PODCAST Real Estate

EP2 4510TV Podcast Looking at the Real Estate Rental Market

Listen to the PODCAST

Read the Looking at the Real Estate Rental Market Podcast TRANSCRIPT

Scott Lachmund: Hi Scott Lachmund, 4510 TV podcast series for our second episode. If you tuned into the first episode, thank you very much. We appreciate you jumping on board. The first episode we had a bit of a general real estate update with Robin Lachmund and some economic forecasting and some financial commentary from Peter Lachmund, both from Richardson & Wrench Real Estate, Caboolture. For our listeners, yes, I’m Scott that you normally see on video, but today episode two of our podcasts series. So I’m giving it a go and I hope you can join us on this journey for some future episodes. So today, sticking to the real estate theme to get this up and running and still testing out equipment and getting into the groove of recording podcasts, with me today I have Karen George, property management director of Richardson & Wrench Real Estate at Caboolture. Good morning, Karen.

Karen George: Good morning, Scott. Hi everyone.

Scott Lachmund: Hi everyone. It’s like radio land so they can’t see that you’re sitting here in your active wear at the office. No, she’s not really, she’s dressed up and she’s in uniform, but we don’t need to be nervous about the camera, we’re purely talking radio land. So for our listeners on the podcast series, I just wanted to give a update similar to we’re talking to Robin, let’s talk about the real estate rental space happening around the Caboolture region. Kick us off with what’s the latest around town with property management?

Karen George: What’s the latest? So our office is an established office so it’s probably a little bit different because we’ve been involved in property management and rentals for a very long time. So we’ve seen ebbs and flows in relation to the market. And how things are going now, I would say, is very, very stable, very secure from investment point of view, but also really secure from a tenant point of view as well, that there are properties out there. If something happens and the property you’re in is sold, you are able to find another property that would be of similar quality, similar value within the same area. Rather than coming out of somewhere where you’ve lived for two or three years, and all of a sudden properties are $10-$20 extra. They’re not. It’s very stable.

Scott Lachmund: So there’s stability in the affordability of a tenant renting.

Karen George: And the availability of something. There is always a new property coming onto the market. There are new investors still in the area, that if you did require a property for rent and you’re looking over a couple of weeks time period, you’ll find something that really suits you from a tenant point of view, for something in this similar area.

Scott Lachmund: Okay, so good to know. If I was a tenant out there listening and my budget was 320 per week rent, there’s a chance that if I secured a rental property now, chances are that that rental amount isn’t going to change in the near future.

Karen George: That’s right. And that’s really important for people that are budgeting sometimes week to week. A lot of people that rent are in a position where they haven’t been able to get into the buying their own property yet, but it’s still really important for them to feel like the property is their home, it’s well looked after and maintained by the owner, but they can put their personal touch to it and make it feel like a home for them to hopefully stay as longterm as possible without a lot of changing costing each week. And where they’re living and what’s happening around them.

Scott Lachmund: So is that transformed to the length of leases? Traditionally there might only be a six month lease in place. Are you seeing more 12 month leases secured?

Karen George: Definitely. A lot of people still take six month lease to start. Make sure that, what the streets are like, see what their neighbours are like, see what the community’s like around them, how the schools going, the shops, everything. They still gauge that. And then within six months and they feel settled, they then go, “Great, I want to stay here for another couple of years and this is going to be my family space and we now want to tie in for 12 months.”

Scott Lachmund: Yep. You talk about new investors coming into the market. Are you seeing that as a property management director there’s, obviously there’s always been the demand for rental accommodation, but with new investors coming to the area, is this how you portray it? Is this how you explain to them that there’s that real stability that if they’re buying an investment property, they’re going to have next to no vacancy, they’re going to have a good secure tenant for a longer term now?

Karen George: Definitely. So it’s affordability and also the quality. So by having a stable rent roll like our office has, we can easily… not easily. We can talk to an owner and feel pretty confident that we can secure the right kind of person in the right kind of property that is going to be able to afford it and maintain it. And so an investor wants that security, but a tenant, we want that from a tenant as well.

Scott Lachmund: Let’s talk about some updates happening in the real estate property management space, the rental space. There’s an update of some changes with the Residential Tenancies Authority-

Karen George: There is.

Scott Lachmund: -with processing things.

Karen George: So the Residential Tenancies Authority have a really big involvement in rentals in Queensland. One part that a lot of tenants would know about is they hold your bond money. So remember when you pay a bond as a tenant, it doesn’t go to the real estate agent. The real estate agent receipts it and sends it to the bond board and it’s held safely there by signatures from the tenants and the agent. So they hold that money. There are other rollies to educate and communicate the agents and tenants on the Residential Tenancies Act, which is the rules that we all live by.
With the RTA, what they’re doing is modernising and going from paper form to internet form, which is a lot of changes in the paperwork on lodging bonds and refunding bonds. When a tenant vacates a property and they’ve done the right thing and they’ve had the carpets and the pest control and done all the cleaning, they really want to access their bond as quickly as possible when they’re finished and I think the RTA are moving forward to make that more streamline: internet, banking, direct debit it straight through to your BSB instead of sending old fashioned checks or anything like that. They want to get that bond money back to people cause they’ve probably moved on to another property and need those monies.

Scott Lachmund: Just on that topic, I’d imagine some of our listeners, and those listening, we appreciate it, as this is our second episode of 4510 TV podcasting. So for the listeners, thank you. But just on that point of bonds getting refunded, I’d imagine the biggest hurdle at the moment is, if I was a tenant and I needed to relocate, how do I come up with a new bond for a new place plus a new rent while still juggling vacating the other place, waiting for a bond refund? What do I do?

Karen George: It’s extremely difficult. Reality is that you do need to lend the money. A lot of families go to family members, they go to a credit card, they go to a personal loan. Not a lot of people have $3,000-$4,000 sitting, saving it in a bank, while you’re also still paying your rent at another property. So you do need to lend the money or have the money to do your two weeks rent and your bond at a new house. And that process of vacating another property, having the cleaning done and having the vacate report done and finalising that tenancy, could take three, four days. So it’s not a longterm that you’re doing that double money, but it is double money for a lot of people. There is a lot of government support for that. So if people are struggling to do that, there is a bond loan through the department of housing that’s really affordable for you to repay back afterwards. There are some certain conditions and criteria to meet that, but it is a real big assistance. There are also, there’s also a lot of loan companies out there that do a similar thing.

Scott Lachmund: Yeah. I’ve just got to mention there is a third party called easyBondpay that our business engages with and it’s a short term financial loan to set up that bond for a new property and then obviously repay, et cetera, in a shorter time period. So there are companies available. Just a good note to talk about because I’d imagine that’s a real stress for any family.

Karen George: And you know, that brings us back to what we just said before and that is why people are staying in their properties longer. So that is why people don’t jump from a rental every 12 months. Cause if you thought of the expense you go through to pack everything up, have a removalist, go through all the cleaning, get to the other property, pay double rent for a few days while you’re in between two houses, change all your addresses and do all those things. So it’s not just the cost of how much it is to rent a property, but the longer you stay there, the less expenses like that every 12 months you go through. If you’re in a property for three or four years, think of all that stability, that you’re not going through that change, plus the stress.

Scott Lachmund: Yeah, true. All right now, 4510 TV podcast series, episode two. I am going to jump on the line. Am I going to talk to Julie Murray, who’s a-

Karen George: This is fancy.

Scott Lachmund: -senior asset manager, business development manager for Richardson & Wrench Real Estate. Let’s get Julie on the line. Just don’t talk while I do this Karen, cause this is technology and you’re going to hear the phone call in the background. Let’s hope she answers.

Karen George: Let’s do elevator music.

Scott Lachmund: Let’s hope she answers cause this wasn’t choreographed in any way or fashion.

Karen George: Come on, Jules, answer the phone.

Scott Lachmund: Answer the phone, Julie.

Julie Murray: Hello, you’re speaking with Julie Murray.

Scott Lachmund: Julie Murray answered the phone. It’s Scott Lachmund and Karen George on the 4510 TV podcast series. How are you going?

Julie Murray: How are you?

Scott Lachmund: Good.

Julie Murray: I’m good, how are you?

Scott Lachmund: Now we’ve caught you today on the hop. You’re out of the office, a busy lady and with our technology of podcasting we can call you and check on you anytime and we’re going to put you on the spot for a three or four minute interview. Just been talking offline, off air, talking to Karen George in our studios talking about all things rentals and Karen’s talked about the stability of rental prices staying the same. She’s talked about it’s a great market for investors to get into, where we’ve got good quality tenants wanting to stay longer and more stable in properties. I wanted to share that to you. Now, your role with Richardson & Wrench is senior asset manager and business development. So just tell us a little bit about what you do day to day in the rental space.

Julie Murray: So day to day, I would generally start my day with making sure that the office is running okay and that the girls all are up to speed with what they are doing, where they’re going during the day, and checking that clients are happy and if there’s any issues that we can resolve them. And I oversee that role. My main role, though, would be as a BDM, which is the business development manager. So I am here to talk to clients when they ring to reassure them that we can look after their property. So they would call and ask. Some people have never done it before, so you need to start from scratch with them.
But I would go out and meet them if they wanted to run out to their property, give them a market appraisal, give them any ideas of what they might be able to do to the property to make it more appealing if they need to do anything, talk to them about how the office works, what we do for them, how it all runs, go through the paperwork. It’s from beginning to end. So that’s what I do and it’s a whole process. I take care of them from the beginning until we get the property rented and then I’ll hand it over to the girls in the office and they take care of it from there.

Scott Lachmund: Okay. Awesome. Now you’ve been busy in the last three to six months. You’ve had some great growth in obtaining new managements, which, in turn, makes more properties available for people to rent. Give us an idea, Julie, and we’re sort of just shooting from the hip a bit. Our second podcast for 4510 TV. Give us an idea of what would be your most affordable, as in cheapest, rental property in the last few months. And then give me an example of maybe your most expensive rental property that you’ve taken care of.

Julie Murray: Oh, okay. So we do have vast differences between those two. So we do have some rental properties that go as low as, usually you’re looking at around 250 really for the lowest property that now would go for about six. Just a little unit or a little duplex, you can usually pick up around that in March. And the highest we’ve got is around the 770 mark, I believe. And recently I’ve actually picked up a lot, and usually you get a bit of acreage and some sheds and stuff with that, which are very appealing to people if they might have a business or just want a little bit of room. And they’ve been very… A few of them coming through a lot lately. So investors are happy to rent out a bigger property like that as well as people who are renting out your basic four two two. So there is room for everybody in the market to have the kind of property that they’re looking for because there is a far range.

Scott Lachmund: Yeah. Good point. Because generally either singles or couples would look at that normal, say, four two and two property for say 340 a week rent. What sort of clientele have you got renting those exclusive properties?

Julie Murray: So usually you would have… Some of them can fit in a family, so you might have a family that has grandparents that live with them as well and they simply need it for that extra room and it cuts down the cost. So that is very appealing for them. We’ve had one recently that we just rented out and it was to a landscaping business. They needed the space, the sheds and just a bit to run a big company like that. They’re a lot more work because you need to maintain lawns, sometimes they come with a pool, so there’s a lot more upkeep on them. But yes, usually somebody who has a business running or a larger family is more appealing to a higher income fit into those properties better.

Karen George: Hi Jules, it’s Karen. How are you going?

Julie Murray: All right, Karen. Good.

Karen George: I just thought, adding onto that, was the little properties. So those little three bedroom carport that someone may be not able… aren’t ready to sell at the moment, but they’re moving into state for work and they’re going to be an investor. You really explained that well, that you go and look after them and explain how we would look after it as management. Is that happening a lot where people that have been living in something upgrade or move into state and that’s really why they’re renting it out? It’s not just that this is an investor that they’re not sure of what their future plans are.

Julie Murray: Absolutely. I think that it’s a big decision for people. So they suddenly might have a job change or a life change and they have to move to another site and then it can be very quick. So they’re not sure whether, are we ready to sell? Cause it’s not something they’ve ever thought of. But they rent it out for a little while and see how that goes. So once we can get them a good tenant and everything, usually they stay settled and they’re happy, their rent’s getting paid. They’ve then got an investment property as well. They realise that it’s not scary to have an investment property. It runs quite smoothly and they can look to their future and think well this is something that we can hold on to and have as an investment till later on.

Scott Lachmund: Yep.

Julie Murray: So yeah, that does happen fairly often.

Scott Lachmund: Yeah. Good to know. Julie, let’s keep talking about tenants. What’s the demand like at the moment for rental properties in the Caboolture region?

Julie Murray: Very high. We have roughly around a thousand properties at the moment, so we have to manage quite a lot and we only have about, I think, eight on our rental list. But the demands, we need more rental properties. We do have a lot of people that show up to the open home so there was plenty of people out there, but it gives off then. We can sift through them and find a perfect match for those owners to put in their property. It’s not just down to one or two people or no people showing up. There is a lot out there that needs rental, that need somewhere to live. And that covers all markets because everybody has a different, they have a different life and they have different incomes, but everybody needs to fit somewhere, whether that be your three ones or your duplexes or your big acreage properties that are worth $700. There’s someone out there for everybody to rent to. They fit in somewhere.

Scott Lachmund: What would your advice be? I see it from the principal’s point of view that if there’s a demand and there’s multiple people applying for one property, what do you do if you miss out? You just keep trying? What can you do?

Julie Murray: Keep trying. Try and make it a little bit more personal, I think, even if you’ve got to ring the office. Ring the office, talk to the girls when you’re out there at the open homes and have a conversation with them. When you apply, put a little story with it, give us a little bit of your history. There might be something there that’s holding you back that we don’t know about and if you’re up front and honest with us then we’re not getting any surprises if we’re doing a rental check or something like that.

Scott Lachmund: I love that because nine times out of ten it’s an application form that someone fills out. It’s very yes and no answers. It’s almost like a job interview. Put a cover letter, give some history of what your family is and if you’ve got a dog named Toby or something maybe if that’s a way of standing out from the crowd.

Julie Murray: Just something generic.

Karen George: Scott saying that, that’s a really good thing to talk about: pets, and a dog named Toby. Because some owners love pets and don’t mind pets being part of the tenancy and living at the rental property, and some owners do. So that’s really important for the people applying to say, “This is my dog Toby. He’s a retired Greyhound. He doesn’t move through the day. He’s as lazy as anything. He doesn’t dig. He’ll definitely be outside.” Is a lot different to someone applying for a house with a Maltese puppy that’s going to just live on their bed all day.

Julie Murray: That is going to live inside. That’s right. And owners know that. So when we ring them, and we have to be honest with them, they already know if you’ve got a little dog, it’s most likely going to be inside so there’s no point of telling them that it’s going to be an outside dog because the facts are, it’s going to be inside. So just be honest. And if you’re moving into a property where you weren’t committed to have a pet, it’s really not a good idea to then go and get a pet.

Scott Lachmund: Ask permission.

Julie Murray: Ask permission first before you even go ahead and get it. It’s a bit of a fight that way cause it can just start you off on a little bit of a rocky patch if you go down that track of suddenly wanting a dog and getting one without asking. It’s always just good to communicate.

Scott Lachmund: I really-

Julie Murray: That’s the key to it.

Scott Lachmund: I really like what you’ve said, Julie. Again, today’s a bit of a trial for us. Episode two of the 4510 TV podcast series. First episode, real estate update; second episode, property management or rental update. But you’re giving some really good hints and tips there for tenants and I could imagine it’s frustrating out there if you’re needing accommodation, you turn up to three or four homes, you put in applications, you get knocked back. That’s a really good tip to put yourself out of the box.

Julie Murray: Just give the girls a call in the office. I can always have a chat with you and get your story as well, if it’s not something that you want to write down.

Scott Lachmund: Julie, in your role as a senior asset manager, give me one thing that is topical at the moment, like are you getting a lot of repairs for properties? What would be the biggest problem for a tenant at the moment? I’ve really put you on the spot.

Julie Murray: You have put me on the spot. A problem for the tenant. The first thing that comes to mind as we’re heading into, obviously the warmer months, will be tenants wanting some cooling in their house. So you’re going to have a lot of tenants asking can they have some air conditioning and stuff like that. So if it’s not something that they’ve thought of before, it’s going to come to a head now.

Scott Lachmund: Okay, so let’s step through that. I’m a tenant, I want an air conditioner for summer. There’s a real reality there that not every investor has a couple of grand up their sleeve to put in an air conditioner just because the tenant wants one. How do you get around that?

Julie Murray: So there are a couple of different options. So you could have a tenant… What we usually do is a tenant can apply to have an air conditioner, we start the conversation with an owner and it does entitle an increase in rent and it’s usually just a small increase or five or ten dollars a week in rent. So if we could get the tenants that they are agreeable to that and then the owner maybe is agreeable to that, it goes ahead. We just did one today. The tenant agreed to an extra $10 a week in rent and that is still in the market. So they weren’t priced out of the market at all. They still cited the market rent and they’ve got a new air conditioner they’ll lease with three started and they’ll have a nice long wait.

Scott Lachmund: And let’s see-

Julie Murray: Their other option…

Scott Lachmund: I’m sorry.

Julie Murray: Sorry.

Scott Lachmund: You’re all right. I was just going to say, let’s say that tenant then stays for a couple of years, $10 a week over two years, that’s about a thousand bucks back to the kitty and it works both ways.

Julie Murray: And if the tenant ever vacates, it’s grateful re-renting your property because everybody does like air con, so it’s already there. It’s going to always pay off. It’s never a negative to have the air conditioning there. But if you’ve got an owner who, like you said, don’t have that money, it can cost, depending on how big you want it, it can cost upwards of $3,000 sometimes. We do have a company that we use that have options of a payment plan. And there’s interest in a payment plan. So if there’s any owners that are thinking of that, that might be something that they would consider cause it might cut their costs down to just the monthly costs, keep the tenant happy, especially if you’ve got a great tenant and you don’t want to lose a tenant and then you’re losing your lift fee in an income, maybe for a week or two while we re-tenant it. That can sometimes pay for an air con so it’s always worth considering.

Scott Lachmund: Julie Murray, business development manager, senior asset manager, Richardson & Wrench. Appreciate your time. Probably caught you on your lunch break down at the shops, but appreciate your time on the podcast-

Julie Murray: You’re welcome.

Scott Lachmund: And we’ll talk again soon.

Julie Murray: Thank you, good to talk to you.

Scott Lachmund: All right. Karen George, property management director. We’re back in the studios, how good is this technology that we can podcast and relay this information across to our audience?

Karen George: It is amazing. And if you consider that Julie’s out at the moment, out at Pastel de Aguilar, and she’s out doing an appraisal and on very large acreage property at the moment, but she was able to communicate with you. Here’s technology on her mobile, great reception and she’s not reading that. She knows her stuff. So when she’s talking to you, she’s talking from the heart and she’s giving you information that’s an experience she had today. That’s what you need in a real estate agent market. Spruiking our own. And I love that she’s a member, a very valued member, of Richardson & Wrench, Caboolture. She’s a property manager who knows what she’s talking about. She’s not just reading a book or looking on the internet. She’s got lifelong experience, practical experience doing the job. If you’re looking for a property manager, that’s what you need to be looking for. That needs to be one of your things you’re asking. Are you involved? Do you know your market? Do you know how to negotiate around things? Do you know what tenant’s needs are and do you know what owner’s needs are?

Scott Lachmund: That’s the real estate rental update for the Caboolture region. Anything else you’d like to add for our second podcast?

Karen George: No, love it. Love it. Great idea. Look, I go running each morning and I put on a podcast and now it’ll be the Richardson & Wrench podcast I listen to.

Scott Lachmund: 4510 TV.

Karen George: Sorry, 4510 TV podcast I listen to. You can do both. I think it’s a great way for people that if you’re in the car and you’re travelling and you’re not watching TV or you can’t play with your phone, this is a way to get information and listen and then think about it and then you can do some research when you get back, when you can use computers.

Scott Lachmund: All right. Thank you. Our second guest on 4510 TV podcast, our second series. Once again to our listeners, we appreciate you tuning in and stay tuned. We’re coming at you, the podcast series through 4510 TV.