Mary’s in her early seventies and widowed.

She owns the house she and her husband bought just after their first child was born plus one investment property they bought about twenty years ago. She has a tiny bit in super but certainly not enough to live on.

However, she’s not entitled to a pension either because of the value of the investment property. Therefore, she relies soley on the rental income from the property to live on.

Not surprisngly, Mary’s hasn’t had much sleep recently.

COVID-19 has rendered millions of people worldwide unemployed and now there’s pressure on residential landlords to cut tenants some slack and reduce or freeze their rents.

But why should landlords saddle all the costs and give tenants a free ride?

I’ll tell you why.

Because there’s this coloured perception that all landlords are filthy rich, they own at least a dozen houses and all their properties are unencumbered of debt, rates, land tax, strata, repairs, maintenance, insurance, management fees, and legal costs.

Oh, I forgot. There’s also this belief that all tenants are perfect; that they pay their rent on time and never trash the joint!

Yet, nothing could be further from the truth. Here’s the reality.
I. 80% of landlords own one investment property
II. That same 80% of landlords earn the national average wage, circa $84k pa. Most of them are trades people, teachers, police officers, nurses and small business owners.
III. Most investment properties are heavily encumbered with debt and are cashflow negative
IV. Those properties that aren’t encumbered, usually provide rental income for retired folk who are not entitled to a Centrelink pension. i.e. they are self-funding.

But here’s the most important truth of all…

Landlords carry all the risk with regards to a property, not the tenants.

Property investors aren’t just investors, they’re also business owners. Meaning, they have to finance, operate and market their asset(s) just like every other business.

And let’s not forget, twelve months ago, Bill Shorten and Chris Bowen wanted to junk negative gearing along with franking credits. Can you imagine the mess we’d be in by now?

Rents would be through the roof, scores of investors and developers would be on the brink, and the property market would have tanked just like the stock market recently.

Landlords are to housing, what private schools are to education. They relieve the government of massive cost and management pressures plus save taxpayers squillions in liabilities.

Yes, there’s some greedy, deadbeat landlords out there, but there’s also plenty of tenants to match as well.

But here’s the good news. There’s an even larger cohort of very decent, empathetic landlords constantly looking for tenants who will treat their assets like its their own. Equally, there’s plenty of great tenants looking for their perfect suitor (landlords).

And Mary’s a very good example of what I’m talking about.

The government can’t expect landlords like her to take a ‘haircut’ on their income, or worse, have it frozen, just for the sake of her tenants. She has bills to pay as well.

Equally, tenants who’ve lost their jobs obviously can’t pay their rent, so…

What’s the answer?

I think it’s pretty simple.

If the government can offer $750 per week as a minimum wage for those who have lost their jobs, the same should be offered to landlords per residential property, especially if a ‘no-eviction’ clause stands.

Remember, the landlord is the one carrying all the risk, not the tenant.

And if a landlord receives more from the government than they usually do from their tenant(s), then they just pay it back in their tax return.

And if a landlord receives government assistance but their tenant doesn’t, they must refund everything back in their tax return as well.

It wouldn’t be dead money either because most of it would be fed straight back into the economy to continue the flow if income.

I think this is the only fair and just way of handling the situation.

I mean, if we live in an era where we expect pay equity, gender equality, and same sex marriage, then the same equality must apply to both tenants and landlords alike, especially in unprecedented times like this.

Further, if we can also fork out billions of dollars every year in foreign aid and be world champions of immigration (and I’m not suggesting we shouldn’t), then now more than ever is the time when we should be looking after our own, both tenants and landlords.

COVID-19 doesn’t discriminate, and the goverment shouldn’t either. They cannot prevaricate the issue any longer.

Mary’s already lost her husband. She shouldn’t be at risk of losing her rental income as well.

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