How this 32-year-old built a $2.5m property portfolio
Being a first-generation migrant who saw his parents work hard for everything they had, this property investor used it a...
Two real estate experts have sounded the alarm on “opportunistic” tenants who are unfairly taking advantage of the government’s rent relief measures.
Speaking on the recently launched What’s Making Headlines podcast, which was conducted via Facebook LIVE last Thursday, real estate experts Tom Panos and Phil Tarrant discussed how rental relief measures introduced by the state governments recently may not be being used as they were intended.
“This has been the biggest issue in real estate at the moment. The NSW state government announced $220 million [for residential landlords] on the long weekend, allocated if a tenant was able to show that they had suffered more than 25 per cent distress to their income,” Mr Panos said.
“I know that there’s a strong feeling that this could be opportunistic, with some taking advantage of it. Even today, I was talking to someone who said they were very disappointed with a friend of theirs who said his income only got reduced by 10 per cent — he was a tenant — and he pretty much contacted the office and he tried to get a 60 per cent saving off his rent.”
Mr Tarrant concurred, noting that he, too, knows about some tenants who are capitalising on the new measures dishonestly.
“The intent of the government is to try and keep jobs intact as much as possible and making sure that not too many Australians are put into unnecessary financial stress,” Mr Tarrant said.
“Now, I get the sentiment about giving people a break if they’ve lost their income. I’m a landlord and have a considerable portfolio, I hear these same stories. The person in the block that I live in who negotiated a 50 per cent reduction in their rent moved back at home with their parents and charged or sub-let that same apartment out to backpackers who couldn’t get back to England for the full freight plus a bit of a margin, so capitalising on other people’s misfortune.
“I think about that poor landlord. It takes away from the people who are wanting to give the breaks to the people that are struggling right now, and I get it. I’m getting the calls coming in now from my landlords around what’s happening with rent reduction and I’ll give it where it’s due, but if you look at any of the documentation, any of the recommendations and any of the requirements coming out of the government, they’re saying, ‘This doesn’t necessarily mean that that debt goes away, it’s still got to sit on your ledger and you’re going to have to pay at some point’.
“My personal view as a landlord, but also as someone who employs a whole bunch of people, the JobKeeper allowance is there to support people meet their requirements.”
Adding to this, Mr Panos advised listeners not to take advantage of the system.
He said: “I get a lot of tenants who have got strong opinions and they make some outlandish comments, saying, ‘You guys are training agents to exploit tenants’. It’s actually the opposite. What we want to do and I think the government wants to do is find out who’s really suffering and help them, and who’s trying to manipulate the system.
“I think one of the things Scott Morrison said that was good is he said, ‘There is no losses, we’re all Australians in this’ — so everyone’s sort of chipping in. So, what does that mean?
“If you’re a tenant and life is good for you, don’t go off and create havoc. If you’re a tenant who’s got genuine problems, it’s simple — go and get your forms printed, get a letter from your employer, go to your agent and say, ‘Here it is. Here’s my situation. I’m not bullshitting’.
“I think you’re going to find landlords want to work with those people. The rental market’s not great, they don’t want their tenants to go, they’d rather work with them.”
During the discussion, Mr Panos and Mr Tarrant also provided insight into the current state of play for property investors in the Australian real estate market.
A landlord, also known as a lessor, refers to an individual that owns a leased property.
Rent refers to the payment made by a tenant periodically to a landlord for the use and occupancy of a property.