In this episode, we discuss how to decrease your tenants' rent during the Coronavirus shut down the right way.
Some New Zealanders are doing it tough at the moment, struggling to get by. As landlords, that may include some of our tenants. That means that there is more risk that our tenants won't make their rental payments.
That's concerning because property investors still have mortgages and other rental property expenses to pay.
So what is the best way to manage this.
Best practice suggests that property managers and self-managing landlords should reach out to their tenants early to talk about the tenant's financial position and whether they are struggling.
If they are struggling, then it is best to point the tenant towards the government subsidies that are currently available. After they have sought help, you can ascertain what the tenant is still able to pay.
You can then come to an agreement stating that you will carry forward the difference between the rent and what the tenant can afford to pay as a debt.
You should document this as a written agreement.
Once the shutdown has ended the tenant can then pay you back by a small amount each week e.g. $50.
But, be sure that the amount owed to you does not creep higher than the bond you have taken initially from the tenant. Otherwise, if the tenant leaves early it may be difficult to recoup the funds owed to you.
