Let’s face it, in a turbulent nation-wide cost of living crisis that’s pushing many Sydney renters (and homeowners) to the brink, there’s a whole lot of factors that could be impacting your tenant’s ability to pay their rent.
Though the narrative has been rather poorly painted for tenants (I didn’t know my rent was due… my car broke down… the money is in the mail…), this is a pretty unrealistic picture of the (very) human reasons that could cause anyone to land in arrears; genuine grounds could be a sudden loss of employment, a family tragedy, an unexpected large bill, or even a health emergency.
Of course, while the justification may be serious financial difficulty, any of these reasons can lead to an equal struggle for landlords who need to make mortgage repayments in the meantime.
So if one of these unfortunate set of circumstances falls on your tenant and on you, what’s your best option?
In every situation, the best outcome for landlords comes from having a strong relationship between your property manager and your tenant. An experienced PM will be able to accurately distinguish the ‘out-of-character’ missed rent payments from the common excuse by simply knowing your tenant well, and can therefore determine what action to take.
Temporary loss of rent
In scenarios of temporary rent arrears due to financial difficulty, it makes better sense for landlords to have flexibility around rent payments – as the cost of finding another tenant may quickly outweigh a few weeks’ without rent (or having your property sit vacant altogether).
This flexibility may look like coming to an agreement through your PM on a date for regular rent to resume, a payment plan to make up arrears, or being open to another person moving in to share the rent.
Permanent loss of rent
In the unfortunate scenario that your tenant is experiencing a permanent inability to pay their rent, it’s equally important to exercise empathy and an open line of communication. Only if you have first attempted to work things out through the guidance of your PM, should the next step be to make preparations for your tenant to vacate.
Depending on the reason and degree of rent arrears, it may also be worth looking into your landlord insurance policy at this point, to see what you’re covered for.
Ultimately, the reasons are many as to why your tenant may suddenly not be able to pay rent. Disputes are in no one’s best interests – which is why it’s vital to start with understanding, if you’re looking to maximise the outcome for yourself and the individual or family occupying your property.
Prudential Real Estate Macquarie Fields | (02) 9605 5333 | macquariefields@prudential.com.au
Prudential Real Estate Narellan | (02) 4624 4400 | narellan@prudential.com.au
