A generous mum is considering renting out her studio apartment free of charge to help a struggling tenant as inflation skyrockets.
The property, located two hours away, from Sydney is usually leased out as holiday accommodation, but the mum claims it ‘doesn’t book out much’ during the off-peak season.
Rather than finding a tenant through traditional methods, the woman is eager to help someone in need – helping them save money for six months by not charging any rent.
However, others warned it could be a ‘bad idea’ and a strict agreement would be necessary.
At the moment in Australia, mortgage repayments and rent have drastically increased due to interest rate hikes.
In addition to this, the price of necessities such as groceries, petrol and alcohol has also increased, stretching household budgets further.
A mum is considering renting out her studio apartment that’s usually leased out for holiday accommodation (stock image)
‘This is a weird one. Strap in! I have a small studio apartment that I lease as holiday accommodation about two hours from Sydney,’ she wrote anonymously.
‘For six months of the year it doesn’t book out much. I would love for someone to be able to live in it for six months, rent free or very low rent, to help them save some money and get a bit ahead in this horrific financial climate.
‘Being a capitalist fat-cat doesn’t sit well with me, but I also need to weigh that up against setting my kids and family up for the future, which means using it in peak season for holiday rentals.
‘Is this a possibility? How do I find a person? Do I need a lease or rental agreement? What’s the insurance situation?’
While many were amazed by the mum’s ‘selfless’ and ‘thoughtful’ idea, most urged her to proceed with caution as it may be difficult asking the tenant to leave afterwards.
‘The issue is at the end of the lease period can you guarantee that your tenant could find another property to vacate?’ one woman asked.
‘I’d be very cautious about this. Sorry but once someone is in, it might be extremely difficult to get them out for that peak season. The laws are all for tenants NOT landlords. I wouldn’t do this,’ another warned.
A third suggested: ‘Could you look at the local women’s services agency? Perhaps you could provide housing through them so they help manage the property and the tenants, you just provide the accommodation?’
‘Not sure how feasible that is but how awesome if it could be done, helping women in urgent need of housing.’
‘I would rent it to someone with the promise of returning the rent to them on vacation in an acceptable condition,’ another added.
‘What an amazing idea, I’m just concerned your generosity will be taken advantage of. I would definitely have a contract in place,’ one mum wrote.
One woman was quite firm with her response.
‘Absolutely not. I’m sorry to say. Sounds like you have a big heart but I promise you that in the world of tenants kindness gets taken for weakness and you’ll have even less legal standing if something goes wrong,’ she wrote.
However, others warned it could be a ‘bad idea’ and a strict agreement would be necessary. At the moment in Australia, mortgage repayments and rent has drastically increased over the last 11 months due to interest rate hikes (stock image)
On Tuesday the Reserve Bank of Australia hiked interest rates by another 25 basis points – marking the 12th increase in little more than a year, blaming a big boost in award wages for fuelling inflation.
The cash rate has now risen to an 11-year high of 4.1 per cent and will add $97 to monthly repayments on a typical $600,000 mortgage.
The 12th rate rise since May 2022 is the most rapid successive increase since 1989, and borrowers can expect yet more pain in coming months, with loan repayments surging by 62 per cent in just 13 months.
Reserve Bank Governor Philip Lowe said the rises must continue because inflation was still too high, and noted that big award wage rises coming into effect next month will only make that worse.
‘Inflation in Australia has passed its peak, but at 7 per cent is still too high and it will be some time yet before it is back in the target range,’ he said in a statement on Tuesday.
The Reserve Bank of Australia hiked interest rates by another 25 basis points on Tuesday – marking the 12th increase in little more than a year