2020 has posed many challenges for all of us, but for owners of private rentals in the Northern Beaches, the COVID-19 pandemic has brought particular concerns.
So, what is happening to Northern Beaches and Sydney property to rent? And, if you are a landlord, what can you do to mitigate the effects of the pandemic and protect your investment?
How is the rentals market being affected by COVID?
Research by the Australian Bureau of Statistics shows that in March this year, the median rental asking price on a house in Sydney fell by almost -2.0 per cent in comparison with the previous year.
This fall is due to two significant factors that have affected the rental market since the pandemic: jobs and migration. With so much job uncertainty, particularly in the tourism and hospitality industries, young renters have chosen to move back in with their families. In addition, travel restrictions are preventing migrant workers from coming to Sydney, so they don’t need rental properties.
As it is mainly younger renters being affected, this is having an impact on landlords with smaller properties such as granny flats for rent in the Northern Beaches. We can see this by looking at advertisements for Northern Beaches rentals on Facebook and Gumtree. As nobody is travelling for holidays, it is also affecting owners of Northern Beaches holiday rentals.
However, it isn’t all bad news – those with larger properties occupied long-term by families have largely been unaffected.
What to do if you own a Northern Beaches rental property
Landlords who own rental properties, particularly short-term rentals in the Northern Beaches, do have a number of options:
1. Talk to your tenant
If your tenants are struggling to pay their rent, they may be eligible for help from the government. Talk to them about Rent Assistance, and encourage them to find out whether or not they can claim any support.
2. Talk to your mortgage lender
Your mortgage lender might be able to help you if your rental payments have fallen due to COVID. Your options include the following:
- Negotiate a lower interest rate.
- Switch to interest-only payments.
- Take a mortgage holiday.
Your lender will be able to advise you further on all these options.
3. Talk to your real estate agent
If your tenant cannot pay the rent even if they receive government assistance, you have several options:
- Allow your tenant to break their lease and have your real estate agent find you a new tenant. However, in the current climate, it might be difficult to find a new tenant who can pay the same amount of rent.
- Offer the tenant a rental abatement. This means they have a rent-free period, and they then have to pay back the lost rent when this period ends. This does have legal implications for both of you.
- Reduce the rent for a specified period. After this period, the rent returns to the normal amount. This means you agree to take a permanent loss for a few months, but it can be worth it to keep your tenant in the current climate.
Our rental management promise
During the pandemic, we have been making life easier for landlords and tenants in the Northern Beaches. We have constantly been checking in with the tenants of the rental properties we manage, keeping landlords informed and staying up-to-date with legislative changes.
These are difficult times, but with the right support, you can get through. If you would like more help and advice about protecting your investment during COVID or having a rental property managed for you, please reach out. We are always happy to help.
THINKING OF SELLING YOUR PROPERTY?
LIVE ON THE NORTHERN BEACHES?
Read our report on how to have a successful home sale, even within these unusual times of COVID-19.