Christies Beach 
During an episode of the Smart Property Investor Show, Phil Tarrant chats to Tom Panos about the affects of the pandemic on the real estate industry.
The pair discussed the effects from multiple view points, particularly landlords, in an attempt to quash some misguided beliefs on their financial position.
Several government efforts such as the Job Keeper initiative are helping businesses stay afloat, tenants pay their rent and landlords pay their mortgage.
It is a common misconception that landlords are wealthy people. Many tenants expect that they should receive a rent reduction, and assume that landlords will be fine paying their mortgage, especially if banks can freeze mortgage payments.
The fact is that the average investors are the people you know in your community. In many cases, they go without to make their mortgage payments, in order to set themselves up for retirement. If these investors freeze their mortgage payments, they will still have to pay that money back, only they will be making those payments at default rates, so in affect, it will cost them more. Now, throw in a loss of rental income and these people are much worse off.
For those landlords that can afford to reduce their tenants rent, that is a lovely gesture and a smart move if you wish to keep your tenant in the property while they are suffering hardship. However, it should not be an expectation, as not all landlords can afford to do this.
Now, we have been quite fortunate here with our rental clients, in the fact that most of them are good, honest people and have sought other means such as Centrelink or Job Keeper to pay their rent. In the podcast, Tom and Phil discuss some people who have attempted to capitalise on the pandemic, giving one example of a tenant who suffered a 10% loss in income but requested a 60% reduction in rent.
The pair express that this will only delay the national financial recovery and that if you don’t actually require a reduction in rent, then don’t take it.
Market predictions are uncertain at this time, and although we can expect some forced sellers, in Phil’s opinion, he doesn’t think there will be too many, as being able to freeze mortgage payments might just be enough to get investors through this difficult time.
Phil and Tom encourage people to look for opportunities, rather than focus on the negatives of the situation. Many businesses have been forced now to create methods where staff can work from home, and some may choose to continue this, which could create wonderful opportunities for many individuals.
At the end of the podcast, the comment was made that COVID-19 has accelerated our growth in the digital world, allowing us to stay even more connected with each other.
Click here to listen to the full podcast.
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Phil Tarrant chats to Tom Panos
22/04/2020
Article posted by Professionals Christies Beach
