PM announces landlords will have to do their bit!!

No chance, it would never happen. A more likely scenario would be tenants in distress receiving some form of rent assistance.

 

The various news articles I've read today make it pretty clear that they are looking at stopping evictions and are expecting landlords to take a significant portion of the pain.

 

The one I saw was from Jason Clare, ALP shadow minister. Not in a position to dictate anything.

 

You would be unlikely to be eligible for much centrelink if anything if you own an investment property outright, the assets test is only something like $250,000 net assets outside your own home and super for a single job seeker before the payment cuts off entirely. Pensions the asset test is higher. Of course if you can't get a centrelink payment you don't get any of the concessions on rates on your ppor etc either, you could get a low income health care card but that doesn't really get any concessions apart from the health related ones. Of course sensible landlords saved buffers to survive several months of no income but no one could anticipate that they are proposing that a tenant be completely immune from eviction due to non payment. Having the property completely empty is cheaper than a zero paying tenant and at least it can be more easily sold.

Despite your zero income, you will be expected to support a non paying tenant as well as yourself because you are a rich greedy landlord.

 

I read one direct from scomo

 

If tenants pay reduced (or no...!) rents, we'll be involuntarily charging you less

 

Assumptions which could be completely off the mark. ....

There will be landlords that will be struggling today

surging house prices and rents??

You are assuming all investors purchased in Syd and Melb. What if they purchased in markets that have been falling. Yes, would believe not all markets have boomed

You are also assuming that all investors have been in the game for decades, what if this is not the case?

i wish people would stop making broad statements and consider that there are many scenarios here that can impact significantly on income

 

What if I borrowed to invest in shares?

 

Great the property owner gets screwed.

If PM fee is 10%
If rent is $300 then PM gets $30

Let's say they only collect $210 or 70% instead of getting $21 they should only get 70% of that or $14

Why should I collect less from my business when the PM still gets what they should be paid for collecting a reduced amount

 

Sure. But if it got to that point then that family was already over-leveraged.

Hold if you can, sell if you can't.

 

Anyone know if there is time-limit on the on the repayment holiday? i.e. mortgage needs to held for longer than x months?

 

We are waiting until the official announcements. The banks cant make any decisions until after the Gov makes theirs.

 

Obviously we have to wait for further details on what was meant by this broad statement.

However, I don't think the tenant would be able to go forward paying no rent, and no possibility of eviction.

Just as one example, assume we have two tenants in a property and both have lost their jobs.
The change in jobseekers allowance entitles each of them to $1,115.70 a fortnight (or roughly $29k p.a) , an increase from the current base rate of $565.70 per fortnight.

This leaves them with just of $27k after tax, or $54k for the household.

While this might not be enough to cover all of the rent, and normal living expesnes, surely the tenant should be expected to contribute part of this income to their rent....or am I crazy?

 

Also, as someone had mentioned earlier - many landlord insurance policies will not cover the rent if the landlord and tenant agree to a delayed or reduced payment.

In order to get some guaranteed form of payment, it sounds like our only option is to threaten eviction if it comes to that...

 

Just engage with them and try and get something rather than nothing .
Probably wont be able to evict them and when its all over peoples attitude to carrying large debt with crappy yield and no intention of ever paying it off will change.
25 years with no recession is pretty impressive, but all good things eventually come to an end .

 

Sounds like it will be tabled at the National Cabinet tomorrow night.

Let’s wait until then before ...

In meantime, I am in the process of running some scenario planning.

Stress testing our situation by running scenarios like what happens if I lose 5% of our total rent, 10% of our total rent, 20%, 30%, ..., all the way up to 100%. I want to know at what point does it get ugly for us?

For the next 6 months, I will be keeping a very focussed eye on expenses, especially maintenance across our portfolio.

I will be doing this no matter what the Government does. It is good business management, especially so in our currnt situation.

Will State Governments offer some sort of Land Tax relief?

We are all in this together. We have some really lovely tenants who we would love to still have when we get to the other side? And yes, we have some that aren’t my favourites (one in particular would not surprise me if they try to rort the system).

I am sure that PMs will be advising all tenants that, if you get into some financial difficulties, you obtain some rent relief, run up an IOU then shoot through (very in-Australian), then there will be a big cross on their TICA record.

In the future, I for one will be loathe to rent to someone with such a cross.

 

Same here. I want to know just how exposed I am. How many are already on Centrelink. No excuse for them to not pay, although some may try.

 

The way I see it is most of us will be worse off, it's just a matter of how much.
Centrelink payments will not be means tested.
Both rents and mortgages will go on hold.
Power will be subsidised.
ScoMo will provide enough money for people to exist, but not thrive.
Essentially, we all go into hibernation.

This is the "rainy day" reason for investing in the first place.
Hopefully, most of us come out the other side alive, even if we are a bit poorer.

 

Well, after spending all morning talking to PM's. I'm happy to say that around half of my tenants are already on Centrelink. Normally not something to be happy about, but if they can pay before they get any stimulus, no excuse now, going into this.