Working through COVID-19

It’s been two and a half weeks since this pandemic was announced, and a lot has happened in two and a half weeks. A lot of turmoil, a lot of upset, a lot of announcements and a lot of change.

Who knew we’d be thrust into the various situations we find ourselves in?

And who knew how adaptable and how incredibly kind we’d become?

We wake up to news from overseas, and invariably the headline items are reminding us of the increasing affected persons, the death toll in other countries and the announcements from our Prime Minister and Treasurer that will be impacting us, both positively and negatively.

Freezes on business activity for many, limitations to those businesses that are still operating and stern warnings to beach revellers who stupidly shun the strict recommendations on a warm day, (and instead party on the sand together) are just some of the messages we are receiving.

But it’s the positive stories that are lightning our load and giving us a little bit more hope that we will get through this OK.

Yesterday, (30 March) our PM and Treasurer announced a $130B wage subsidy offer for small business employees. While the timeframe until the relief arrives could be months for some businesses, the mere fact that we can all see an opportunity to retain staff eases a considerable emotional strain for so many of us.

In small business, our employees are often like family. They are our work-family.

After the moratorium on rental evictions hit the news a day prior to the $130B small business assistance announcement, a lot of investors are justifiably nervous and seeking solutions in an effort to be prepared in the event that a tenant’s unemployment burden is passed down the chain to them.

As this article points out, many investors are everyday people; families, couples and singles. Property investing is not just an activity for the wealthy, and the flow-on effect of any loss of rent will be a resounding blow for most investors.

We are yet to see our Government’s response and solution to this, but in the meantime many landlords need to consider how their conversation will go with their Property Manager, and how they could workshop possible eases to their negative cashflows in an attempt to show support to their tenants and balance a precarious situation.

Landlords can justifiably ask their Property Manager to discuss the following points with tenants in distress to workshop a short-term arrangement that can work as optimally as possible for both parties;

• When does their hardship start? (some will have redundancy packages, leave packages, etc)
• How long could their unemployment last for?
• What are they doing about rental assistance? https://www.servicesaustralia.gov.au/individuals/services/centrelink/rent-assistance
• What weekly rental figure COULD they manage during their time of hardship?

And landlords who find themselves in a situation where their tenants have sustained job losses and cannot pay their usual rental payments may have options to discuss with their broker/banker before reaching out for repayment holidays. Solutions such as interest-only, refinancing, accessing redraw/offset and others do exist for some.

Late last week I chatted to a great industry friend and amazing mortgage broker, Tim Boyle. We discussed some of these ideas amongst our take on this quickly changing/adapting landscape and how it has been impacting our respective industries.

You’ll all notice Tim has a Kiwi accent. He’s from the South Island and it’s fair to say that some very special people in my life are New Zealanders.

As our very own Shannon said to me today, “Kia Kaha”.

I asked, “What does that mean, Shan?“

It means stay strong.

A pic of us in happy non-social distancing times at Amy’s wedding. We will have these happy times together again. Until then, we still have each other and we have zoom. 🙂