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Level 4: Socialise reliefs, privatise solutions

Wednesday, March 25, 2020

Jeff Bezos said earlier this week that there is 'no instruction manual for how to feel at a time like this' and he is exactly right. There is still a lot to learn and unpack about Covid-19, Level 4 and what all of this means to each and every single one of us. So, for the time being, give yourself a pass to feel what you feel. We are not here to tell you what is normal. What we are here to do is to make sure that our members get accurate information and good support to get through these tough times.

In the last two days, we have been inundated with questions many of them about cash-flow. More and more landlords are getting tenants requesting/pleading for/demanding a rent reduction/deferment. Some landlords' main incomes are impacted by Covid-19 to such an extent that they do not know if they can hold onto their rentals much longer.

Before we get into all of that, first things first, breathe. Level 4 means no one is going anywhere. The good news is you now have the space to think things through and plan things out and you should.

Second, we recommend, as a general rule of thumb for landlords and tenants to socialise reliefs and privatise solutions. By that, we mean before we speak to one another (landlords to tenants and vice versa), shore up your personal position first by exploring all of the relief packages available to you. Landlords and tenants are going to have to help each other to get through these tough times and none of us can be of service to others until we (pardon the french) sort our own sh*t out. Once you are on firmer footing, privatise a solution forward i.e., talk to your landlord/tenant about your immediate challenges and concerns (for example, everyone will have to adjust their expectations for repairs and maintenance, landlords will want to have the assurance that the property is being looked after and tenants may have to be inconvenienced to give that assurance). At least for the time being, landlords and tenants are intricately connected to each other in a way none of us had expected to before. Be kind, remember that the person at the other end of the email/phone call is a human being with human emotions and having a human experience through Level 4. Obviously, hit the nuclear button if they turn out to be really bad actors. But, at the end of the day, most of us are good and just trying to get through these tough times. 

Some commonsense tips for landlords: 

  • We don't think it is unreasonable for landlords to see some sort of proof of loss of income or have some kind of understanding that the tenant is financially impacted by Covid-19. Not everyone has taken or will be taking an income hit because of Covid-19. 
  • Tenancy Services has just realised operational details for freezing rent increases and banning termination. Read them here.
  • Pre-mortem, pre-mortem, pre-mortem. For example, talk to your broker/bank now. Find out what relief options are open to you even if you don't need any support right now. The government announced a financial support package for mortgage holders and business owners yesterday (24th March), there will be more information to come so keep an eye on that. Talk to your tenants, especially if you know they work in industries that are going to get hit badly by Level 4. Get them to front foot any cashflow issues will make the entire process easier to manage. 
  • Stop reading those headlines. There will come a day when life gets back to normal. When that day comes, the quality of your life and the prospect of your financial future will be determined by the type of people you lean on for information and support now. There are many APIA members who have survived and thrived after the GFC and SARS. Their perspectives are valuable and they are ready to share. If you are feeling rudderless and disconnected, now is the time to join your local Property Investors' Association. The wealth of knowledge, depth of information, the friendship, the support are simply too valuable to pass up. 
  • Follow the professionals. The REINZ has issued its guidelines for real estate professionals to follow during L4. We expect the Property Law Section of the Law Society to do so shortly. While many reading this would not belong to either group, their guidelines could still be instructive/useful. 
  • Stay home. Many landlords have asked about carrying out repairs and maintenance at empty properties during L4. Not only are none of those work essential, but we should also think more broadly than how not to be inconvenienced by L4. The fact remains, the sooner we flatten the infection curve by staying away from each other, the less of a hit the economy takes and the sooner it bounces back. Leaving home now for non-essential reasons is exposing everyone to more risk and stressing the economy. Don't do that. 
From the 26th of March onwards, we will be hosting almost daily Hangout sessions to help our members through Level 4. Each session is themed and has a content + check-in component. Remember, it is super important during these times for you to get the right information and have a balanced perspective. You can register for any Hangout sessions here.

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Mathieu Holt- Managing Director, The Tenancy Practice Service & TPS Credit Control
Through the Association I found the channels and methods to fund the purchase of property I never dreamed about. Grant Brown

All round it has been one of those things Neil and I felt was really worthwhile belonging to. We have learned so much it has just built our confidence in what we are doing.

Janice Bieleski
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Fantastic organisation. The networking opportunities are brilliant and provide us with information and opportunities that cannot be obtained anywhere else. We learn something new at every meeting and we've been in this game for nearly 20 years. Pauline and Gyanen Kumar

I find the information obtained from various APIA meetings very useful in guiding my own property investment and rental management.  I also enjoy the networking opportunities with like-minded investors.  I am inspired by other investors’ success and find the more experiences and knowledge that I share with others, the more confident I become.  

Thanks to all APIA event organizers and administrators for your brilliant work. 

Stella Shao

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Stephen Weatherall

My APIA membership has become a total success.

Every time I attend a monthly or regional meeting I come away with so many useful and positive tips that have added value to my property investments and management.

Not only that, the website is a great place for practical advice and useful information. It has now evolved into an important resource for my business.

Talk about value for money! The discounts I have been getting at Bunnings when I present my APIA membership card have more than paid for my annual subscription!

Tim Duffett, Plan A Investments Limited