Episode 169 | Becoming a successful landlord | Lauren Robinson, Rental Results

Understanding what good landlords are doing right and how to maximise on your investment property.
Lauren Robinson is the Director of Rental Results in Brisbane and has nearly two decades experience in the property management industry. Lauren has also authored the book ‘Rented!’ which helps investors develop successful property management skills. Adding to the arsenal of investment property episodes, we jump into being landlords; looking at the roles, responsibilities and benefits.

Here’s what we covered:

• What are typical ways landlords fail?

• How are vacancy rates currently looking?

• How has the rental market changed over COVID?

• What legal responsibilities do landlords have to their tenant?

• What makes a great property manager?

• How to successful market your investment property?

• How is technology changing in the property investment space?

• What due diligence should you be doing before you buy your investment property?

• Are all investments equal?

RELEVANT EPISODES:
Episode 168 | How to buy an investment property
Episode 165 | Investing in commercial property
Suburb Trends February 2020 | New popular suburbs

GUEST LINKS:
https://www.rentalresults.com.au/ 

HOST LINKS:
Looking for a Sydney Buyers Agent? www.gooddeeds.com.au
Work with Veronica: https://linktr.ee/veronicamorgan

Looking for a Mortgage Broker? www.wealthful.com.au
Work with Chris: hello@wealthful.com.au 

Send in your questions to: questions@theelephantintheroom.com.au

EPISODE TRANSCRIPT:
Please note that this has been transcribed by half-human-half-robot, so brace yourself for typos and the odd bit of weirdness…
This episode was recorded in March, 2021

Veronica Morgan: Why is it that over 70% of property investors stop at one property? Could it be that dealing with tenants is not as simple as we think it should be? Well, perhaps it's dealing with property managers, that's the problem. Or maybe it's only after settlement that the investors realize they missed out on some critical due diligence. Welcome to the elephant in the room. This is the podcast where we love to talk about the big things in property that never usually get talked about. I'm Veronica Morgan, real estate agent buyer's agent co-host of Foxtel's location, location, location, Australia, and author of auction ready.

Chris Bates: And I'm Chris Bates mortgage broker. Before we get started, I need to let you know that nothing we say on here can be taken as personal advice. We always recommend you engage the services of a professional.

Veronica Morgan: Don't forget that you can access the transcript for this episode on the website, as well as download our free full forecast report, which experts can you trust to get it right? The elephant in the room.com delay you today.

Veronica Morgan: We're talking with Lauren Robinson director of rentals in a Brisbane. Lauren originally came to property management from a marketing background, has really looked into what makes a property rent easily. She's authored a book called rented, which shows new and not so new investors, how to develop an investor mindset secure the most suitable tenants create property appeal. Managed legal responsibility is very important and rent out property in the quickest possible timeframe. And we're also interested in her take on how marketing for rental property is changing and the increased usage of technology in this space.

Chris Bates: So thanks for joining us today, Lauren, thanks so much for having me Veronica and Chris, I guess the first thing I'd probably be keen to understand is what are some of the typical reasons you find that a lot of new landlords really fail when they come to renting out their properties?

Lauren Robinson: I think it's just having really good understanding of scent, demographic of tenants that are likely to rent their property. And then perhaps when they're looking at their investment property, they may be don't really understand what that market we're looking for. And I also think sometimes where artists go wrong is that they don't understand the legislation. So perhaps they think that, you know, they can, they can reach out a property where it may be not legal high, but advertise it that way. Or, you know, maybe they just don't understand that entire legislation surrounding the residential tenancy act.

Veronica Morgan: I'm sure a lot of people do not understand legislation and Obviously differs state by state as well. And I would imagine you being based in Brisbane, dealing with a lot of landlords that don't even reside in Queensland, would that, is that something that, you know, the state differences in States comes into play?

Lauren Robinson: Oh, definitely. Yes. And I mean, yeah, like I'm very familiar with the Queensland legislation and often get phone calls from homeowners who have investment properties in new South Wales, Western Australia, and it very much do state by state. So I think, you know, really having someone in each state where you have a property is really important that they understand that specific legislation.

Chris Bates: Veronica is kind of pointing out there a really good point where Brisbane and Southeast Queensland and just Queensland, a lot of people in Melbourne and Sydney have got investment properties in. And a lot of them not really, haven't really gone in there with open minds, I guess they've sort of just basically read a magazine or been sold by a property spruiker a new apartment or something like that or duplex. What are some of the areas in Brisbane where you find properties really hard to rent where there's lots of other rentals?

Lauren Robinson: I think that really, I mean, every, when you look at vacancy rates in particular, so we're seeing it fluctuates in their specific areas right now where we're seeing vacancy rates that are a lot higher than they normally would. And one example of that is St. Lucia. So that's where the university of Queensland is in particular that areas have really effected junior national students arriving so they can see right around 3%. So we haven't really seen that in St. Louis. I myself have owned investment property there. I've had that for 12 years and I've always had it rented, not a single day, whereas this year where I've had vacancy and I've had to reduce the rent. So I think it really depends on the areas. I think, as you go further out on the CBD, what we're saying is that there's a lot of stock. So the older properties, maybe 15 to 20 Ks out of the city, that they're the ones who, you know, people are looking for newer, newer properties and they tend to, to drop, or you might see some bank into that.

Chris Bates: So a lot of the houses that are, you know, 30, 40 years old, maybe around the five, $600,000 Mark or maybe even cheaper, a lot of those that are struggling to find rentals because they're not renovated. That's sort of not sort of,

Lauren Robinson: Yeah. Proximity. So if you're looking, if you have a house that you know, is, is older style, but close to the city, they're still achieving really good brands and there's still demand. Whereas we're saying, you know, further out you know, people are able to move closer in when, when they when there's more availability.

Chris Bates: It's interesting because, you know, there was a a number of sort of people out there in the property world that sort of pushed that middle and outer ring Brisbane and you know, land and buy houses at the three, $400,000 Mark. But what you're saying is that a lot of the renters you would rent that would rather go be closer to the city and rent something a bit newer. And so there's kind of like a growing problem where there's not much strong demand for those sorts of older houses on bigger blocks.

Lauren Robinson: That's right. Yeah.

Chris Bates: We're on a corner up in Brisbane maybe 18 months ago. I think it was Veronica. Something around,

Veronica Morgan: I lost track of us. I was over even on a plane,

Chris Bates: Really interesting. We saw a massive billboards sorta out there sort of free rent free month rent. People trying to rent their high rise apartments three months free.

Veronica Morgan: Oh, well, yes.

Lauren Robinson: And I think as an investor, you need to be really careful, I guess, seems to attract you into buying a particular area. So three months free rent, then that really shakes your annual return.

Veronica Morgan: But the problem is in Brisbane, you know, you've got loads of stories about the Southeast Queensland boom, and what is a boom? Is it a development boom? Or is it actually a property boom. And that's been marketed heavily to people who reside in Southern States, particularly in Melbourne and Sydney, where property is expensive. And so Brisbane by comparisons looks cheap and they're not realizing that there's, you know, there's more to it, but you've also got, you know, well-publicized oversupply of apartments in Brisbane in West end and new farm places like that. Great really great inner city areas, you know, and yet loads and loads and loads of apartments and not finished being constructed either.

Veronica Morgan: And in fact, I think those billboards going back in memory with the three months free rent and the iPad with, for those type of properties, they're not, and they're not far out, you know, so, you know, from a property management point of view, I mean, these people buy them. They think that they're great investments. They've probably got a rental guarantee for a period of time, et cetera, et cetera. You know, they're brand new for a while. So they'll, they'll attract or they'll appeal to people who don't want to go for something a little bit older, but then they'll wear and tear and they won't look brand new forever as a property manager. You know, somebody has already bought it. They've already made the mistake. How can you help them, you know, rent that. I mean, how do you make that stand out? Can you make that stand out?

Lauren Robinson: And I think you definitely can. And I think we manage quite a lot of properties in those high rise complexes within five to 10 K the CBD, where they use a lot of stock that is similar that's available. So I think when it comes to marketing the property online, it's really important to make sure that your property is sitting at the top of the list, professional photography, utilizing today's virtual tours, perhaps it's Facebook marketing. So you want to get as many eyes as possible onto that particular investment property. Once they're in the building,

Lauren Robinson: It's getting them to choose your property as opposed to, you know, maybe, you know, 40 others in that complex that are for rent. So a couple of the things that an owner can do is any virtual furnishings online advertising, but once they're there making sure that that property stands out. So can you add a storage? The storage is something that's really difficult in units. Can you put something about the cost size to make sure that that's, that's different? Can you do anything called the balcony? So can you add something on there that's falling corporate approved, obviously, can you install a security Springs? What are the things that you can do to that particular property that might make it more appealing? So I think one of the things would be to get the most attention on the listing in the first place and making sure it presents at its best online.

Lauren Robinson: And then once they really, how can you make your particular unit more appealing? So one example I've seen in particular is the unit which had a two bedrooms plus a study, actually put a built in desk in it to make it more like more as a study, as a party. It definitely wasn't suitable for a measuring. There was no windows in it just trying to make it more appealing.

Veronica Morgan: So it's, it sounds a bit like polishing a turd into a strawberry, but also these things, if other owners in the building sort of clue to it, they're not permanent improvements. You know what I mean? These are additional, like once you bought a lemon, it's like, Oh my God, I have to try to add some sugar to this thing to make it taste better. And I'm going to do that. And I'm hoping that I'll get the tenant in there until the other, before the other owners realize I can put a bit of sugar on the element too, you know, it's, it's, you're basically stuck aren't you, or you don't want to be differentiating your property purely based on price that just drives the entire building down.

Lauren Robinson: So I think it's trying to look for things that would be as appealing as possible to that demographic and, you know, in an iPod you know, I don't necessarily think that's the best way to go, but that's what you say, you know, three months free plus an iPad, that sort of stuff, as opposed to drop, just dropping and dropping and dropping the rent.

Chris Bates: All good. I appreciate that. So to understand the mindset of sorta your vendors of mango property owners, I guess and they're, you know, I guess they must have a bit of frustration if they're say for example, board a new unit and it's, you know, potentially down in value, maybe they've lost 10% from what they paid, maybe four 50, it's worth 400, or, you know, we've seen plenty of these over the years, maybe at 500 now it's worth four 20. What, you know, and then having problems renting it. So this, this is a stressful experience when they sort of come to you, what's sort of their longer term strategy to get out of these, are they saying, well, as soon as I don't lose any money I'm going to sell or are some just taking it on the chin and selling them as a big loss. I mean, w what sort of, some of the stories you're saying,

Lauren Robinson: Yeah. I mean, we see this all the time where people have bought off the plan, or they might've bought you know, interstate and not never been, been to Brisbane to see the property. And we're saying, you know, a new development staff in front and they've lost their views. So we've had one particular owner that I can think of, but would also plan has never been first thing in the South bank. And another building went up right in front of it immediately, and it probably, you know, $150,000 less. So, you know, it's a long-term game. You don't want to be selling that property whilst the other properties seem developed right in front of it. So no one's going to want to buy or leaving a property. I'm paying top dollar when there's construction going on right in front of you. So I think it's really knowing when's the takes in the market, understanding that, and also making sure that you are selling at the right time. So that was able to hold on and it's, it's in a good location. It rents reasonably well. So it's not, there's never any vacancies there and it's not actually costing him a whole lot to keep. So he's holding that for now and then, you know, waiting until this applying in Brisbane.

Lauren Robinson: But I think here we are yesterday, who's held the property and he's looking at retiring in the next three years. And, you know, I guess at the moment, he hasn't seen much shines in a couple of his investment properties. So I guess when you look at, you know, rental returns versus capital growth, you know, a lot of people do buying units and apartments for the higher rental yields expecting them to return fairly quickly. And yeah, I guess that's sort of what we've seen in the last few. He's embraced them. We had an over supply of apartments as has hers and other locations.

Chris Bates: So, I mean, there's probably a lot to chat about sort of the mistakes of investors and believing that yield high yield is going to get them actually a net return and the real truth around appreciation, et cetera. I guess what I'm interested in sort of exploring is, you know, so let's say they're holding on so they can get a better price. But as soon as, you know, let's say apartments in Brisbane recover because there's low listings, maybe underbuilding for five or 10 years and house prices go expensive, which is happening now. Then there'll be potentially a bit of demand pushing to apartments. But as soon as apartments rise a little bit potentially back to sort of what people are paid, you're going to start seeing this flood of people wanting to get out, because they've gone through a very lengthy period of stress, whether they've been negative equity, they want to get rid of it et cetera. So do you think that a lot of your sort of people with these type of properties, as soon as prices rise a little bit, they're going to want to sell because it's been quite a painful experience?

Lauren Robinson: Well, I think, I mean, I guess, you know, in terms whether they gonna want to sell it also depends on what stage they're at. So we, we work with quite a lot of clients that are getting to that stage where they're at retirement level and then wanting to, they starting to think about a title where we sell any investments, how long do we want to keep these assets for? So I think that really depends on where they are at, in their life also. You know, like, you know, I'm a firm believer in, you buy an asset and you hold it as long as possible. So, and I think, you know, we will see eventually these increases in the marketing in units and apartments. We're already seeing brands so often that we're not going down. 

Chris Bates: Yeah, the problem with new apartments that as soon as price rises happen what that does is allow developers to make more money. And so when developers can make more money, that means they can crystallize the land, they already own, you know, they knocked down that shop and they're building. So as soon as prices will rise, you will get more and more stock. And so then that'll then just taper off demand and then a lot of the buyers or buy the new stuff, not the old stuff. And you'll get this flat line and continual flat line your prices, hence Lockie Melbourne, et cetera. So the only way you're going to get increases in prices long-term is a significant under supply and a growing demand. And these assets, unfortunately, don't tick the growing demand. And they've always going to have increases in supply. So is this an interesting sort of conversation where you know, people have got, say, poor units, they stay, hold on because there's this belief I can't lose money or prices are going to rise, but ultimately they're just wasting years and years of their life and what they could be doing with that borrowing capacity

Veronica Morgan: Attunity costs. And it's dangerous. Cause we weren't aware of disgust, you know behavioral biases in many, many episodes. And if we go back to the ones who've talked about disposition effect, you know, that, that, and also the, the loss of version that pain of losing, but also the idea that we try to avoid selling those crappy assets and crystallizing those losses because we feel better if we sell good assets or if we're better, if we just to get it in the sand and hope that hope that we wait, we wait, we wait until things go become good, but I'm interested to, I mean, you know, once people have made that decision, you know, they've actually made, they're committed to it. They've bought the property and they've got to make it stand out. So it's interesting what you're saying there, Lauren, about those sort of those additional things that people can do in a quicker unit to try to make it stand out. But I guess that was quite painful to two owners to say, well, you know, if you want to rent your property when there's 40 others in the building or, or around that are very similar, you have to spend more money on it. That must be a hard conversation for a property manager to have with the landlord.

Lauren Robinson: Isn't it? Yeah. I mean, I guess it all comes back to, well, how much is, you know, adding a storage cage or how much is, how much are these additional expenses going to cost versus, you know, how many weeks I can see. So I think, you know, if it's a farmer dollar a week unit and it might cost you a thousand or $1,200 to, you know, how many weeks really. So I think it's working out well, what's the annual return. I mean, we've definitely seen changes in and you know, there's like the only one in the building. But I guess an example, like at the, what we're seeing is that over 600 properties and at the moment it is quite a strong market. Right. But I think, yeah, it's making sure that they do really stand out. We've had properties where we're in a building for three weeks and we'll be able to rent it in two days. And it really does come back to making sure that that property is marketed properly online. So it was changing how it was advertised and you know, all of a sudden got tenants in there. So I think people may need all good marketing online really does play in affecting getting quality tenants quickly.

Chris Bates: Have you had much experience sort of with clients who've bought new house and land packages or new duplexes? I know there's a very common you know, Ipswich sort of Logan area, Redbank, Plains Springfield, these sort of pockets where they've sort of been sold on the double, the income, but then what happens there?

Lauren Robinson: I mean like our office, we do not go to that area, but I certainly know people who have bought properties in those areas and you know, what's happening is that they're, they're promised to Julian come, they promised, you know, quite high returns. You know, if they, if people have helped chimney in those areas too, you know, side by side on a new duplex and you know, pretty much more to have a house with a yard there are issues. Yeah. I guess you mentioned those careful decisions, which is why living in that area. You don't know the market of the demand or even the demographics of people who are likely to rent that property and what they're actually looking for.

Veronica Morgan: That's a good point. Two points here you've raised. One is the buyer's agent. Unfortunately, a lot of buyer's agents have been recommending that crab and, and typically they are not local. So that goes into the second part of what you've said there, which is about knowing the demographics. So a lot of out of town, I know a lot of Sydney based and Melbourne based buyer's agents have been buying a lot of that crap for their clients. But the locals do understand the demographic. And so, you know, they will hopefully be able to explain why that is what's we call investor stock, not investor grade, but you talked about, you know, we talked about vacancy rates earlier as well. And you said in your business, you got zero vacancy at the moment, which is, you know, well done. Is that, is that because the market in your area in, in sort of obviously an inner Brisbane is stronger. And when you also talk about St. Lucia, is that how you say it? Areas near the university where the vacancy rate is up 10%, how does vacancy rates translate low or high? How do they translate into actually rental income? What's the impact on rents for instance, of having a 10% vacancy rate?

Lauren Robinson: Yes, exactly. So when they're are looking at vacancy rate, it's really driven by supply and demand. And when we're looking at, you know, if I can see rates for the time, you might think, okay, that looks really positive. I'm going to invest in that area, but it's, every socket is different every, and there's different driving factors in each sub home as well. So, you know, it might be that particular area or certain new farm. There is an oversupply of apartments that majority of people who, you know, reviews and they want to live in apartments, so they might be downsizes or they might be areas that are more, but the demographics definitely families awfully cause they've got pets and children. So I think it's really important to understand when we talk about vacancy rights, it's also really important to understand, well, what's the supply and demand because that's going to be driving. You know, how does that that little loose vacancy,

Veronica Morgan: You just mentioned pets. And I know in my properties that I own, particularly when I've had houses before I've renovated them that I've known that by making them, you know, advertising that you can have tenants can have pets. You know, I know that that has definitely helped me rent these properties out at times. You know, even when vacancy rates are rising. And I know people that have dogs, for instance, particularly dogs, cats, maybe less of an issue trying to get property to rent is quite difficult. And I know that certainly not all apartments allow pets either. You've got the actual building problem building deciding whether the pits will be allowed and what the terms are and conditions are around that. So what are some of the pros and cons of allowing pets in your rental property?

Lauren Robinson: Yeah, I mean, I'm a parent of myself. We have a dog and I think there's definitely good pet owners and not say good plan out such and such or something it's really understanding well, what type of pet and whether it's actually going to be suitable for living in that property. So any, and like he was saying with body corporate, Sarah option restrictions around sizes and the types of pets, and I think it's, it's important, you, or have a decision in that as well as the pros, I guess, allowing pets in a Rachel's property, come back to you, we'll have a logic, we'll have a pitch. So I think it's really important to make sure that you can probably lends itself to a, it, for example, it does have a funny sense. Yeah. Then often people will be seeking. When I say you're looking at more channel on the property can possible damage. Majority of landlord insurance policies will cover insurance policy. See what you're actually covered. You can ask for an additional long in Queensland property. So it just, it really comes back to how comfortable are you. But sometimes there are requirements from body corporates for different breeds. So they might be really important to check that type of thing. It's funny that pets have got their own references. They've got their own little [inaudible].

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Lauren Robinson: Thanks thinking I think he Brisbane and it's happening. Lots of places, not just Melbourne Sydney, Brisbane house prices are starting to go really strong and go quite nuts. And we've had clients been buying older Queensland as some of they maybe renovated 10, 15 years ago, or some are, you know, quite a bit older. But maybe they're still in decent condition. But maybe it's got an old kitchen. Maybe it's got old bathrooms. And maybe it's only some of them have got quite weird layout. So maybe it's only a two bed et cetera. And they've always usually bought kind of in the, around the Riva, right? So maybe Gracefield Paddington, Barden, Balmoral wound Gabba V sorta areas. How are those sort of, you know, older Queensland, his own taste and size blocks that can be renovated, even if they're not renovated, how are they renting? You know, is there a real strong demand for those types of older houses that still present, you know, reasonably, I mean, that's sort of the stuff that we see, you know, people are offering higher rents. We keep databases of tenants looking for properties, the types of properties. And I guess we, we find that there's not as many of them. So what we're seeing is that once a week, that lifestyle location, but they still want house. Definitely there. That's great. So

Veronica Morgan: Because you can't hold an auction for rental, for rent in Queensland, can you

Lauren Robinson: Now you have to advertise a property with a set amount,

Veronica Morgan: But, but that doesn't stop a tenant or prospective tenant to offering more. It's just that you can't call for them to offer more. Is that,

Lauren Robinson: Is that right? Yeah, exactly right. So we have, you know, for example, yesterday we had someone off with $15 more a week that came along to the intersection and they saw, you know, there was 12 people there. So you know, spread over an hour or so. And actually by the office to saying what's the best way. So it might even be that could be appealing in advance. So we're seeing a lot of that happening for properties where they come to an intersection, there's quite a lot of people or activity there

Veronica Morgan: Now I know that in your business, you like to use and adopt new technology. And then I know that in the prop tech side of things is there's a lot in that space, particularly with helping property managers be more efficient. And, and I would imagine there's a knock on effect to their tenants and their landlords as well. What are you seeing, I guess, what are you actually using? What are you adopting? What are you testing? What are you seeing in that space?

Lauren Robinson: I guess we're seeing a lot of like artificial intelligence, same broad age, the property management industry when it comes to lodging maintenance for tenants. So that's, you know, it's all like artificial intelligence now that's sort of driving that. I guess when it comes to applying to properties online booking online sections, it's automatically the properties just come onto the market, which industry property managers have those relationships with the clients and the tenants.

Chris Bates: I mean, Coby was a big gear, I think you know, a lot of people around the world, these living in Singapore, Hong Kong, you know, UK, U S you know, have come through us and said, look, we're, we're moving home, we're changing our sort of, we're bringing forward. We are going to stay for five years, but you know what, we're just going to come home early. How have you sort of seen that play out in Brisbane? You know, sort of similarly, you know, as Sydney house prices rise and Melbourne rise and the, you know, work from home movement has allowed people to consider leaving these capital cities, Brisbane, usually a pretty good option for them. How are you seeing the poor experts moving back and say, Sydney side or Melbourne side is moving to Brisbane? How are they affecting not only the rental market, but you know, a lot of them are they buying straight away or they sort of checking out suburbs for a year before they buy?

Lauren Robinson: Like, what do you think people into say or overseas? And it moving 2%. So we're all two doing zoom in sections, video walks through. So a lot of that's happening at the moment and what we are seeing higher rents, or they might be off. And are they really wanting these sort of entering premium suburbs that, you know, they can get the sort of Brisbane lifestyle, hence why they're moving to Brisbane or coming back from overseas where they've gone for lifestyle. Maybe we're saying we're kind of a house in St. Lucia where a lot of that's happening. So that's definitely happening every day at the moment.

Veronica Morgan: Now we talked a little earlier, we touched on it and that sort of legal side of property management and landlord responsibilities where, and, and look, some of these are universal across the country. Some obviously would be specific to legislation in Queensland, but what are some of the landlord responsibilities that they're probably not even aware that they have that responsibility?

Lauren Robinson: I mean, it's definitely a couple that you know, they need to be aware of which legislation, which is coming out in 2022. So I got to legislation, which I just need to be functioning or actually doing the work this year. We're also, you know, pool fencing compliance. So, you know, there's cool fencing. It's also around line cord. So that's another, like there's legislation around that and requirements to have, you know, making sure that they're actually on walls. So yeah, and it's also making sure that you know, your property is, you know to leading state. So often we may go to a property and you know, if we haven't, if it's a new combination last, it might be that the hand rails shaky or, you know, little things that really do put the ramp more at risk. And so there definitely types of things that, you know, as a landlord, you have a responsibility to make sure that that properties is in group,

Veronica Morgan: The risks to the landlord, if they don't address these things, what's the recourse.

Lauren Robinson: Yeah. So there's, there's a number of great courses and, you know, it's really making sure that they're aware of what potentially could happen. So obviously making sure you put your insurance in place, but you know, someone injures themselves and, you know, they could be sued and it's definitely having any investment and you've got all locations, Kuranda Kia cash, and yeah, I could have a conversation or damages all into the tenant for not making sure that the company was suitable.

Veronica Morgan: Yeah. I mean, look, there's, you know, that you can't insure your way out of your obligations. And perhaps some people think they can, but there's also, you know, a bit of an uproar. Some landlords think that it's unfair, that tenants get too many rights and all that sort of thing. What's your view in terms of the legislation in Queensland at the moment, you know, do you think that it's actually leaning one way or the other, do you think more can be done to actually increase landlord's responsibilities or, or it's the other way round?

Lauren Robinson: I do think it's it's reasonably fair. And they're saying the introduction of a lot of new legislation that's coming to play to make sure that, you know, it is where we see new legislation was introduced around the tenants who have been affected. I actually think that that was over there and we're very lucky here at Queensland. He's really involved in making sure that that legislation

Veronica Morgan: Big uproar there, because the first lot of legislation came through that was, that was unfair or deemed to be unfair. And there was a, there was an uproar and they changed it. Yeah.

Lauren Robinson: Yes, exactly. So like obviously I was the previous housing minister and yeah, it, it definitely, I guess some of the things that were going to be introduced and there was a lot of industry backlash and a lot of investors got to to make sure that that legislation do not get through, which would not have been fair to landlords. That was definitely tenant. And I think what was introduced in the end was much more, much, much fairer.

Chris Bates: Sorry. Have you seen you know, over the last year as well, that are talking a lot of people coming into Brisbane, you know, overseas, you know, people from interstate, but in terms of say like the inner ring sort of housing market where you've got, you know, maybe it's young families or and they've got a house, but they, you know, had to commute to the city sort of four or five days. And now they're saying, well, you know what, I'd much prefer to live on the sunny coast you know, or down towards parts of the gold coast or, you know, even a bit further view, sort of saying some sort of new properties where, you know, ultimately they would have just stayed in Brisbane forever if COVID didn't happen. But now they're saying actually, you know what, I'll keep my house in Brisbane or rented out and I'll move to these sort of more beach locations.

Lauren Robinson: Yeah. We are definitely seeing that. And I think the markets in areas, areas as a goal and the vacancy rates are extremely low at the moment and it's very difficult to get a property that yeah. So, I mean, I guess people are more I guess thinking about where they'd like to leave in close proximity to work. So that is definitely happening. We all will say seeing a lot of people relocate to Brisbane, so the infrastructure pairing and racing. So yeah, so definitely people are considering where they live.

Chris Bates: Yeah. It's interesting. The, you know, cause I think one, we can talk about all the more people moving there, but there is a big thing as to how the next couple of years where the return to work, how many people actually still decide to leave Brisbane and maybe live a, you know, a new server or the gold coast, et cetera, in terms of the middle ring. I know like [inaudible] sort of pretty nice place to live and you know, down towards sort of the beach, there's a couple of beats like So one of the main red Cliffs. Yeah. What, what are some of the outer sort of areas where they're really super desirable rather than say living in the NRA?

Lauren Robinson: It really that's one of the areas saying dates and all the area, which is class sold after all these areas are quite desirable to say they offer that community, which is very appealing to people.

Veronica Morgan: Yep. And is it the main transport train? Yeah. To those, those outer areas? I mean, is there a train link?

Lauren Robinson: Yeah. There's train and boss. So yeah, I think I guess that's the other thing, a lot of people aren't actually having to come into the city anymore for work. So if you are able to work from home then yet it's definitely a days.

Veronica Morgan: Oh, I thought it was quite odd that Brisbane is, you know, so inland.

Lauren Robinson: No, it doesn't count.

Veronica Morgan: Lauren, do you have a property Dumbo for us? You probably got a few automations.

Lauren Robinson: I do. So I guess one of the ones that, you know, probably I always think about is we had a tenant to swore that they had ghost in their rental property. And they said that the clocks are being turned back and they ended up moving out that it was actually one of the kids for their children had actually been sending back and clocks and

Veronica Morgan: One of their own children, they couldn't fess up.

Veronica Morgan: Another one, come on.

Lauren Robinson: I mean, some of the things we say you know, still embedded in sections and you know we've had to walk into a couple of people, even though they're still asleep in that room, it's just really awkward, but you know, we do everything we possibly can. They say, remind them, there's no way that I should be in bed or the shower.

Veronica Morgan: It's awful. Yeah. I think I don't envy property managers. I think they,

Lauren Robinson: Yeah,

Veronica Morgan: More challenging things and certainly sales agents do.

Chris Bates: And that's why I think it's so important to get a good one. Like the reality is I think it's a tough job and I think COVID was probably one of the toughest jobs out there, especially in the property space. She had you know, issues with, you know, maybe rent, not being able to be afforded you know, the late payments investors struggling, you know, there's a lot of middle management of stakeholders in the property management space and you need to know the legislation, you need to know what, what the protect the vendor or the, you know, the landlord and but also protect the tenant a little bit. If they're getting, you know, mistreated by the landlord, which happens where it's not doing the fire alarms or whatever it is. So, you know, a lot of it's you know, quite thick and you gotta be doing it. You know, if someone's not paying, going into a re is it's, it's a tough job to sort of CLO that money back. Right. And you've got to be really on them, et cetera. So you really need a property manager. That's got your back you know, not only picking a good property, but then also picking a good property manager. So if you get those two things, a lot of your stress basically goes, is that where you sort of believe,

Lauren Robinson: I mean, I've been doing this only 20 years now. And I think over that time, I've seen a lot. And I guess one of the things, you know, we've seen a range clearly not laid a lot downstairs, but they probably advertised it as a four bedroom when it really should be a two bedroom, obviously that affects the rent, but they really putting that landlord at risk by doing that. So then, you know, and I guess that, that criticism, so it's really important to make sure that you do understand that legislation, you know, choosing a property manager who is familiar with it, and he's going to be communicating with you and holding your hand and leading you through that because yes, you can go ahead and you can, you know, you can get away with these things until you, until someone complains and it's just really, you know, it's, you don't want to be taking additional risks when you don't have to, you shouldn't be doing

Chris Bates: Thoughts on pools. Actually, they were in Brisbane, like, you know, do renters love them. You know, who sort of pays for the maintenance on them, but you know, how, how important is it and should you sort of rule out a property if it has got a poor, just because of the sort of maintenance and the cost, or do you think that you're always going to get a premium for it? Cause it just say in demand with the Brisbane climate, I don't know what your,

Lauren Robinson: I mean, like I personally like pull it home. I think, you know, it's, if it fits into that market, then that's really good asset. So I think once you start to get, you know, four or five bedroom houses with three bathrooms, yeah, definitely a pool is an asset pool. Definitely it's always the tenants, making sure there's an additional set of eyes, checking the equipment and making sure it's running as it should be. But also additionally seeing them in, you know, maybe $600 student houses where that is not an asset to the investment, it's not being looked after and I've actually had an owner of removes a pool and have it removed and haven't reached her because it was a money pit. There were trees all around it. And obviously the chance,

Veronica Morgan: I guess it comes down to the type of tenant. Like you talk about demographics earlier. I mean, the reality is that tenants have obligations to right, to look after them and to do gardens. I've seen plenty gardens with tenants, haven't done them, but you know, they are meant to keep the prop, keep the external the exterior of the property in good order as well. But how do you, because that's, I think you've got to be pragmatic about this. Don't you, you can't buy a house with a beautiful garden and then rent it out and really expect it to main remain beautiful. The odd tenant will because they really care, but most are thinking well, bugger that I just want a nice house to live in. I'd come and bother with all that. How do you sort of walk that path? Lieutenants? I think it really depends on, I mean, yeah, you're exactly right. So, you know, tenant is going spend as much time maintaining the gardens, which is a very, very small percentage. So I think if you've got an executive property and your gardens, I mean, we've had pages of cut into the shapes of trees. I think we do. It's making sure that their issues are set standard and it may be continually, you know, ignore their obligations on that legislation.

Chris Bates: I mean, if you love your gardens and the gardens are a big asset to the house, which they can easily be impressive, maybe not the gardener, which I actually quite like, you know, when the edge is shaped as a good friend, they've just saw it, I say West Footscray, Melbourne. And whenever he used to say, he must decide Mike French got straight and look at his house. Cause he used to have all the animals, giraffes and elephants. I love looking at it. That was hilarious. But yeah, if you've got a really good garden and you surely you just pay for it yourself, right. You just pay for the maintenance because you know, you don't want to take any risks with that. Cause you got to protect your asset and not assume that someone else is going to protect it.

Veronica Morgan: Oh, for sure. I had one house that I had and renovated and I got the garden done and I used to, to have that landscape well maintained by gardeners every month. And you know, because I, I knew what it cost me to put the garden in and be that they are more valuable, the more established they are because of course you, even, if you look at landscape and you go, well, how much has a little settling cost versus an established tree, it's a massive difference. So it's well worth continuing to invest because that is an investment. I a very important Part of the asset.

Chris Bates: Well, it's so true because it doesn't happen overnight. I'm literally at the planting stage and we're starting to do the coatings on plants and stuff like that. And you're right, Veronica. It's like, and you know, if you got an investment property, there's no reason why you shouldn't start that garden straight away. Right. And pay for those trees and pay for the maintenance. Because you know, when you do want to sell that in 10, 20 years time it's too late, right. Because you need to build it.

Veronica Morgan: I've got a little bit of a Dumbo. So someone that I know had a, you know, fairly unattractive wall that, that was quite prominent from their living room and on the neighboring property. And I said, you know, you need to grow some Ivy or something over that. So they actually had to be friends, the people that lived underneath cause there's an apartment. And so because they had a garden, so they could actually go down there and climb up over their wall to be able to plant plants, to grow up over this wall. But it was sort of discussed for so long and nothing done about it. And I was like, Oh, I'm going to sell in a few months. So I better go and do it. And of course it just didn't have enough time. So you had these little tiny puny, little green plants that you go that one day we'll cover the entire wall. It's going to take a long time. And it's a massive act of faith to you know, to be able to look at it and say, well, you know, that's what the future's going to look like, but it wouldn't have added enormous value if it was looking at green run, there's this sort of rust colored wall.

Chris Bates: Yeah. Get started today. If you can. Thanks so much for the chat Lauren, there was lots of great tips there for people in the Brisbane market of what to buy but also what to buy and how to potentially put lipstick on a pig, I guess you have to rent it out. So I really appreciate the chat. We want to make you a better elephant rider and this week's elephant rider training years.

Veronica Morgan: Well, let's talk about where property investing should fit in your overall goals and planning. Lauren talked about one of her clients who has owned an apartment for six years and hasn't really done much in terms of price growth, if at all. And now they're planning on retiring in three years. And so clearly that's done and they use the word it's my investment. Well, I would argue that's not an investment. And this is a danger. I often come across people and you probably do too, Chris, where they've bought property investments, thinking that that's what you should do in order to secure your future. But unless they buy it early enough in life and unless they buy the right asset, they end up going backwards or doing nothing. And thinking about where you are in your life, you do need a long runway with property, you know, yes, you can buy with a 10 year horizon. It's better if you're buying with a 20 or 30 year horizon, but if you're buying with a 10 year horizon, focusing capital growth is absolutely 100% because you need to have options at the end of that 10 years and focusing on yield alone, particularly if you're borrowing a lot of money, it's just not going to get you where you want to be.

Chris Bates: Not a fan of being a financial advisor for too long understanding alternative options to property in, so people who are getting to the retirement phase Oh, they're already just there. You know, a lot of people love the bricks and mortar. I can see it, all that sort of Jingo, but I think the reality is a lot of those shouldn't be going anywhere near property. It's a lumpy asset. You can't really sell a brick at a time. You know, you've got potential lower yield, you've got to pay tax on it. And potentially this better growth in alternative assets, commercial property, you know, shares you know, a diversified portfolio. You can sell down having money in super et cetera. So, you know, a lot of retirees property not great, you know, and also that sort of 52 sort of 55 you know, where it's maybe a five to 10 year runway to retirement, it's a really hard thing also for them to potentially think that property is the best option.

Chris Bates: You know, potentially if they could go into retirement with a lot of debt the property that may is not a reason that much and making very little money on here, there might still be negative gearing costs et cetera. So you've got to be really careful if you're in your fifties in looking at property as your retirement strategy sometimes there's better options, you know, diversifying into a share portfolio, maximizing super there's, other things. But when you are in your forties and your thirties and obviously your twenties, but you've got a much bigger runway, right? You're talking 20 years. And so you know, their property over that timeframe, you can leverage a lot further. I think that's a much better bit,

Veronica Morgan: As long as you focus on a quality asset. That's the final word on that one.

Chris Bates: Yeah. And that it's so true. I mean, we just say it all the time. Like people have made, they've got the time, right. You know? Yes. It's, you know, great time. We got lots of equity in the house. We've got servicing, we can afford an investment property. And then I just think about the number of properties we've got one car at the moment I'm really battling to get them to focus on the quality of asset and not just getting a property. And it's a bit of a pain because the reality is it's so close, but they're just going for the easy option. And even though this, you know, super on the ball and lots of other things, it's just getting that quality assets, just not sinking in. And unfortunately, I don't think it sinks in with enough investors.

Veronica Morgan: I guess that's really what this boot camp is about. You know, if you are looking at buying one of these sort of apartments that are heavily marketed to investors, and you're thinking that this is, and it's easy, much easier to buy these properties than it is to buy a scarce asset, talk to the property managers that are renting them out, not the ones that are affiliated with the broker or the developer or the agent that's selling to you, but other ones in that area. Because I think that that's one of the things that Lauren did sort of give some insight into and that is that they have to do all things, all these tricks to try to make that individual property more rentable. And if you get an insight into that, into how difficult that is and how you need to spend more money, and then if other people catch on, you've got to do something else because everyone could do that. Then that might actually encourage you to think twice about that as a inverted commas investment.