The Reality of Real Estate | Colleen Sutherland: Sutherlands Property Management Group | EP06

In this episode, your host Rob Verhoeve welcomes Colleen Sutherland into the studio. Colleen began her career in property management in 1989 and opened her own agency, Sutherlands Property Management Group, in 2004. Rob and Colleen chat about the undeniable passion she has for investment property and the ability property has to open opportunies, create wealth and help people reach their own freedom in life.

You can find the full video podcast on our YouTube channel @mybusinesspodcast

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Speaker 0 (0s): This podcast is brought to you by Media eight.

Speaker 2 (6s): Welcome to the My Business Podcast, where we sit down with local businesses and we talk about who they are, where they come from, and what inspires them to be in business.

Speaker 3 (20s): So today we have with us Colleen Sutherland from Sutherland Property Management. Welcome Colleen to the Pod Fire Studio.

Speaker 4 (28s): Thank you so much. Excited to

Speaker 3 (30s): Be here. Yeah, it's excellent to have you in here because you are from an industry property management, that is something that I think a lot of people are really interested in, whether they're home owners they're looking to buy, whether they're renting or they're looking to rent, there's, you know, across the board there's so many different elements to what you do. So we've said what the name of the business is, but tell people what you do. In the broad sense.

Speaker 4 (51s): In the broad sense, the agency is predominantly commercial and residential property management. We do have a sales arm, which sort of came to us by default if, if you will. Yep. And it's about the experience of property management and that's both being a client, the landlord, the owner, and a tenant. Or the buyer. They're the customer.

Speaker 3 (1m 17s): How long have you been doing this for? Now I know your history and this is a lot longer than Sutherland Property Management, but tell us a bit about that history.

Speaker 4 (1m 25s): So I, I fell into the job when work was abundant and did like the interaction with the tenants. Yep. And then worked for quite some time, excluding time having babies. And then I hurt my knee, so I left. Yep. And then by default, I started my agency in June, 2004.

Speaker 3 (1m 51s): June, 2004. Hang on, I'm doing the math. So we're nearing 19 years now. Yes. You must be doing something right to be able to still be smiling too.

Speaker 4 (1m 60s): So doing something Right, but also being an independent business, which is really difficult in this age of big agencies and not just talking about franchise agencies. There are big mega agencies out there. So remaining more, not that cookie cutter type agency where we've got the room to have more of a tailored experience on all aspects of property management.

Speaker 3 (2m 26s): I love the way you say that, that tailoring of the experience, because that's what stands somebody out against the next person, isn't

Speaker 4 (2m 31s): It? Yes. Yeah. So we are not for everyone. I get that because we do have a more in depth approach to everything in property management. So, and it doesn't suit everybody, but we do try and tailor it with all the different aspects of, well, the personalities of, of the people. So

Speaker 3 (2m 54s): Yeah, I've heard that you've got a little bit of a personality yourself. So we hopefully we'll see a, a little bit of that, of that in the next 20 minutes or so. You're situated in Burley,

Speaker 4 (3m 5s): Correct?

Speaker 3 (3m 5s): Yes. Whereabouts do you service though? What?

Speaker 4 (3m 8s): Well, because we're close to the border, we do go down to Kings Cliff, Karina, and then we go as far north as Brisbane. Yep. I do have one in Burpengary, but while it's a broad spectrum, we do work so that when we go to these properties, they are in a zone and then they're all looked after the

Speaker 3 (3m 30s): Same. So one question that I always like to ask is, what gets you up in the morning? What makes you want to do what you do?

Speaker 4 (3m 37s): For me, being the principal, for me it's continuing learning myself. Cuz I do really enjoy that aspect of it. So I'm going into another little arm at the moment and it's the study, it's the being able to service them and giving people the knowledge, my knowledge and my experience. And to be able to, you know, portray that over to the To your clients. Clients. Yeah. And, and tenants. So yeah.

Speaker 3 (4m 7s): And that's obviously on a day-to-day basis you are, you are dealing face-to-face. Your name is on the business. It is. So yes. How many people do you see like in a week? Is it, are you just constantly talking to people about property?

Speaker 4 (4m 20s): Yes. Yeah. And you're at a barbecue and having a few drinks and someone goes, yeah, so how's the market going? And you're like, not a good time to be asking me. Yeah. Yes. But through the week and, and it's a shame we don't see people face-to-face as often as I would. When you see people face-to-face, you do get a quite a different dynamic. You get a different, you can often get a different outcome because you don't have that Mm. Reading that tone into that email or, or whatever. And then with my personality, yep.

Yeah. People can sometimes mistake that for being rude, but I'm not. No,

Speaker 3 (4m 55s): No, no. But you've gotta, you've gotta have fun too. I mean business is business but you know, your personality is you. So. Yes. And I think that even in the short time that we've been speaking previous to we hit the record button, the one thing I found is that, you know, you're energetic, you're excitable, you like doing what you do. So I'm guessing that you love doing it. Do you love property?

Speaker 4 (5m 14s): I do. I do. And I'm a property owner myself, so I've got investment properties myself. So I can understand too where people are coming from sometimes and, and that also brings a different perspective as well than other than, well this is my textbook and, and this is my rules and regulations and we're gonna go back. It doesn't quite work that way.

Speaker 3 (5m 36s): Well it's gotta be in every business, doesn't it? Because if you don't love what you're doing, how do you sell that to someone as being something that they need? Yes.

Speaker 4 (5m 43s): Yeah, exactly.

Speaker 3 (5m 45s): Do you find it easy getting new clients?

Speaker 4 (5m 49s): I can do and it's attracting the right client. So like I said, we are not for everybody. So I don't particularly want the, the people who are just looking for a certain business model. Yep. We have a specific business model, we are structured that way and it can be quite unique to what some people are used to.

Speaker 3 (6m 11s): So you get a new client. Yes. What is the process that you have to go through with that client?

Speaker 4 (6m 15s): Okay, so it depends on if they're coming over with a, with a tenant or they're coming over as it just bought it. So it depends on the type of landlord there are. They're they're, they are. So there's professional landlords who are a particular personality type and they want this done, they want it done well and I haven't got time. Yep. And that's, they're great. There's mom and dad investors who think that well let's dabble in that market to make some money for the future.

So when they come on board we have a different approach to onboarding them as as a landlord.

Speaker 3 (6m 51s): So you are teaching these people about, about the whole industry, aren't

Speaker 4 (6m 54s): You? Yeah, there's a lot of education. Yeah. So, and then there's mom and dad, investors, accidental investors.

Speaker 3 (7m 2s): I saw that on your website. Explain more what an accidental

Speaker 4 (7m 5s): Investor is. So an accidental investor is if they've gone to sell their property and haven't been able to achieve their price Yeah. And don't, can't afford to or don't want to sell at the reduced price, then they rent it out. Yep. Or if they have a job transfer, quite often it's employment transfer and they've gotta go into state and again, they don't want to sell, which you know, on the Gold Coast, why would you? Yep. That's right. But yes and they want to come back to the house. So they then need a lot more education that when they're packing up their home to go and live in Darwin.

Yep. They have to pack the emotion away at the same time and then that house becomes a little mini business for them. And it, we have to structure it that way.

Speaker 3 (7m 52s): Emotion is a huge thing in real estate isn't it? And

Speaker 4 (7m 55s): It

Speaker 3 (7m 55s): Is. Do you see that? So I see a lot of emotion in people when buying and selling family homes. Yes. I've seen that in the past in incarnations of what I've done. But does that translate into the rental market as well?

Speaker 4 (8m 6s): It does because the tenant, they're, whether they're there for a, a specific purpose and period of time, they're just there for 12 months cuz my job's brought me here or they're making it into their home and want to stay long-term. And then the landlord's circumstances change and they either have to move back in. Yeah. They need to sell whatever that change is. We are dealing with the tenant and their home and that's their emotion and the landlord and it's a business transaction.

So we have to coordinate the two to have a win-win outcome. Especially at the end of a tenancy or with the landlord not happy with the way they're parking on the lawn or or whatever. It's

Speaker 3 (8m 52s): Variety of different things.

Speaker 4 (8m 53s): A lot of different Yeah. There's a lot.

Speaker 3 (8m 55s): I guess this is what you're talking about when you tailor each individual Yes. Situation to Yes. To a different need.

Speaker 4 (9m 3s): Yes. So we do have a a, a book of rules and it's called the Residential Tendencies Act. Yep. That we must adhere to. Yep. And the tenant is required to often not be pulled in line, I don't like that term, but to be educated. Yeah. Educated that at the end of the day, this is the landlord's property. Yeah. They hold all the risk. So if you are have all that timber up against the house and you're gonna build a dog house and I'm telling you to move it because that timber will attract termites.

Yep. And then all of a sudden there's a bit of a ruckus. I need to be able to educate the tenant as to why you can't do that. And I need to pull that into into line. So

Speaker 3 (9m 48s): You're kind of like a magistrate as well?

Speaker 4 (9m 50s): Yes.

Speaker 3 (9m 51s): Or not, not a magistrate. What's a mediator?

Speaker 4 (9m 55s): Yeah. Ver negotiation. That's what yeah. In this industry.

Speaker 3 (9m 58s): Well we all know negotiation is part of real estate. Yes. But I guess we look at it from the point of view of I wanna buy that house or I wanna rent that place or whatever. But you are that person in the middle. Does that, does that ever get sticky?

Speaker 4 (10m 9s): It gets very sticky at times. And that's because again, when the tenant will look at the place as their home Yep. And make it their home, how far they go with doing that is another story. Yep. And then the landlord, especially if he's an accidental landlord and he's had to move out and he's gonna come back. Yeah. They don't want you doing certain things

Speaker 3 (10m 35s): Because when you're selling real estate, you are obviously selling a property to a person and the person that's selling the property pays the commission. Right. So it's quite easy to see the, the lineage on who the client is. But for you, the client is actually, you've got two clients for this one property, don't you?

Speaker 4 (10m 52s): We do, but it is the same with selling as well. So you are guiding the seller to present the property in its best light, but also make sure that their property is not going to get all the way to a contract and then fall over because you know you've got a water leak or something. So I would encourage the seller to have their building and pest done, fix anything that needs to be fixed so that it doesn't fall over at that stage. Or understand that when the time comes you may need to negotiate that sale price to reflect whether it's changing carpet, fixing the leaks, all that sort of thing.

And it's the same with the tenants. So when we are, let's just say we are renewing the tenancy agreement and we've got the same tenant. They've been there for two or three years, which is, well on today's markets, often not long. But if they've been there for that period of time and the market is indicating this rent, you know, just, let's just say for example, $800 a week. Yep. And we are renting this place at $650 a week. There's an increase of $150 a week on today's market.

So we negotiate with the landlord and the tenant the reasonable price to increase it. So if you want to put it up, you just run the risk of the tenant moving out. Yep. And then you've got the risk, then you've got the downtime vacancy cost to relet. So often it's, it's just as good to negotiate with the tenant to keep it at a more reasonable price to maintain the tenant. Especially

Speaker 3 (12m 27s): If they've been a good tenant and keep property in good condition, isn't it? Yes. Yeah. Yeah. You said you touched on something before about the rental Tenant news act. Yes. Now we've seen some massive changes in that over the last few years. How's that affected you and your business?

Speaker 4 (12m 39s): We've just had one that started on the 1st of October with stage one.

Speaker 3 (12m 44s): Stage one. Or how many stages are

Speaker 4 (12m 45s): There? I think there's gonna be about three. Ooh. So there's a new stage coming in on the 1st of October this year, which will be minimum housing standards for a certain sector next year there'll be more, more people will be involved in that minimum housing standards. But also they're also trying to introduce other things, not necessarily in the landlord's favor, but this one that we had in on the 1st of October, we were able to minimize the impact of that for both the landlord and the tenant.

Speaker 3 (13m 18s): So does that come back to you again educating because a lot of people were scared because they'd listened to the media and real estate is a massive one that everybody listens to the media, you know, auction clearance rate everything on a Monday morning. Yes. So is it as bad as it sounds or is it just get the right agent and they'll help you through that?

Speaker 4 (13m 35s): Yeah, so what we would've received, but long before they were introduced on the 1st of October, was the training. Yeah. And, and the understanding. So you can sit and read the piece of legislation, but then you have to interpret that piece of legislation and that comes down to all the new pieces of legislation that came into effect. So yes, it's always educating. So we go out and get a high level of industry training and then we have to come back, break it down into being able to relay it to both the landlord and the tenant.

Speaker 3 (14m 11s): And is it the same for commercial? And I know obviously the, the housing part of it will be different, but are you always learning more about the commercial side of it as well?

Speaker 4 (14m 18s): Yes. So I, I don't, I don't particularly just stick to the piece of legislation. I will go out and I'll understand what it means to have a body corporate situation in the commercial space. Yep. Because in the commercial space is different, different to the residential space. So yes, there's a lot of learning beyond just that piece of legislation because there's so many. So in commercial they'll be zoning for the council and what you, what businesses you can and can't have there.

It's body corporates, it's parking, it's what you can sign each. It's just, it's a lot. Whereas it's not just a matter of here's a tenant, move him in, see you later. Let me

Speaker 3 (15m 3s): Collect the rent. Yeah, exactly. Keep So yeah, going. What are some tips that you'd give people that are are looking, let's start with if you are a, if you own an investment property and you want to rent it out, what, what kind of tips would you give those people?

Speaker 4 (15m 15s): So it needs to have its street appeal for people. So when, when they're marketing it, their first inspection is actually Google Earth believe it or not. So where it is Ah really? Yeah. But to rent it faster it, it needs to be in good condition. So when you're living in a property and you see, you know, that door handles a bit rickety and stuff and you sort of put up with that because whatever Yep. You can't do that in in an investment property.

So you wanna have it in really good condition, you need to present it well and you need to have it priced well. So while the market is this ridiculously high market, there is still properties that are priced out of the market and every week that you leave your property vacant, you lose 2% of your annual income. That's right. So leaving it vacant one or two weeks and you're not getting the applications or the inquiry, then you need, and

Speaker 3 (16m 14s): You may as well have dropped your price by 5%.

Speaker 4 (16m 16s): Yes. But it pre, if it presents well it's where everybody wants to be, all that sort of thing. It's gotta be the price. Yep. Yeah. So it's the price adjustment that if after two weeks you're not getting the inquiry or the applications, then it's it you need to adjust

Speaker 3 (16m 34s): It. Now one on your website, I've seen a video about some tips for tenants that want to get a place. And I think that that obviously is really important at the moment because you know, a place goes up and there's might be 10 applications, what gets an application looked at,

Speaker 4 (16m 49s): You know it can be like 40 applications on today's market. Wow. And it's just, and I feel sad that we don't have enough properties to put everybody in, but when you are making an application, what we look for is that three things we look for that you're able to prove who you are, that you can afford the property and that you can look after the property. So they're three main things. And then

Speaker 3 (17m 14s): How do they do that? Like we can prove who we are. That's implication, that's easy. We can probably prove that we can pay for it.

Speaker 4 (17m 20s): Well when we are looking at whether you can approve it, whether you can prove it is that we rule of thumb is we can't take more than one third of the combined income. Yep. Sort makes it hard for single mums and and things like that. But yes, that's how we look at it. So the affordability is probably the first thing we look at so that we can go Yes, yes, yes, let's keep going with those. And it's so sad because there is a lot, lot of people who just don't meet that criteria.

So while you've got a property for rent and it's extremely high and they go, yes cuz I got nowhere to live, if you don't meet that affordability, it would be remiss of me to put you in.

Speaker 3 (18m 5s): And then the last bit you said is that you can show that you can look after the property. Yes. How do we do that?

Speaker 4 (18m 10s): So that will often come from a rental reference, either from an agent or a l a private landlord. Private landlords are a little bit more tricky to get information out of cuz they haven't kept a running log of the ledger card and and routine inspections. But if you are just moving out of home, you might need to get mom and dad to go guarantor or if you've just selling your home, your agent will be able to give you a reference of how well the property was presented. That makes sense. And yeah we can take those ones.

Speaker 3 (18m 42s): And then from the other side of the coin I guess in commercial property, is that another whole different set of things there that

Speaker 4 (18m 49s): Yes it is because that comes under business so I need to see your affordability because you know it's tenfold and, and they paid monthly. Absolutely. Yeah. So I need to see your affordability that you've been able to bring in sufficient income for 12 months, that you'll be able to afford the rent over that period of time. And it's got, as an agent, I can't take that on because I can't be seen to be doing financial,

Speaker 3 (19m 20s): Financial advice or advice or planning. Yeah.

Speaker 4 (19m 22s): Yes. So that's where it comes in with your solicitor and your accountant will be able to tell me that yes, your bottom line figure says this. So in there you've been able to afford the rent. There's not that ability so much to, for the looking after the property, it's more about money because when you move into a commercial property you need to make good or you don't get to bond back. So I'll get a much bigger bond on a commercial to work with at the end.

Speaker 3 (19m 50s): Makes sense. So for a property manager, what's the most important thing? Is it getting the properties or is it getting the clients to rent the properties

Speaker 4 (20m 0s): As a property manager? So it a property manager and a business development manager of a different roles. Okay. So your property manager is the person who's going to take care of the property. Okay. So they take care of what we call the three pillars. They take care of the profit, the property and the people and, and that coordination makes a successful relationship and it makes for a much better investment. So someone is looking after your investment, call it an investment cuz you're an investment investor, property investor.

Yep. However it's an asset.

Speaker 3 (20m 37s): Correct? Yeah, absolutely. So it's just a big

Speaker 4 (20m 39s): Asset. It's a massive asset. So what you want to do is to be able to choose the right property manager to be able to look after that asset because that's your asset moving forward. So that property manager needs to be able to look after the property as well. So there's certain things that we come outside the scope of what we do as a property manager and that's where, you know, there's someone in the business who is able to look a take care of things other than just your general maintenance. But we do property maintenance forecast, which you know Yep.

It's a couple of years old now and this tenant's gonna move out. I would budget, I would recommend you budget for painting carpet curtains of

Speaker 3 (21m 22s): Course cuz you've got the history and the knowledge of what happens over time. Yes. With that kind of

Speaker 4 (21m 25s): Stuff. And then the property also then includes boundary fences and hanging trees and body corporate matters and, and so there's so much more to what we do than just looking after just collecting the rent, just collecting the rent and fixing the leaky taps is what I call.

Speaker 3 (21m 41s): So that's awesome. Look, we've pretty much run out of time. Can you believe that time's gone that quick? I, I said to you before we started that I was really looking forward to you coming in because I think that the property market in general is just something everyone's interested in. It is. Yes. I actually would love to, I think it's something that should be a regular podcast people, someone should be doing a regular podcast on what the property market's doing, what and all the stuff that we've spoken about today on just on an educational piece for people. Because what has sh through to me today, and you talked very early on about the big franchises of real estate agents and we won't talk about names, anything like that because we don't need to cuz we've got Sutherland's Property management because, and it does bring it back to being a little bit more one-on-one, the things that have shown to me today.

Tailoring a solution for each person, you know, and because that is, that is the real, the real difference that you can make. Now the most important thing though is how do people get in contact with

Speaker 4 (22m 37s): You? I have a website and it's spg.com.au So that's Sutherlands Property Management Group. Yep. Dot com.au And it's, that's probably the quickest way to get in contact with us and you can get in contact with us through the Messenger services and

Speaker 3 (22m 54s): That sort of thing. So if you're watching this on YouTube, we'll have a link to that in, in the comments below so that that will cover that off. But otherwise just, I found it quite easy. I just put Sutherland's Property Management and it came up first. It was there and ready for me to go to. Yes. Yep. And look, Colleen, thank you so much for your time.

Speaker 4 (23m 11s): That's okay. You're very

Speaker 3 (23m 12s): Welcome. I hope that we helping me. Yeah, I hope we come in, come in here again and do something again because this has been fun.

Speaker 4 (23m 18s): It has. Excellent. My last, just one last thing that popped into my head was when you were talking about education, one of our taglines is education is the most cost effective form of risk mitigation.

Speaker 3 (23m 31s): I think you've just given us one of our little sound bites there that that is. But it it's true, isn't it? It's so, and it's so simple, but it's probably the first thing that gets overlooked by many diseases. It is, yes. So look, thanks again. It's been, it's okay. Absolutely brilliant. And I know that I can't wait to speak to you again one day.

Speaker 4 (23m 48s): Yes, sounds good. Thanks so much. Thanks.

Speaker 2 (23m 54s): Thanks for listening to the My Business Podcast, brought to you by Media eight on the pod fire platform. If you wanna be on our podcast, please reach out to the team on all our socials at my business dot.