Decoding the Impacts of Real Estate Legislation Changes

Ever wondered what's brewing behind the closed doors of property management legislation? Fasten your seatbelts as Samantha Eason, a well-versed principal and property investment specialist, leads us through the complex labyrinth of government interventions in the rental market. Premier Stephen Miles's recent social media musings on rent bidding and a real estate code of conduct have sparked a firestorm of debate, and Samantha doesn't shy away from sharing her unfiltered take. 

From the nitty-gritty of property management training to the ripple effects of legislative blunders on both property owners and tenants, she lays it bare. This episode peels back the layers of responsibility and strategy that come with property investment, leaving no stone unturned in evaluating the government's missteps and the pivotal role of the Office of Fair Trading and REIQ.

Samantha Eason doesn't just stop at critique—she brings to the table a wealth of knowledge on building a bulletproof property management strategy. 

If you've ever questioned the value of a top-tier property management team, Samantha's insights will illuminate just how integral they are to the prosperity of an investor's portfolio. Just as you'd trust a banker or broker with your finances, a property management team requires that same level of confidence and strategy to thrive. Samantha forecasts the legislative hurdles on the horizon but stands ready with her expert hat on to guide both seasoned and novice investors through the property investment terrain. 

When the path gets thorny, remember, expertise like Samantha's is your best compass.

If you have any questions or scenarios you would like us to discuss on an upcoming episode, please email samantha.eason@exclusivelymanaged.com.au or visit https://www.exclusivelymanaged.com.au/

Transcript

Speaker 1: 0:33

Hi, it's Samantha Eason here from Talking Property Management and, being that it's the first of March 2024, we'll start this year with our first podcast. I'm very excited to be back. It's been a very busy end to the year and start of 2024. And to be a little bit controversial today is probably the best way to come back into podcasting and for all of our listeners. I think what we should start on is something that has happened this week within the property managers and, I guess, real estate industry online about our premier's latest and one of his social media posts that he put up this week. So Stephen Miles mentioned on LinkedIn or Facebook it appears Facebook that we're bringing in a code of conduct to crack down on dodgy real estate practices and protect renters. We're also banning rent bidding and cracking down on dodgy property managers. Renters deserve a fair go and we're going to make sure they get it. This is very frustrating because renters have a fair go and rent bidding is banned. So I would, if you're still finding, as a premier or as a government, that there are agents that are still going outside of the act, use the Office of Fair Trading, which is what they're there for, to take down those agents and agencies. It's very annoying that, unfortunately, they still don't quite understand that this is what the legislation is, and I think that's one of my biggest concerns with the government making these legislation changes. On our first set of reforms, they tried to change things that were already in the act, so they're not even aware of where and what it is that agents are required to do and legally mandated to do. I don't disagree with some of the portions of the act. It's unfortunate that we have millions and billions of dollars in a trust account for bonds and they're going to look into giving tenants more bond money. Now are you going to enforce that? A tenant is going to leave the property in a good state of repair, so are they even going to take in any feedback from property managers regarding those specific tenants, or are they just going to assume that everything is fine and all organized, ready for a full bond refund?

Speaker 1: 3:43

It's one of those things that I just don't quite get, and I need to stress this for those who may be under the impression that the Labor Premier is right. We aren't to blame for the cost of living and property prices increasing. That isn't a property manager's fault. It's also not something that they can look at and change. That's, unfortunately, how a market works Investing in property in Queensland. It is a free market and I feel that the government are doing what they can to take away from what it actually is. I don't know why they haven't realized this, but training is so incredibly important for any business.

Speaker 1: 4:38

But the untrained or unskilled property managers aren't to blame, it's the principles and management team of those property managers, and I'm speaking from experience. I hit a pivotal moment in my career a few years ago where I felt that I had learned everything I needed to learn, but I knew that there was more that I needed and I went to a franchise agency because I expected to be trained further in my career and that franchise didn't even do any training with their staff because they didn't want to spend the money. That is majority of professionals. They don't want to spend the money on their team, they just expect the results and unfortunately, there are a lot of unskilled, unexperienced property managers out there managing investors, properties and portfolios. A lot of investors believe that if they go with a certain agency or franchise or name, that they will get really fantastic results and unfortunately, speaking from my experience, those are usually the properties that I pick up from those managing agents and look after because they aren't receiving the correct experience and management of their investment property. Speaking from first-hand experience, again, I have seen hundreds of investors not be guided the correct way, including not even meeting minimum housing standards and not having proper management strategies in place. And if you don't believe me, have a look at all those properties that were purchased over the last two, three years that had tenants in there. The owners realized that they weren't getting the rent that they needed. They weren't in a position where they could update the property to get market rent, so they sold the property. And those people in turn who have purchased the property are either owner occupiers or investors who do have the money. Obviously, money is a very crucial point to that. However, it comes down to the strategy that the investor is being informed of and kept to. Without that strategy, the investment suffers.

Speaker 1: 7:20

I have seen principles and management leaders take it out on staff when maintenance is required and owners leave the business because they don't want to spend money on the property. It is a general rule of thumb that a client depending on their portfolio, but let's put it in the median of $600 to $700 a week in rent is willing to spend about $2,000 to $3,000 a year on maintenance. That's a general rule of thumb. That doesn't include anything major. But if that client isn't willing to spend that amount of money, they shouldn't be investors. If you can't afford to keep it as an investment, don't be an investor, but don't whinge and complain and leave the agency that you're with when they report maintenance to you.

Speaker 1: 8:17

If you're the principal or management leader that's taking it out on the property managers, that's another situation. That can be another episode. I have even seen real estate agent professionals, investment properties, owners of companies and their homes not meet minimum housing standards, not have correct maintenance completed or not complete maintenance at all. One in particular, I remember, had copious amounts of wood rot through the property and they just weren't willing to repair or fix any of that. I've collected keys from agencies, but in this particular situation it was a franchise agency where the entry condition report wasn't even provided to the tenant and they didn't even have one on the file. The most important document is the entry condition report and unfortunately, when you don't have one and it isn't completed properly or it only has a few photos per room attached, that's where there is an issue when you're in a situation where your property manager isn't managing your property correctly.

Speaker 1: 9:44

You need to leave. If you're not getting market rate rent, especially in Queensland at the moment, you need to leave that agency. It is not doing you or your tenants or your investment or your future any good. If you're just staying with someone because it's too hard to leave or it's just not that easy, they're fantastic. The issue isn't that. The issue is you've got an inexperienced property manager team or agency managing your most valuable asset. What is that asset worth to you?

Speaker 1: 10:26

I spoke to someone last year who wanted to manage their own investment. They wouldn't sign a Form 6, but they wanted me to look into tenants for them. We legally are required to have a management agreement in place, even if we are just finding tenants for the agent, like for the owner and her investment property is worth $1.3 million. She wanted to manage it herself.

Speaker 1: 10:51

There is too many legislative changes, past and present and upcoming for a client to be completely aware of them, and as well proactive results. For example, they are talking about keeping the property at the same rent not just fix it to the tenancy, but fix it to the property for 12 months. The only reason they're doing that is because the government one hasn't got enough housing for the area for Brisbane, whatever state that you're in, so they are forced to take their anger and their frustration out on the investors who are supplying the housing. But secondly, what is the proactive solutions that that owner is putting into effect? Is it anything similar to no more six month leases from now on within the agency, even though the legislation hasn't changed and hasn't passed? There is that possibility that they will make that a thing. I assume as well with that that they won't be allowing that to stand for any property that's been renovated and updated. But we'll see. I have faith in that. The REIQ will stand by their team, which is our property managers, the professionals within the industry, to do the very best for them.

Speaker 1: 12:22

They do go to these meetings with the government, but there's just something not making sense with what is currently happening and it doesn't fall on the property manager to fix it. It's not the cause of it. Stephen Miles, for example. He is getting fed this information, so it's his team that aren't researching this properly. But you can't put all property managers in a basket and say that you are the fault and you are the problem, and this is why this is happening, because that's not what happens. It's not the property manager's fault that the market moved. The property manager's fault is that we don't have adequate housing available for struggling families. It's not our fault that the cost of living has risen and that's why people are struggling, and it's also not our fault that the mortgage repayments and interest rates have increased, which is why investors and clients need to have their property at market rent. That's not our fault. We have incompetent members of government taking control of situations that they have no understanding of and have no audacity or you know the audacity to admit that their precesses mucked up. They made a mistake. That's the issue.

Speaker 1: 13:56

When Steven Miles put this post out online this week, I've seen several of Professionals within our industry have their peace, have their say on his words and and it's the supply of housing that is the issue Various people have said it. Also during this week, I've seen probably the most Requests for property managers in our community people putting a post up that they need a new property manager for their team or their agency. That says a lot about our industry. Property managers are leaving. They do not like how they're being treated, whether that's in the workforce or Within the, the agency and the environment that they're working in but also they're not getting paid enough. They're getting abused daily. It's not a fun role to be in right now when that is happening.

Speaker 1: 15:04

You need to realize that, that your strongest property managers are those that have no staff leaving, those people who are willing to go out of their way to help an investor grow a portfolio, actually use a strategy like you would with a banker, a Broker or a buyers agent.

Speaker 1: 15:27

They all have strategies that they use and no matter if your investment is in stocks or it's in property, there's a strategy with it.

Speaker 1: 15:39

If you are one of those investors without a strategy in place and you don't have the faith that your Property manager, your team, is putting towards that strategy, that's where there's a situation and that is probably something that a lot of investors aren't aware of, but they really need to be. I want to say a quick thank you to everyone for listening today. I know it is a short episode, but nonetheless it does get my frustrations out about the incompetence members that are controlling our legislation and Industry changes without any idea what they're doing or who it actually affects and what is involved with the day-to-day of that person or that group's role. We're going to have a continuous roundabout of these issues being present in five years time as well as 10 and unfortunately, it affects property managers, it affects investors and it affects the industry that you have invested in. Again, thank you very much, and I am Samantha Eason Talking property management. I'm the principal and property Investment specialist at exclusively managed, so if you have any questions, you can contact me directly. Thank you.