COVID-19: Tenants & Landlords (Residential)

Armin65 on 17/04/2020 - 10:19
Last edited 21/04/2020 - 10:02

Good morning fellows

I'm renting an apartment and with current situation, my and my partner's working hours have been reduced :(
I tried to negotiate with property manager to reduce rent for 3 months, but they rejected and said you should pay in full; go and seek financial support from Centrelink, etc etc.

I am just curious why government is not stepping in to help out. I've got a few friends who have got their loan suspended (by just paying interest only) and they reduced their asking rent from their tenants accordingly. If that is the case for my landlord too, yet still forcing me to pay the rent in full, they are simply making a good profit while their tenants and other people are in financial challenges.

Let me do some calculations: The apartment I am living in worth around $400k. Even if 95% of it is on loan ($380k), below is the outcome from CBA calculator:

Interest Rate: 2.79%
Principal and Interest repayment: $1560
Interest only repayment: $1061
Original rent: $2100

So, as landlords are paying around ([$1560-$1061]/$1560=) 30% less, some leniency from landlord is expected.

My simple suggestion to Government is:
If a landlord ask their bank to put their investment loan on hold, they have to reduce their asking rent for their tenants accordingly.

This way, we are all sharing the pain together on this by helping each other; otherwise, it will end up with many broke people, and an unsafe/unhealthy community.

I am not working today, probably like many of you, so I thought it is good to share this with you. What's your opinion?

update1:

Thanks for those giving valuable insight on this thread…
To give everyone an update:
I finally found another nice place…well, smaller but much cheaper [apparently LL are desperate to find a tenant and I had enough room to negotiate for the rent ^-^] which is more than enough for us now. I gave my current property manager a notice that I'm vacating in 4 weeks. He called me straight away that LL is happy to offer 30% rent reduction for 3 months if you withdraw your notice.
And I said:

NAH MATE, TOO LATE … THANK YOU!!!

p.s. I also mentioned that due to current situation, I won't be comfortable to let other people in for inspection while I am still here :)))

Financial

Comments

  • netjock on 18/04/2020 - 16:46
    +1

    I am not working today, probably like many of you, so I thought it is good to share this with you. What's your opinion?

    Guessing game.

    Maybe you should become a landlord because you figured out there is a 30% profit.

  • mangomuncha on 18/04/2020 - 17:14
    +4

    Maybe you’ve already answered this and I’ve just missed your comment but a lot of people have asked you the legitimate question of whether you’d be willing to take a rental decrease now but pay it all back later. You’re asking for the pain to be shared during this time but you should then also be willing to share the pain later when the landlords are facing an extended loan after the deferment ends.

  • Cul8r on 18/04/2020 - 18:20
    +13

    Out of curiosity, if you got a massive pay rise would you offer to pay more helping the landlord out? Probably not.

    Some very informed and well rounded commentary would have you thinking a little more macro. But I will share a story from someone very close to me.

    A pilot of 15 years, he’s the guy that’ll get you to Europe next time your travelling. Living the life, making great money, a captain of huge aircrafts. Everyone envious of the discounted travel and “high life” of spending more time overseas than in Australia.

    Wants to settle down so will sell his apartment in the city to get a little more space for family. On the market 6 months…can’t be sold… he may have made a mistake back when buying the apartment… opts to keep it and refinance to purchase an additional property. He’ll have additional income with the rent, he’ll be ok…financially stable for many years…

    That job… now what? Gone. Plenty of savings, but when are things returning back to normal? No one knows.

    The tenant.. also lost their job, offers to pay 20% or pay nothing till vcat support evicting him.

    The pilot, now stacking shelves in woollies in the evening… and answering calls during the day filling that void in customer experience a lot of our companies have now, to pay two mortgages.

    No doubt these are terrible times… The ultimate measure of a man is not where he stands in moments of comfort and convenience, but where he stands at times of challenge and controversy.

    • parsimonious one on 18/04/2020 - 19:00

      Hi there Cul8r,

      that's an interesting example to consider when trying to see the rationale behind the no eviction policy.

      Scenario 1.
      Pilot (and other LL's) in a similar position evict the tenants who given reduced income have trouble securing new premises.

      This would lead to increased number of properties for rent in a short period and lots of potential renters without capacity to pay current rents. Properties thus sit empty (therefore providing zero benefit to pilot) or rents get reduced to a price that people can afford to pay. So if pilot is lucky he gets a period of vacancy, pays new letting fees to agent and gets new tenant paying lower rent. Pilot struggles on, old tenant goes elsewhere to struggle on

      Scenario 2.

      Pilot (and other LL's) reduce rent, saves the hassle/ costs, dont force man (+/- families) out of current premises in pandemic and parties struggle on where they are til things re-open/ recover

      Scenario 3.

      Pilot (and other LL's) decide that they cant maintain premises with reduced rent/ income and sell properties (either vacant or with current tenants on reduced rent).A multitude of "investment" properties enter market (along with owner occupiers increasingly forced to sell by banks) in uncertain times, rising unemployment and looming recession. Vendors pay agents fees and jostle to sell in falling market thus selling at a significantly lower price than if sold in less desperate circumstances.

      Which sounds like the least worst option to you?

      • Cul8r on 18/04/2020 - 20:25
        +1

        Yes scenario 2 to me sounds like a suitable option on the surface, and I’m no economist but it does sound like the most viable for the country as a whole.

        As an individual I would ask, Is 20% rental income, now worth the risk of property damage and/or strain on the landlord when requiring to resolve issues that could surface… heating repairs? Hot water Unit? Smoke alarm service? Not to mention the deterioration of the property that occurs through use. Even in the markets in the Philippines they laugh you away if you offer 20%… because it’s not worth their time.

        Play out scenario 2 further, tenant sits on hands and feels they could push harder and offers 10% or zero in a couple months time. Pilot struggles with both jobs and ultimately falls ill, or the family dissolves under the new found burden he carries. months pass and both loans default. Tenant has no where to live and the family previously under one roof now needs one…or two. Wealthy investors slide in under them and pick up a couple bargains.

        We’re in a world of hypotheticals now… so may I offer a scenario 4

        Tenant takes pilots woolies job, reassesses financial situation and doesn’t present an ultimatum. They too understand they have a financial commitment they made and do everything in their power to meet this, Like many have posted in this thread.

        I’m definitely not here to start any online flame war. We all have much better things to do with our time. But I do appreciate the effort gone into your response regarding impacts to decisions. Not a lot of people think of the negative outcomes… usually just what benefit is seen in the immediate- I appreciate this.

        • Levathian on 19/04/2020 - 15:26

          The thing now is that woolworths and Coles don't really need all these new hires. Not many of them will get full time hours so it will inevitably be up to the government to support these people.

      • [Deactivated] on 21/04/2020 - 12:10

        Finally someone who understands what I've been saying. Scenario two is exactly what I've been trying to say, people are saying LL are not charities and shouldn't be reducing rent, I wasn't saying LL should be doing it out of the kindness of their own heart but it's to avoid scenario 1 or 3. Like OP's LL, he was just too stubborn and didn't care about the tenant. He finally realise he should have just negotiated at the start but good thing OP told him to get stuffed.

        Scenario two is idea imo but requires LL to reduce rent. It provides security for everybody.

  • CalmLemons on 18/04/2020 - 20:22
    +5

    Interest Rate: 2.79%
    Principal and Interest repayment: $1560
    Interest only repayment: $1061
    Original rent: $2100

    No. Investment property interest rates are 3.3-4%, or higher. They are not the same rates as home loans.

    You are also forgetting:

    Land tax, council rates, water fees, owners corporation fees, + maintenance = a further $5000-7000 a year, thats $135 per week at a minimum of expenses you do not pay for. This means interest and expenses is probably the same or beyond the rent that you pay.

    To go into detail
    $380k at 4% interest is $15200 without compounding interest which the bank charges
    $1500 land tax, $2000 council rates, $500 water, $500 maintenance, $2500 owners corporation = $7000
    Total min cost to landlord is $22200 at interest only.

    You add in principle your landlord is likely paying $25000-$30000 per annum.

    How much rent did you say you pay a year?

      • dtxau on 18/04/2020 - 22:59
        +3

        why they buy investment property then?! Ha….just to pay $30k extra payment annually?!

        For you to help the LL pay a portion of the property? So once paid off, he can say Armin65 was nice enough to help with my retirement fund/financial independence/etc. You have a lot to learn my son.

      • Chang1992 on 18/04/2020 - 23:19
        +5

        But LL were paying this all before pandemic

        Yes the landlord was paying for maintenance, bills and other fees before the pandemic. You were also paying rent before the pandemic.

        • lockmc on 19/04/2020 - 08:50
          +4

          Such a dumb argument from the OP. Was paying those fees before? What's his point? He was paying those before because he had a rental contract in place!

      • Ash-Say on 19/04/2020 - 09:45
        +8

        Op you seem so entitled and greedy. You don't want to touch your savings if though you have 2 incomes sources and want the landlord to dip into their savings instead. You have no clue how investment property works.

      • CalmLemons on 19/04/2020 - 19:06

        test

      • CalmLemons on 19/04/2020 - 19:10

        Block-quote On another note, assuming all your calculation are right, why they buy investment property then?! Ha….just to pay $30k extra payment annually?!

        You make money. You spend some money. You put money into investments. Property investments are amongst the most reliable, generally. I personally would never buy an apartment. There are many other things to mention here I won't go there.

        As an example, if you buy a house though, you will be paying more expenses than the rent. But in 10 years time, the capital gain from the property may be significantly more than the overall loss of interest. There is a lot more to this, like anything in life, you need to do your own research, have brains AND effort.

        Your life and what happens in it, is your responsibility alone. it is not anyone else's responsibility.

        • Armin65 on 20/04/2020 - 21:14
          +1

          your points are valid..thanks for your fair comment :)

  • rily001 on 18/04/2020 - 21:45
    +8

    TLDR; but my view is if you're in financial difficulty and cannot cover your rent you should raise this with your landlord and discuss. if you are not in financial difficulty or entering financial distress then you're just trying to milk the situation to your advantage. The landlord has every right to say no.

    If you're still unhappy with the situation you can always consider vacating the property and move into one that has a lower rent. Given the current environment I would say renters have more bargaining power and you might be able to find another place that fits your financial requirements.

    The landlord will then have to find another tenant.

    Also your loan assumptions does not take into consideration of the overall loan term. Changing from P&I to IO means the landlord may have to pay more later on and overall will be more expensive for the land lord. Deferring PI or Interest payments for 6 months will also mean the land lord will be worse off in the long run.

    • jace88 on 19/04/2020 - 00:58
      +9

      My tenant tried this on me. When my agent asked for him to provide any evidence of hardship he stopped asking for the reduction.

      I appreciate if someone is in genuine hardship then I should offer to help but I’m also not willing to entertain opportunists.

      • Levathian on 19/04/2020 - 15:31
        +4

        Didn't someone else here have that happen too? Like heaps of tenants demanded relief but hardly any of them were willing to provide proof.

  • tik tok on 18/04/2020 - 22:19
    +2

    Did you agree to pay the rent based on what the owners outgoings were ? If that is not a clause in your lease, then there is no grounds for either parties to consider it.

    Two ways to look at it. May be the property was paid in full so the bloody hungry land lords are simply money hungry ?

    Other way to look - if the owners are just regular Aussies then do you know for sure if they haven't had their hours/pay reduced ? Also you haven't considered body corporate, land rates, water rates, property manager (if there is one), bank account fees (if there is any) etc. Also possible the owners fixed their loan a while ago and have been getting shafted by the bank ?

    Have you considered applying for a housing commission tenancy ?

  • gear50 on 18/04/2020 - 22:36
    -1

    That reply from them is just a starting negotiating position. They're taking a maximalist position to try and get you to (profanity) off but you have a lot of leverage here. If I really wanted my rent reduced, I would start by informing them that I no longer intend to make payments on your rent say from 1st of May (that doesn't mean you have to follow through on it) and refuse any eviction attempts or early discharge from contract offers.
    Evictions aren't happening right now so they can't force you to leave. I suspect that eventually they will compromise with rent reduction (make sure to get that in writing). If they still refuse then you decide between not paying rent (consequences may apply) or backing down and paying.

    Standard disclaimer that I am not a lawyer and these comments aren't advice on how to act in your situation.

    • BestofOZB on 18/04/2020 - 22:49
      +2

      Or maybe advise OP to just pay his rent.

      • gear50 on 18/04/2020 - 22:57
        -1

        I'm not telling him to do anything and I'm certainly not going to tell him what is right or wrong. I don't know his personal situation not his landlord's situation. OP said he was in financial distress and he wanted to have his rent so I'm just telling him how I would renegotiate a lease.
        If he wants moral advice, I would point him towards a priest.

    • simonjb on 19/04/2020 - 07:20

      A letter from the tenant stating he will no longer pay rent from a date is a letter with serious consequences, as that will be passed on to any property manager that enquires as to the OPs rental history. This OP personally I hope he takes your post as advice. Holding 5k+ in savings and not wanting to pay rent.

  • Gerry H on 18/04/2020 - 22:42
    +5

    landlord might have fixed rate at much higher than 2.79%. plus council rates, management fee (for apartment), land tax (houses), water charges, maintenance/repairs. you must be delusional if you think landlord makes a profit off your rent. if you truly believe your rent covers all expense why not buy the property yourself?

  • minniethemoocher on 19/04/2020 - 00:27

    You are in Melbourne so the new legislation announced by Daniel Andrews will be relevant to you. You should check out https://www.premier.vic.gov.au/supporting-tenants-and-landlo… There is rent relief for renters affected by Coronavirus if you meet certain conditions. There is also a land tax discount for landlords who provide rent relief to renters affected by COVID-19.

    • [Deactivated] on 19/04/2020 - 03:20
      +1

      to be eligible for the grant you will need to have registered your revised rental agreement with Consumer Affairs Victoria or gone through mediation, have less than $5,000 in savings and still be paying at least 30 per cent of your income in rent.

      Hope has more than $5k savings and is not eligible.

      • [Deactivated] on 19/04/2020 - 11:49

        *Op, not hope. Silly autocorrect

    • funnysht on 19/04/2020 - 10:32

      How about a simple rent allowance, i mean the gov is dishing out $700 a week payments easily? Why make it so tough for tenants/landlords to receive these payments.

      Banks? Why don't force them halt any interest payments.

      We can argue all we want, but we really know who the gov is working for!

  • Dr Cheapo on 19/04/2020 - 08:57
    +3

    There seems to be alot hate in this thread, people are greedy and some take advantage of situation whilst others refuse to budge despite the potential crumbling of our society.

    I've spoken to 3 real estate agents in my area and each have told me the following

    IF the tenant has experienced and pay reduction of 30% and can get there place of of employment to write a letter addressing the landlord of this, they are entitled to ASK the land Lord to reduce there rent (if the landlord allows) for example $500 to $450 a week for an agreed allocation of time. HOWEVER at the end of this agreed time the rent would increase to $550 for the same period to equal out and balance the above.

    Correct me if I'm wrong but this seems reasonable? (and please do! Genuinely learning)
    Landlords can defer there payments but they will pay back every cent just like tenents should?

    The idea of this is to get us through to the other side of this pandemic
    There is no such thing as a free lunch (except on ozbargain ;)

    • ozhunter on 19/04/2020 - 09:09
      +2

      The tenant can ask the landlord anytime for extra time to pay their rent or for a reduction. Landlord isn't obligated to give either.

      • Dr Cheapo on 19/04/2020 - 10:18

        Yes I agree

    • funnysht on 19/04/2020 - 10:30
      +1

      Dr Cheapo- completely reasonable, I agree.

      • Dr Cheapo on 19/04/2020 - 11:07
        +1

        Thanks man

    • [Deactivated] on 19/04/2020 - 11:56

      Even as a LL, I find this unreasonable. All those hoops to jump through to maybe get a meager rent reduction of 10%, which in reality is more a deferment than a reduction?

      Has anyone taken that offer? It would be easier for the tenant to move out or to stop paying rent altogether and deal with it at the end of the 6 months.

      • Dr Cheapo on 19/04/2020 - 14:22
        +1

        You can negotiate whatever amount you'd like

        Yes I know 2 separate examples

        It is a reduction because of hard times during the covid pandemic achieved through deferment

        It is equal for tenants landlords and banks

        • [Deactivated] on 19/04/2020 - 16:57
          +1

          There is no guarantee that the tenant will still have a job at the end of those 6 months, let alone that they will be able to afford an even higher rent than they were paying pre-lockdown.

          What happens if they move out before the new rate hits?

        • SlickMick on 20/04/2020 - 20:47

          edit: posted my comment then read exactly the same thing in next comment

    • surm on 19/04/2020 - 21:18

      Landlords have to pay interest on deferred payments, so for it to be precisely fair, tenants have to pay interest on the deferred rental portion ($50 a week in your example).

      DrCheapo, Your suggestion is spot on, however, tenants may choose to break the lease or vacate after they finish the "cheap rent" period, shafting the landlord.

      • Dr Cheapo on 20/04/2020 - 13:54
        +1

        Yeah I think your right, what stops them from leaving after the rent reduction? I guess real estate agent would stipulate this in some sort of contract? I'm not sure

  • Chumly on 19/04/2020 - 10:53

    I am intrigued that you have been negotiating for three months which means since mid Jan before this pandemic was public knowledge.

  • randomusername2017 on 19/04/2020 - 11:05

    @Chumly

    Requesting reduced rent for a 3 month period…
    Guessing anyone that had tried to negotiate with the Op for 3 months would no longer be around.

    • Chumly on 19/04/2020 - 11:13

      Thanks for clearing that up.

      I need to go back to comprehension class.

  • DanielR on 19/04/2020 - 11:12
    +3

    Jeez your a nightmare of a tenant, if I were your landlord I wouldn’t renew the contract.. have you thought about that? Have you thought about the risks in what your doing? You know there are plenty of people still looking for housing…. stop being an opportunist and be grateful you got a roof over your head there are a lot of people worse off than you.

  • lowlifesphere on 19/04/2020 - 11:53
    +2

    If you are unable to pay your rent and the landlord can’t negotiate on the original agreement then find a cheaper place.

  • annyfication on 19/04/2020 - 13:50
    +1

    Perhaps you should move to somewhere that isn't costing 2.1k rent per week. There has to be places that are less desirable but <$1k per week. A Sydney apartment that's 2bdr, 2bath, & 1 car space apartment 20 min from city and 5 mins from train station is $450 pw.

  • Miss B on 19/04/2020 - 16:17
    +6

    Based on it being a $400k apartment, $1560 payments, when you say $2100 you mean per month. With monthly rent I like to pay fortnightly and have 2 freebies where I don't have to pay rent.

    So say you and your partner are paying $1050/fn. Currently there is no asset test for Job Seeker, since the end of March. Assuming your incomes are both reduced to $0 and neither of you are eligible for Job Keeper (which would be $3000/fn before tax if you're both eligible). You'll be on $2164/fn after tax from your first payment from 27/04/20 for 6 months or as long as you need it. You've said you both have your incomes reduced, so you're both still earning some money.

    You might struggle for up to the next 3 weeks, but you have savings, all good. It might take them a few weeks to get it set up, but they back pay, so use your savings and you'll be reimbursed.

    Half is a little more than people want their rent to be, so if you want something cheaper move. Or negotiate to pay fortnightly, so it's around $970/fn, to ease the burden a little.

    Why do you need your rent reduced for 3 months? Forget about the Landlord and their obligations, it doesn't really have anything to do with your rent. Why can't you pay rent? If you and your partner haven't applied for Job Seeker that's something YOU need to sort out. If you earn too much get it from 27th April you have plenty of income to pay that rent.

    The thing is, if you want a roof over your head rent should be a priority. Obviously make sure you have enough to eat a basic diet as well. Then your rent. It's the first thing I put aside each fortnight because I've been spoilt and I like living inside. After that, look at where you can reduce costs. Then, if you're struggling and you're sure you can't cut any more, go to the big businesses that you pay your bills to and sort out a payment plan. They'll look at your income and outgoings and work with you. At this point if you're still not able to make the budget work, double check if you have anything else you can cut. Then start dipping into your savings. If you don't want to, work on your budget more. When you have no savings, that's when you ask your landlord for a reduction in rent because you can't afford it.

    There are countries where you get SFA if you lose your job or income. In this very country, right up until the 27th of April people who have no income would get $1300 as a couple based on your rent, it's nearly double that (it's $2400 before tax now). Any assets also reduced your payment or prevented you from getting it. They would be evicted if they couldn't pay their rent. You are lucky. Remember that before you start talking about landlords being lucky to only have to pay interest, they still need to pay the principal at some point and the interest still accrues, obviously, because that's what they're paying. Why should they have to do that? It should be a last resort, not a first resort.

    • Levathian on 19/04/2020 - 20:26
      +3

      Unfortunately you make too much sense for some. Too many people seem to think free rent is their's for the taking. Think about it, why should a tenant demand rent relief if they can still afford it or have heaps of savings? I'm not saying dip into super or start selling assets eg. Car to fund it but some people like OP think that rent is now optional. Ridiculous.

  • berry580 on 19/04/2020 - 23:27
    +2

    Council rates, waters rate, strata, maintenance all keeps happening in additional to the mortgage.

  • surm on 19/04/2020 - 23:30
    +9

    1) Are any other private businesses besides the landlords required to offer subsidised goods and services to the COVID-19 affected clients?

    Certainly, shops don't sell subsidised food and clothes and petrol and car servicing to the OP (and other COVID-19 affected clients). So why do people think that landlords must take a hit and subsidise rent?

    2) In situations in which landlords are affected by COVID-19 more than their tenants are, are tenants required to increase rent payments to share their landlord's pain? If not, why does only one party ie landlord, have to share the other's pain?
    .

    • parsimonious one on 19/04/2020 - 23:52

      It’s late so I’ll just answer the first of your 2 questions:

      I am not aware of other businesses required to sell subsidised goods or services thus reducing their incomes.

      I am however aware of numerous businesses, even entire industries shut down completely ELIMINATING their incomes; pubs, gyms, private hospitals, AFL, NRL, olympics, Wimbledon, F1, live music industry, live theatres, airlines, travel agents, tourism/ hotels, anyone who relies on overseas students for their income etc etc.

      Go complain to anyone working in those industries how unjust a rent reduction is for you.

      • surm on 20/04/2020 - 00:01
        +8

        I am not aware of other businesses required to sell subsidised goods or services thus reducing their incomes.

        :-) Then it is amply evident that landlords should not have to take a hit and subsidise rents. Food and clothes are basic human rights, but shops aren't required to subsidise them for COVID-19 affected clients.

        • parsimonious one on 20/04/2020 - 08:01
          -6

          Yep. You are special. You should be protected whilst others suffer. I’ve been on this thread long enough. I get it now

          • surm on 20/04/2020 - 09:20
            +4

            @parsimonious one:

            Yep. You are special. You should be protected whilst others suffer

            The above is applicable when tenants like OP is asking landlord to subsidise rent because OP is refusing to use his savings or make adjustments such as cutting down on spending or downsizing accommodation!

        • Levathian on 20/04/2020 - 13:21
          +5

          Good point. Why aren't coles and woolworths, who make reasonable profits, under any kind of pressure to give people relief? Eg. If someone regularly shops there and you can see that with their flybuys/WW rewards activity, why aren't these companies 'sharing the pain' by giving discounts or offering extra points which can be used to subsidise purchases?

          After all rent is just the monthly purchase of the use of someone else's space and shelter. Why is this 'share the pain' rhetoric only aimed at property owners/mortgagees and not everyone else?
          These businesses have made massive revenue gains from the recent panic buying, surely they can afford give a bit too.

          • SlickMick on 20/04/2020 - 20:59
            +4

            @Levathian: I don't subscribe to the view that anyone doing well should be forced to be philanthropists, but I totally agree that a landlord's (and everyone's) generosity should be totally at their own discretion.

            And if a landlord chooses to be generous, they may well find far more worthy recipients than their tenants.

            • Levathian on 20/04/2020 - 21:52
              +1

              @SlickMick: I was just using it as a point that landlords are being singled out while there are plenty of other entities which you could arbitrarily pick out too.

              • SlickMick on 21/04/2020 - 20:56
                +1

                @Levathian: Yeah I was trying to agree with your point, but I guess I lost my way in trying to point out that we aren't expecting anyone to be charitable to us the way these whiny landlord-haters act

  • surm on 20/04/2020 - 00:17
    +3

    Suppose the OP has a bank loan. Does the bank share OP's pain? No. OP, all that the banks are offering is to claw back all unpaid premiums with market interest at a later date. No bank is offering loan reductions.

    So that's what landlords can offer to tenants. No rental reduction. Tenants can pay a portion of the rent but any unpaid rent portions must be paid back with interest.

    This is what banks offer to landlords, so that is what landlords can offer to tenants.

    .

    • SlickMick on 20/04/2020 - 21:06
      +4

      We already have anti-landlord laws in place. A landlord cannot charge interest on late rent. A landlord cannot require rent to be paid in advance, nor a sufficient deposit or bond, to ensure they don't suffer lose of rent, let alone recovery for any damage.

  • tiara on 20/04/2020 - 01:35
    +11

    My sister is a landlord and she used to work but now made redundant. She has modest lifestyle, very rarely buy clothing or shoes. She drives 2001 Ford Fiest and She has $99 phone with $10/month Belong SIM. Do you think you have the heart to ask for 30% reduction?. My point is please don't think you are entitled to a rent reduction just because you have a hardship due to this pandemic. Almost everyone suffers some kind of hardship right now. Adjust your lifestyle and cutback some unnecessary spending.

    • [Deactivated] on 21/04/2020 - 00:01

      Don't put all your eggs in one basket then? If your sister was the renter, made redundant, would she ask for a rent reduction?

  • itbargainhunter on 20/04/2020 - 08:56
    +7

    @Arimin65

    Some people just want a bargain in life without taking any consequences.

    When facing the situation with OP, it is understandable that OP tries to look for support by negotiating with landlord.
    But when it fails, OP thinks the Government should force a policy to "help" people like him/her and hurt another group of people (Landlord). OP thinks fellow Ozbargainer should even give him/her emotional support for that.

    Message to OP. This way of thinking will hurt you eventually.

    Make changes and grow up. (or seek mental health support if you are feeling anxiety)

    “Character is destiny,” Heraclitus (535 BCE — 475 BCE)

    • Levathian on 20/04/2020 - 13:06
      +1

      If OP wants a bunch of people to agree with them and circle jerk against landlords then r/Australia is that way - - - - - - - - - >

  • releasethekr4cken on 20/04/2020 - 11:26

    Did the property manager even take it to the landlord?

    Is that 400k (what you estimate the value of the property is) what the landlord paid for it? What something is worth now isn't necessarily what it was bought for. This is the nature of property.

    • mun4 on 21/04/2020 - 11:44

      Heaps of new built apartments have lost 30%+ in value even before the virus crisis.

      • releasethekr4cken on 21/04/2020 - 12:37

        That's my point, that won't stop a landlord (who could just be a single mum or a kid) trying to recupe their money.

  • Trojan on 20/04/2020 - 11:43
    +5

    If OP was a tenant at the Mascot towers, would he/she pay more rent because the landlord's costs has gone up (repairing the cracks)?
    Or would they say "See you later, my contract says I only need to pay rent if the premise is habitable"?

    When OP says "share the pain", it sounds like they are really saying, I want someone else to take the pain for me but its a one way street.

  • Jumpup on 20/04/2020 - 14:51
    +7

    When I was studying economics 10 years ago back at uni I remember seeing a graph due to the aging population, there would be not enough tax to fund social security benefits in about 20 years. So we would end up being like America.
    Correct me if I’m wrong but after seeing that I’ve always saved as much as I could to fund my own future.

    Also my parents were born during WW2 and told me how hard it was and how important having savings would of been. Always got that lecture and saving up and I’m glad I did. You never know what could happen one day (COVID or WW3) and everyone should be prepared to provide a roof over their head and enough food.

    It’s easy to live up life, buy that smashed avo on toast and that holiday.
    Hard work and saving up isn’t easy.
    Please people just think ahead and twice how important that new iPhone and holiday is etc.

    My partner and I are in our early 30s and both have our own property and savings.
    We just earned your average salary. We started with $0 and have a property each.

    Ways to get started with saving (everything adds up):
    Bring food from home to work (you get use to the boring food)
    Don’t buy the latest technology (you don’t need it)
    Don’t go on that extra holiday (only once in 10 years)
    Following fashion is expensive (Target clothing is good enough)
    We go to a cafe/restaurant once a week only
    Plan and prepare ahead what your going to cook so you don’t end up buying take away

    • surm on 20/04/2020 - 15:23
      +11

      Some people, who are not willing to forgo some luxuries and conveniences that you did, will call you and your partner "Fat Cat greedy landlords" and blame you for owning two investment properties which made it harder for them to buy a house. Then they want you to subsidise their rent because you are the "Fat Cat landlords".

      .

      • ongrudy on 20/04/2020 - 17:05
        +8

        Nothing wrong to be "Fat Cat landlords". It is better than becoming self entitled tenants.

    • funnysht on 20/04/2020 - 18:03

      i agree with some but not on the holiday part…if you lke traveling that is a better investment than a new phone/laptop. Given the prices on jetstar etc.

      • Levathian on 20/04/2020 - 20:44
        +1

        I'd rather travel and have lasting memories than go and waste money each week getting pissed up at a nightclub. Would probably cost the same over course of a year.

    • aboogee on 20/04/2020 - 21:48
      +4

      same boat mate. Totally agree. My last holiday was 8yrs ago. Managed to cash out all my leave which got taxed at 30% just to pay down my debt which is why it makes me sick when entitled people just jumped on and said it’s ok for LL to take the hit.

      • Jumpup on 20/04/2020 - 22:31
        +2

        I know what you mean. I need to cash out my leave or take it during this shitty time as I never took it. Getting taxed at 30% is making me feel angry as well.

  • [Deactivated] on 20/04/2020 - 20:00

    If you are going to rent and spend your spare cash on travelling tuff titties. While the rest of us pay off mortgages and everything else that goes with it. Glad I sold my last rental last year, the scum would of sure stopped paying after seeing how they looked after it.

  • Bills22 on 20/04/2020 - 20:27
    +1

    I don't think OP has ever owned a property at all. Or do they all think just because of reduced hours they can negotiate something and that all landlords are the same? I dunno…

    If you don't like it, you can definitely move out when the lease is up.

    • Jumpup on 20/04/2020 - 21:02

      It’s that mindset ‘just because my friend got their rent reduced I should as well’.
      We are experiencing that at the moment we both our tenants.
      The PM also made Landlords sound like rich disgusting people. “How dare we not cancel tenants direct debit”, “how dare we not support them”, “how dare we tell them to pay with their super”.

      • aboogee on 20/04/2020 - 21:46

        Did the PM really say that. Sorry wasn’t following news.
        Please can someone who happens to rent from him please let us know if rent was paused lol.. I’m genuinely curious.

        • Jumpup on 20/04/2020 - 21:53
          -1

          Yes those extracts words I heard him say on the radio and TV during questions after his speech.

          I’m starting to think if he even has any property the way he was speaking about Landlords….

      • Levathian on 20/04/2020 - 22:09
        +2

        The thing that gets me about the super thing is that we're all for protecting tenants super but what about if the landlord can't pay their mortgage and has to use their own super balance?

        • Jumpup on 20/04/2020 - 22:20
          +2

          Exactly!!!!!!!! Unfair.

          I’m just guessing…

          He knows these tenants will get pension once their super runs out.

          Landlords prob will never get Centrelink/pension because of asset/income test so he doesn’t care if we use our super.

          • Levathian on 20/04/2020 - 22:30
            +4

            @Jumpup: Actually (this probably sounds REALLY out of touch but I'm not sure how else to word it) but if people are getting $550 or $750/week from the govt (each), and they're not spending money on childcare (free), gyms (closed), eating out (closed), less on petrol (non essential travel banned), then how is it that suddenly rent and housing is something no one can afford? I can sympathise with people who have no access to govt support and things will be tight (people still have car rego, electricity etc. bills) but if people are getting so much support from the govt and other places why is rent still such a massive issue??

            • Jumpup on 20/04/2020 - 22:36
              +3

              @Levathian: I had the same thought.

              I work in credit assessment so I spend my whole day going through people’s payslips/government benefits and transactions.

              In this lock down I almost fell off my chair to see what people were still spending money on. Lots of take away and shopping like there is no tomorrow.

              • Levathian on 20/04/2020 - 22:50

                @Jumpup: Online shopping I assume?

                Like I understand if a family was making a combined say $120K/yr (both average wage) is suddenly reduced to $78K/yr (if both on job keeper) or $57K (both on jobseeker) things will be very tight and difficult eg. if rent is $450/wk ($23K/yr) there's a huge chunk gone already, and they have multiple cars and multiple kids to feed too.

                *all those figures are pre-tax

                • Jumpup on 20/04/2020 - 23:12

                  @Levathian: Not limited to online shopping. Lots of large multiple grocery transactions in a day, electrical, bbq shop and sports gear shops.
                  Take away lunch and dinner everyday (in store and delivery services).

                  With even 57k it’s possibly to still live ok just not the same life style as 120k a year. I could do a break down of average expenses but I do it all day and want to rest my brain haha.

                  If I ever get fired it will be because I spoke my thoughts .. “mate are you serious!! Did you need to spend that much in a week?!?”

                  I’m no Centrelink expert but I think they would get family benefit payments as well on top of job keeper/seeker.

                  • mun4 on 21/04/2020 - 11:17

                    @Jumpup: On the other hand, with social distancing measures in place, a middle income household can easily save $10k a year. No eating or drinking out, no cinemas, no overseas travel, less fuel usage, etc. This is exactly why we're not just on the brink of a recession but a depression could be imminent. Not only because some people can't afford to spend like they used to, but those who can afford the spending choose not to. Thus spending 30% of income on rent is obsolete now. It should be more around 40%.

  • [Deactivated] on 20/04/2020 - 23:58

    OP good on you!

    I'm very surprised at how much OzBargain loves landlords who have called for people to dip into their super to pay for their second, third or fourth house. This is exactly what people should be doing, looking at other places and just moving, maybe don't collect your stuff until you legally have to. People don't have as much money before, it's clear that rent should decrease but landlords refusing to budge, probably because they're up to their necks in debt but that's their fault. People are saying it's about the contract, look at shopping centres, there's no traffic anymore so business are earning no where near enough, like some businesses, they simply won't pay. If they close the store down, good luck finding a replacement. They will realise that some pay is better than no pay. It's just about whether they want to play this long winded game.

    People always forget that landlords have an option that the tenants don't, that is sell the house

    • Ughhh on 21/04/2020 - 00:54
      +3

      that is sell the house

      Funny how some people don't like being told how to use their money ie. Dipping into super or into their travel budget, but are OK with telling others what to do ie. Sell the house.

    • ozhunter on 21/04/2020 - 00:54
      +6

      I'm very surprised at how much OzBargain loves landlords who have called for people to dip into their super to pay for their second, third or fourth house.

      No, it's to pay for using someone else's house.

      • [Deactivated] on 21/04/2020 - 00:59

        Funny how some people don't like being told how to use their money ie. Dipping into super or into their travel budget, but are OK with telling others what to do ie. Sell the house

        I'm not telling what to do, I'm just saying it's a roof over someone's head vs someone's investment property. I know which side I'd be on.

        • ozhunter on 21/04/2020 - 08:10
          +1

          They're advising tenants on their options of how to pay their rent and be financial responsible. Whether you're tenant or owner, housing costs money.

        • Jumpup on 21/04/2020 - 08:13
          +5

          A few years ago my tenants refused to pay rent because they said I already have a house and they don’t.
          Not sure how you think that’s right. Roof or no roof that’s their life decisions they have made, why should landlords be a charity.

          • [Deactivated] on 21/04/2020 - 08:54
            -1

            @Jumpup: Look that's clearly wrong and I wouldn't even call it charity. But when millions have become unemployed and Australia on the verge of recession, I think a rent reduction is necessary and landlords instead of being so stubborn should negotiate. Look at OP's situation, once they threatened to leave, they offered a reduction immediately because that's the state of things. Landlords NEED tenants right now just as much as tenants needs landlords. I'm not asking for 'charity' but be reasonable and understand that your renting is a business and equally depends on the income of your tenants. Also, not to mention this house fixation landlords have out of pure greed have influenced the house prices in Australia, where plenty of people are forced to rent because they can't afford one since if you already have a house, getting someone to rent means they're paying for some of your mortgage so naturally you can afford to pay more. The fact that housing is, a basic necessity, is trying to be hoarded like toilet paper, is just wrong. They're forced to rent or borrow huge amounts because of this housing bubble created with the help of landlords. Look at how negative gearing increased multiple home ownership. Not only does it make Australia vunerable, less and less of the next generation won't be able to afford a house because the generation before them tried to buy it all up. Then what, you're just going to tell them no one forced them to rent? What are they supposed to do when they can't afford one? I'm not saying this is the case for everyone and there are people who choose to rent but this is a good chunk.

            • surm on 21/04/2020 - 09:20

              @[Deactivated]:

              The fact that housing is, a basic necessity, is trying to be hoarded like toilet paper, is just wrong.

              Unfortunately, this is the attitude of some tenants who blame it on the investment property owners. If investors didn't step in, most of these houses may not have been built in the first place. Most builders will not even start a build unless they have a buyer committed and finance ready.

              Almost all new properties; expenses are more than the rental income. So, how can tenants afford that higher mortgage premiums if they cannot afford the lower rent? Investment property owners are the ones who keep the affordable rental housing market going. Otherwise, there will not be adequate supply of rental houses driving the rentals up.

              Suppose OP, the tenant, had in fact bought his apartment on a mortgage (instead of renting). Will the bank then reduce his loan because OP lost some of his income and there is pandemic?

              • [Deactivated] on 21/04/2020 - 09:39
                +1

                @surm:

                Unfortunately, this is the attitude of some tenants who blame it on the investment property owners. If investors didn't step in, most of these houses may not have been built in the first place. Most builders will not even start a build unless they have a buyer committed and finance ready.

                People were building houses far before this housing bubble started. Why is home ownership decreasing then if it isn't for rising house prices?

                Almost all new properties; expenses are more than the rental income.

                Because property prices have gone up. How much are people who bought houses 10 years ago paying? You can't use the effect as justification. We have the second highest debt to income ratio in the world. Are you saying if it wasn't for investors and people rushing in to the market, it would be like what, 20x? I'm not being sarcastic either.

                Suppose OP, the tenant, had in fact bought his apartment on a mortgage (instead of renting). Will the bank then reduce his loan because OP lost some of his income and there is pandemic?

                No I suppose you're right but some banks are offering deferral or one time payments. Which is still better than nothing. And if they can afford it by living very very frugally, it's to buy their own house, not paying for someone else's.

                Again, I admit I could be media biased but I remember reading an article where an expert said something along the lines of 'if you're buying multiple properties to profit, you're doing so at the expense of the next generation'. I'm not talking about investors that buy a house, renovate it and sell it for a profit or investors who buy a large block, build houses and sell them after for a profit but those who buy houses and hold onto them for a 'portfolio' because they believe it will increase indefinitely. People who don't plan to sell until like 50 years down the track or not at all.

                • surm on 21/04/2020 - 10:00

                  @[Deactivated]:

                  Because property prices have gone up.

                  Property prices did not go up simply because of investors. These additional properties would not even have been built in the first place if investors did not show up. There is a cost to build a house which depends on our labour market conditions and higher wages. If buyers can't afford this cost, the builders cannot build houses.

                  Why is home ownership decreasing then if it isn't for rising house prices?

                  There are many reasons. There are many choices for people to spend money these days, so they rent and then spend money on other luxuries and conveniences rather than saving for a mortgage. That's a choice they make.

                  No I suppose you're right but some banks are offering deferral or one time payments.

                  Landlords can offer this deal to the tenants; ie defer a portion of rents. But tenants don't want that option :-) Tenants want a reduction without paying it back later :-)

                  And if they can afford it by living very very frugally, it's to buy their own house, not paying for someone else's.

                  I am not sure what you are getting at; but if you think "rent payment is dead money, mortgage is not"; then that is a gross misconception. If the rent paid by the tenant is "dead money" because it doesn't contribute towards owning a property, so are the interest and other maintenance and rates and fees that the landlord has to pay, which also do not contribute towards the property ownership. The landlord makes an additional payment to pay off the principle on a PI loan. Everything else is dead money from the landlord's point of view. If the tenant buys the property they are renting, they will be paying more "dead money" than they are now.

                  • [Deactivated] on 21/04/2020 - 11:16
                    +1

                    @surm:

                    These additional properties would not even have been built in the first place if investors did not show up. There is a cost to build a house which depends on our labour market conditions and higher wages. If buyers can't afford this cost, the builders cannot build houses

                    You can build houses for 200k yet they can sell for way more. I understand what you mean, but if an investor buys houses with no intention of selling only for it to increase, then I don't think this really changes how many homes are built by much. There are areas around my house where you can buy a home and land package, they will have already made a profit by building and selling it to a first home owner at say, 20% markup. An investor however can pay more for it forcing some people to rent. The difference between what it was built at and what the secondary investor hopes to sell it at, doesn't reflect the cost of building it.

                    There are many reasons. There are many choices for people to spend money these days, so they rent and then spend money on other luxuries and conveniences rather than saving for a mortgage. That's a choice they make

                    You could be right but I think by the time people try and save, the prices go up even more. There are people who are saving as much as they can but still can't afford it or forced to borrow far more than they should

                    Landlords can offer this deal to the tenants; ie defer a portion of rents. But tenants don't want that option :-) Tenants want a reduction without paying it back later :-)

                    Good point, but I still feel like there's a fundamental difference. Banks just lend money, what the people do with that money and how the market plays out is for the borrow to take the risk. The renter is just a consumer and looking at OP's situation, the landlord could've offered a 30% reduction from the start but he was stubborn and now the OP has moved out. Look at shopping centres for example, no one's going to rent in this situation unless there's some discount because they can't make the money to pay it. People have lost jobs, they don't make as much money anymore. That's why I applaud OP for moving out, he did the right thing, he showed exactly where the market is right now. The LL would rather offer a 30% reduction than lose the tenant. It's not charity I'm appealing to at all.

                    If the tenant buys the property they are renting, they will be paying more "dead money" than they are now.

                    If the tenant buys the property they will own the property by the time they pay it off? I agree with you it's not 'dead money' though.

                    • surm on 21/04/2020 - 13:42

                      @[Deactivated]:

                      You can build houses for 200k yet they can sell for way more.

                      That is simply not true. If houses can be built for $200k, then, sure, people who have more money will get the first dip. Yet, more and more builders will build more and more houses for $200K because there is a demand and eventually the price will come down to the level so that the builders can pay the wages and still keep a profit.

                      OP currently pays $2100 in rent. Instead of renting, he has the option of buying a house/apartment that comes with a $2,100 mortgage premium. Why doesn't he do that?

                      Many tenants do not want to do that because they are not prepared to sacrifice the luxuries and conveniences. For example, they may have a longer commute from that $2100 mortgage house/apartment or they more not like the neighbourhood or they may treasure living in the city location which is closer to work, gym and pubs. Landlords became landlords because they made these sacrifices. If tenants are not prepared to do the same sacrifices and find a house or apartment with a mortgage that is similar to their rent and that they can afford, then don't blame the landlords.

                    • surm on 21/04/2020 - 13:51

                      @[Deactivated]:

                      Landlords can offer this deal to the tenants; ie defer a portion of rents. But tenants don't want that option :-) Tenants want a reduction without paying it back later :-)

                      Good point, but I still feel like there's a fundamental difference. Banks just lend money, what the people do with that money and how the market plays out is for the borrow to take the risk. The renter is just a consumer

                      If you agree that the landlords must take the risks themselves and cannot "share the pain with tenants", why are landlords required to share tenant's pain? :-)

                      and looking at OP's situation, the landlord could've offered a 30% reduction from the start but he was stubborn and now the OP has moved out.

                      There is nothing wrong with what happened. Those are market corrections and landlords accept those risks. It can happen anytime. That is how rent prices adjust. When the economy booms, people offer more for rent and rent prices go up. And the opposite happens in economic downturns. Demand and supply decides the rent prices.

Login or Join to leave a comment
Login Join