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Discover the secrets of successful property management and investing on "The Property Investors Handbook" podcast. Join Colleen Sutherland as she shares expert insights and strategies for acquiring, managing, and maximising returns on real estate investments. Whether you're a beginner or seasoned investor, this podcast is your essential guide to navigating the world of property investment. Tune in and unlock the keys to financial success in real estate.
Produced by Pod Pro Australia
Welcome to another episode of the Property Investors Handbook Podcast. I'm your host, Adam Bell. And today, again, joining me in the studio is Colleen Sutherland from Sutherland's Property Management Group. Now today we're going to discover how you can become a tentative choice and increase your chances of securing a lease in this competitive market.
Colleen, so great to have you with us.
Thank you, Adam.
Now, look, we did an episode a couple of weeks back, where we were talking just about how tough the market is for tenants, especially here in Southeast Queensland. And, you know, where it's so competitive, the rents are high. And we're getting, you know, a lot of people coming in and, you know, applying for tendencies, especially a little while back.
So could you start by, Explaining to me, what do property managers look for in an ideal tenant?
What they're looking for is to make sure that you can afford the place, that you can, you are who you are, and that you can look after the place.
Okay. So they're the three keys.
That's right.
Okay. So how does a tenant, so really being employed and being able to prove you're in, let's look at these one by one, being able to prove that you, you can pay what, how is there a.
Is there a mathematical equation you look at income versus rent?
There is. So, what we have to do when you do your due diligence for insurance purposes, is to make sure that the tenant can afford the property. That's first and foremost. The equation is that we cannot take more than one third of your combined income.
Right. I've heard of property managers saying, Oh, well, in this market, we should be increasing that to 40 percent or 50%. And it's like, well, it doesn't work like that. So a third of your combined income is One third goes to rent, one third goes to living expenses, and then one third is your money.
Right, so if we break that down, if you're looking to try to get a house that's a thousand dollars a week, your combined income needs to be at least three thousand for a week.
Yes. Right. Okay.
Which, there's a lot of people that aren't up to that in today's market. Yeah.
So this is where, in that episode we talked about just how difficult this is with them rising so quickly, and wages not rising anywhere near that. Yeah,
that's right. So, we do have to take into consideration the cost of living, which is totally out of our control.
So that forms part of everything.
Sure. Okay. What are maybe some common mistakes that applicants might make when, you know, that could hurt their chances when they're trying to secure a lease?
Sometimes. It's not telling us the truth.
Right, fibbing.
Yeah, so we do have ways of doing that due diligence.
Finding out. Often it can lead to, hang on a minute.
Can you tell us any of your secrets?
No. The ones that, tell me that they get X dollars, but then they get XY dollars because they clean on the side, but it's only cash and I can't prove it. And I can't take that into consideration. I have to be able to prove that you're getting XY dollars.
Yep.
Clean. On paper. Yeah.
Properly.
Yep.
Okay, so fibbing about, the money. What else could hurt someone's chances when,
a previous tenancy. So when we have to issue a notice, a breach notice, whether it's for rent arrears, it's noise, whatever, that forms part of their rental history. So one of the questions that we get asked by another agent is, have you had to issue breach notices?
And that's where we like to be honest and say, yes, we've, issued for rent or unapproved pets, unapproved documents, whatever they've had a breach for. We have to reveal it. So it has to be revealed to that agent. So don't do that during this tenancy.
Should someone applying for a property disclose that to you during the application process?
Would that help them at all?
It would because if you've got a rental arrears, it could be a period of time that you were out of work, that you were injured, whatever it might have been. Hardship of some sort. Yeah, of some sort. And hardship does have its place in legislation as well. So, but they wanted to work through it.
We had to issue notice, a breach notice, simply because that's due process. and then work through them on a payment plan, whatever. So when we get a due diligence, we will look at the ledger card from the previous agent. And if there is gaps of paying your rent, that's where we will pick that up to see, hang on a minute.
Sure. Yeah. Okay. And if you've disclosed it and given us a reason and that sort of thing, then. it will be taken into consideration. Great.
Okay, so you get a new property on your books, you go to advertise, it's a hot property, it's at a good price, you know you're going to get a lot of interest and applications.
There's a few in that That group who, for whatever reason, really want or need this property, you know the timing's exactly right. It, it's at a price they can afford. They can't get anything else. How do those ones make their application stand out? How do they get themselves in front of the line, you know, at the front of the line, you know, with with you to give themselves the absolute best chance?
Legislation changed yesterday.
Yesterday,
yeah. On the 6th of June. That indicates. We cannot take more than the advertised rent. So what was happening was tenants were their own worst enemies, but I can understand out of sheer desperation would offer you an extra 10, 20, 50 a week to get the property. And of course the landlord, if we put the applications to the landlord, of course, he's going to take the highest one if we've done the due diligence and yes, they can afford it.
However, it's considered. in the eyes of the powers that be as rent bidding.
Yep.
So rent bidding has always been outlawed. So I can't say to you, give me an extra 20 bucks and I'll make sure you get the property wink, wink.
Right. But in reality, the tenants have been able to do that and we
can't take it anymore.
As of now. Wow, so
legislation changed with lots of different things and that just so happens to be one of the changes that is going to be really frowned upon.
I can imagine and make things very, so you, especially for you, so you've now doing your, your rent appraisal. It's going to be What you go at is what it's going to be.
Yeah, so so you want to get it right.
It's not necessarily the rental appraisal, because that is an average. It's what we advertise the property to be. So we have to be very careful of tenants offering more money than what it's advertised as.
Right. Yeah. Okay. So, coming back to my original question then, how to get yourself at the front of the line, your answer up until yesterday would have been, well, offer a bit more.
I wouldn't have said offer a bit more, no. Well, you but that, but in reality, in reality, that's what would
have got them there. What's it going to be now?
It's, what it always has been for me is that you need to prove who you are, that you can look after the property and that you can, So, it goes back to the basics.
But at the same time, your application, when it comes into me, needs to have all its I's dotted and T's crossed. So don't just tell me it's Joblo Real Estate. And then I'll have to look up all the phone numbers, all the emails. Because this application over here has already written all that, so I'll just put that one aside and go to this one.
I need to have one that makes it relatively easy, so you've got all your information that the application is asking for, and it's asking for it for a reason, and that's the main reason. You've got to, have, Any character references would be great. If you're self employed, you've got particular information that you give us.
So having your application completed is great. The other thing is at the inspection, be polite and courteous to the property manager who's opening the house, even if she's not polite and courteous because she's stressed to the eyeballs. That's really important because that will sort of first impressions.
are great. And if you're not pleasant, is that how you're going to be for the entire tenancy? And do I have to put up for that for six or 12 months? So, yeah, what
a great tip. And, You know, it's human nature, isn't it? If you, if you like the person that you meet at the inspection, surely that's going to give you an advantage.
Yes. And
don't park in the driveway.
Don't park in the driveway. Did you get that? Listen to that again. Do not park in the driveway.
And there's a little
thing that some people wouldn't, you know, might not even think of.
I know. And if you need to bring your children and you're looking at a lot of properties, and they're young, just keep them under control because we're going to look at them and not necessarily make a judgment, assess that, yes, they're lovely kids or whatever.
So just lay low on the children at the inspection.
Sure. Is how you're dressed and how you appear, it's, I know in legislation it can't be, but again, human nature. Yeah.
It is human nature, yes. Yes and no, because you could get the tradie who's on his way home from work and I'm just going to drop in and see it.
Not necessarily, but you want to present yourself in the best light as well, I would say, but that's, it's not the be all and end all, but be as presentable as possible. Yeah,
sure. Okay. And, how important is the tenant's credit to the business? History, is that looked at in any way, shape or form?
Yes. Yep. Okay.
So, but not by all agencies. So, they may not take into consideration that. When we do our due diligence, part of it is not the whole credit score because, um, that's But, private information. Sure. But if we're looking up that you're self employed and you owe this much money to, you know, Joe Blow down the street, and we find that out, then yeah, or you've been a discharged bankrupt, we do work around that as well.
So yes, your credit will form part of the due diligence. Sure.
Well, look, this has been a really cracking episode for any tenant who is, you know, going to be looking for a property. And I think the key thing for me is what you've said about what changed yesterday. You've no longer got the ability to offer more, uh, to get yourself at the, the head of the line.
It's not necessarily you have the ability as the tenant, the agent can't discriminate and is not meant to accept more money than what is advertised.
Right. So understanding that is now, now key and realising that all the other tips and tricks that we've heard about today really are going to be, you know, very important if you want to get that, that property that, that you're after.
So, these tips can greatly enhance. your appeal to property managers and help you secure, you know, your desired home. But look, as always, Colleen, some fantastic, advice and, and tips here today. Head on over to spmg. com. au for more. You've been listening to the Property Investors Handbook Podcast.
Join us next time for more tips, more tricks, more advice on Everything to do with property management. And look, if you're out there and you're after, a property manager that goes above and beyond, who's got personal services, a boutique agency, who's been doing it forever, you know, Colleen and her team at Sutherland's property management group are definitely the people to see.
Colleen, thanks once again.
Thanks for that rap.
It's the truth.