The title of ‘landlord’ likely doesn’t sit that comfortably with the average millennial – especially during the current Australian housing crisis. Landlords tend to cop a lot of flak in the media – regularly portrayed as greedy and uncaring.
But recent data tells us millennials made up 46 per cent of new property investment purchases in the last year, making them the new generation of landlords. So, it’s no wonder the term has gone through a more socially mindful re-brand to ‘rental provider’.
You can be a savvy property investor and have a social impact.
While buying property is a great way to build equity and financial security, it can be hard to come to terms with being a landlord if you or your friends have experienced rental increases, poor property maintenance, or just general lack of care from a rental provider in the past.
The good news is rental providers can enjoy both sides of the coin: you can buy an affordable property that delivers financial growth, and maintain your moral compass as you manage your investment.
Find a property manager who gets you.
Having a property manager who’s on the same page as you helps ensure your investment is managed in a way that aligns with your values, explains Australian Landlords Association national president Andrew Kent.
‘Property managers are the ones who let you know what a fair price for your property is – based on the market price in that location – and assist with tenant selection,’ Andrew says.
To boost the feel-good vibes, you can consider engaging an ethical property management agency, which works with property owners to help achieve their financial goals, while also respecting renters’ interests. Kristina Kourtis is a property manager at HomeGround Real Estate, one of Australia’s first ethical property management agencies.
‘We provide the same level of service as any other real estate or property management agency, but we reinvest all our profits back into the community to help end homelessness,’ she says.
Consider lowering the rent.
It might sound counterproductive to your financial interests, but Andrew says keeping a quality tenant can save a lot of money in the long term by reducing turnover costs and minimising vacancy.
‘Worst-case scenario, a rogue tenant can cost you an absolute fortune,’ Andrew says.
‘In my own case, we’ve got some good tenants and want to keep them, so we charge less than the market rate.’
Kristina says affordable housing is defined as less than 30 per cent of a person’s income but very few properties fall within this range for low-income earners – increasing their hardship and the risk of experiencing homelessness.
‘Affordable rent, meaning 10 per cent or more below full market rent can make a big difference to a low-income family – and you can claim the discount as a tax deduction at the end of the financial year,’ she says.
Get on good terms with your tenants.
A good relationship with your tenant doesn’t cost you a cent, but it can be highly valuable for an investor.
‘Satisfied tenants are more likely to stay longer, minimising turnover and vacancy periods,’ says Kristina.
Your property manager will take care of a lot of the direct communication with the tenant, but there are still things rental providers can do to let their tenant know they’re valued, like responding quickly to concerns, listening to feedback, and offering seasonal gifts.
Be quick to fix.
‘Getting on top of your tenant’s concerns quickly shows you care about their enjoyment of the property,’ says Andrew.
‘We respond to appliance repair for our tenants faster than we do in our own home,’ he says.
A fast reaction to issues is also good for your investment because it means you can nip problems in the bud before they become a major (and more costly) drama.
‘If it’s something like a leaking pipe, you want to get onto it quickly or it will cause you bigger problems,’ Andrew says.
How much can a landlord increase rent in Australia?
Rental providers have expenses too, and sometimes it is necessary to raise rent to help compensate for this.
Laws on rental increases differ between states. While there is no regulation on how much rent can be increased by, each state requires a notice period for the tenant and there are limits on how often rent can be raised.
What has caused the Australian housing crisis?
An undersupply of social housing and lack of affordable homes has forced more people into the private rental market, causing rental affordability to reach an all-time low.
‘The only solution to this crisis is for governments to work together to invest in more social housing with support for people to access and maintain that housing,’ says Kristina.
While work is being done at a state and federal government level to improve renting and home ownership across Australia, there is always a way to have a social impact within your own investments.
Are you ready to invest?
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This article is prepared based on general information. It does not take into account individual financial objectives or needs and is not financial product advice.
