My secret for pandemic proof rental incomes

I have five rental properties, all of which were positive geared at time of purchase.

Buying positive geared properties leads to a certain type of property:

– High yield

– Below median purchase prices

This property type attracts tenants who are on some form of government support. All of my tenants are on some mix of:

– Aged pension

– New Start (Job Seeker)

– Disability pension

– Parental payment

– Service pension (Defence force)

Many books and commentators will advise to rent to tenants who have reliable incomes, good jobs etc. In my experience renting to tenants for over 18 years who receive government support, they have had the most reliable incomes of all. In the event that they lose their ‘wage earning’ income, their government support increases, so they have never been unable to pay rent (I have been flexible on occasion, waiting up to 3 weeks for government support to kick in before the tenant pays rent).

In 2020 when the COVID-19 pandemic hit, many landlords entered agreements to defer or reduce rental payments to keep tenants experiencing hardship housed (a response that I think is fantastic and wholeheartedly support). These measures have not been necessary for my portfolio as yet (Aug 2020).

So what’s my secret to pandemic proof rental income? Be a landlord with compassion, I rent to individuals who many people would perceive as risky, lazy or ‘too much trouble’. With no exception they have all been fantastic tenants, highly motivated and extremely thankful to have security of tenure and well maintained rentals.

My portfolio is not one which is likely to have amazing capital gains, but it does provide me with reliable income that enables me to work part-time and follow my goals and hobbies, but this is only possible if the rentals have reliable incomes.

Happy investing.