landlord insurance policies are black and white.”
Now more than ever, you need your property managers to be proactive, be informed and guide you and your tenants through these difficult times. So, remember, while the coronavirus situation is serious, there is light at the end of the tunnel. Landlords who keep informed and take proactive steps to protect their livelihoods stand the best chance of emerging from this period in a solid financial situation.