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Speaker 1: Hello.

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Speaker 2: My name's Santasha Nabananga Bamblet. I'm a proud yr the

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Speaker 2: Order Kerney Whalbury and a waddery woman. And before we

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Speaker 2: get started on She's on the Money podcast, I would

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Speaker 2: like to acknowledge the traditional custodians of the land of

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Speaker 2: which this podcast is recorded on a wondery country, acknowledging

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Speaker 2: the elders, the ancestors and the next generation coming through

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Speaker 2: as this podcast is about connecting, empowering, knowledge sharing and

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Speaker 2: the storytelling of you to make a difference for today

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Speaker 2: and lasting impact for tomorrow.

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Speaker 1: Let's get into it.

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Speaker 3: She's on the Money. She's on the Money.

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Speaker 1: Hello and welcomed.

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Speaker 4: She's on the Money podcasts for millennials who want financial freedom.

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Speaker 4: My name is beck Syed and with me is Victoria Divine.

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Speaker 1: How good is salt and vinegar chip?

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Speaker 2: Ah?

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Speaker 4: I was wondering if you'd be finished that mouthful by

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Speaker 4: the time I'm talking.

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Speaker 1: Nearly finished the mouthful. That was quick. I'm very impressed.

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Speaker 4: It was not comfortable, no, very jagged going down, isn't it?

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Speaker 5: But there is no better combination than sultan, vinegar, chips

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Speaker 5: and watermelon.

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Speaker 4: Oh my gosh, okay, I wouldn't have thought, but now

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Speaker 4: they mentioned it, I can see yeah, because it's a

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Speaker 4: bit juicy.

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Speaker 5: I mean, you're not putting them in your mouth at

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Speaker 5: the same time. Okay, you've got like a little snack

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Speaker 5: of watermelon, which I do, and then you've got a

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Speaker 5: little snack of salt and vinegar chips.

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Speaker 1: Which I do.

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Speaker 4: Okay, got cha, gotcha?

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Speaker 1: Gotcha?

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Speaker 5: Anyway, were talking about.

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Speaker 4: Oh yes, okay, I forgot that we're doing a podcast

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Speaker 4: so va.

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Speaker 5: It's actually a food podcast now for real shit foodies.

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Speaker 4: Honestly, I'd be happy with that. So obviously, as you know,

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Speaker 4: we are living in a world where rental housing has

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Speaker 4: been increasingly converted into investment assets.

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Speaker 1: It has indeed, so we've seen.

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Speaker 4: Much debate in our lives in the broader community that

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Speaker 4: people shouldn't own an investment property till everyone has a house.

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Speaker 1: Spicy opinion.

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Speaker 4: I would tend to agree, but you know there's complications anyway.

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Speaker 4: So today what we're talking about is ethical landlords, so mean,

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Speaker 4: is it possible? Also, what are our Australian values around

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Speaker 4: renting and more globally, what's the landscape?

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Speaker 5: I think first things first, there was not one circumstance

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Speaker 5: that created our current housing christ sure, but literally hundreds

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Speaker 5: of years of contributing problems income inequality, colonization, car centric

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Speaker 5: urban sprawl, and urban renewal, to name a few. With

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Speaker 5: such complex societal problems, I just don't think that there

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Speaker 5: is a single solution that fixes absolutely everything back.

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Speaker 4: So can an ethical landlord, in your opinion, exist or

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Speaker 4: is this an Oxymoronah.

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Speaker 1: It's such a spicy opinion.

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Speaker 5: But there are so many different opinions on this, and

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Speaker 5: it really depairs on your personal values.

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Speaker 1: We can't answer that for anyone. Really.

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Speaker 5: At the end of the day, it is personal, and

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Speaker 5: that's the best part about it. You get to have

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Speaker 5: your own opinion, and our entire community is a sea

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Speaker 5: of different opinions and that's what makes us so beautiful.

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Speaker 5: But there are lots of things landlords can do to

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Speaker 5: be more you could say, ethical and help with housing

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Speaker 5: equality and access. In the second half of the show, Beck,

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Speaker 5: we're going to talk about things to consider as a

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Speaker 5: landlord to make the dynamic with tenants a little bit

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Speaker 5: more ethical, and also discuss the difference between a residential

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Speaker 5: owner occupier loan and an investment property loan, which I

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Speaker 5: think are important to understand when it comes down to

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Speaker 5: property ownership in general.

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Speaker 1: Okay, okay, okay.

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Speaker 4: As you know, Australia has very much had home ownership

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Speaker 4: as one of our cultural aspirations slash expectations.

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Speaker 2: Beck.

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Speaker 5: It is the great Australian dream after all. Well, exactly

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Speaker 5: everyone should own a property, right Beck. Well that's what

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Speaker 5: they say, it's what might be the authorities say it's

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Speaker 5: actually just our dads exactly.

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Speaker 4: But obviously rising housing costs, economic recession and demographic changes

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Speaker 4: have shifted that possibility in more recent history, and home

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Speaker 4: ownership isn't a priority for many other countries in the world.

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Speaker 4: Which countries are more rent happy?

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Speaker 5: And why it's actually interesting to dive into this, Beck,

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Speaker 5: because I think we live in our beautiful Australia bubble right.

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Speaker 5: We have these ideals that have been handed down from

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Speaker 5: generation to generation that we should own property. Right, whether

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Speaker 5: you do or don't, it's something that in school you

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Speaker 5: learned about. It's just something that is ingrained in our

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Speaker 5: culture in a way.

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Speaker 1: But that isn't the way most other countries are.

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Speaker 5: To be honest, like so many other countries actually have

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Speaker 5: this expectation that you will rent for life, And I

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Speaker 5: mean there's a lot to say around renter equality and

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Speaker 5: how they're treated and how in different countries there are

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Speaker 5: lots of different benefits like longer leases, etc. Etc. That

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Speaker 5: actually lean towards people being even more comfortable with renting.

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Speaker 5: But here are the top five rent happy countries in

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Speaker 5: the world. So Switzerland fifty six point six percent of

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Speaker 5: their population rent okay, Hong Kong forty nine percent, Germany

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Speaker 5: forty eight point one percent, Austria forty four point three percent,

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Speaker 5: and South Korea forty four point eight percent.

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Speaker 2: Beck.

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Speaker 5: However, there are also, I guess on the flip side

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Speaker 5: of that. When you keep going down and down then

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Speaker 5: down the list, you could start saying that there are

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Speaker 5: like people who own more than they rent. So in

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Speaker 5: Singapore only nine point seven percent of their community rent

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Speaker 5: oh Slovakia ten point seven percent rent, Russia twelve point nine,

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Speaker 5: Poland sixteen point three and Norway seventeen point two percent

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Speaker 5: of people rent okay.

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Speaker 1: Is that crazy? It is crazy?

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Speaker 4: So what data is out there about countries within ingreen

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Speaker 4: culture of property ownership?

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Speaker 2: Beck?

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Speaker 1: Because I'm a superherd.

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Speaker 5: Recently, in lead up to this episode, I was reading

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Speaker 5: an apps from a twenty twenty one research paper out

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Speaker 5: of America called Rental Tenure and Rental Burden.

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Speaker 1: Of course you were, yeah, of course, Savlos.

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Speaker 5: But I found it really interesting and I have summarized

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Speaker 5: it into four dot points that I can share with

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Speaker 5: you so that you don't have to read it for yourself.

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Speaker 1: Would you like me to do that?

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Speaker 2: Yes?

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Speaker 5: Please, So rentals around the globe accommodate for one point

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Speaker 5: two billion people. The data they found that the more

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Speaker 5: developed the country, the more people tend to rent, and

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Speaker 5: vice versa.

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Speaker 1: Ah.

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Speaker 5: This was most obvious in Europe, where formerly communist countries

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Speaker 5: have a high prevalence of homeowners. It is first and

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Speaker 5: foremost a cultural thing, but laws and regulations in certain

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Speaker 5: excommunist countries can make renting a nightmare.

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Speaker 2: Two.

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Speaker 5: While in Western and Central European countries like Switzerland and Germany,

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Speaker 5: around half of the households were renting in twenty fifteen,

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Speaker 5: in the czechs Republic, only two out of ten.

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Speaker 1: Households were choosing to do so.

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Speaker 5: Interesting in Russia and Slovakia, the share of renters is

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Speaker 5: even lower. Only one out of ten households didn't own

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Speaker 5: their home in twenty fifteen, and owning property is arguably

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Speaker 5: the holy grail of the Eastern European society, a much

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Speaker 5: coveted and highly valued right that was once taken away.

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Speaker 5: So long story short, the further east you go in Europe,

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Speaker 5: the more people own, and the further west you go,

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Speaker 5: the more people rent more or less.

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Speaker 1: That is so interesting.

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Speaker 4: I wonder why that is culture communism.

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Speaker 1: I wonder like about the developed nations.

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Speaker 5: And it kind of makes sense, right, The more developed

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Speaker 5: a country, the more people rent because property prices are

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Speaker 5: significantly higher. Yeah, and you think about this in high

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Speaker 5: density environments. And I think the best high density environment

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Speaker 5: that I think we all know about is New York, right,

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Speaker 5: So we all know inherently the New York property is cooked, right, Like,

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Speaker 5: no one in New York basically owns. They all rent,

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Speaker 5: and they do so because it's like a central business hub,

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Speaker 5: which is incredibly expensive to live in. So the more

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Speaker 5: developed your country, not necessarily talking about America in general,

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Speaker 5: it's just an example, but the more developed the country,

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Speaker 5: as we know, Switzerland is pretty good. YEA, like Switzerland,

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Speaker 5: they're bullers, they know so much stuff, like, they are

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Speaker 5: full of rich people as well, But fifty six point

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Speaker 5: six percent of people rent there because I'm assuming coperty

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Speaker 5: prices are astronomy.

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Speaker 1: App Yeah, so that makes sense. That does make sense.

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Speaker 1: And Australia we are billions years old.

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Speaker 5: Yes, but since the white people invaded Australia there has

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Speaker 5: been two hundred years of development, and that is so

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Speaker 5: little in comparison to the development that international countries have

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Speaker 5: had right around the world. It's been thousands and thousands

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Speaker 5: of years. And now Australia is kind of going, oh,

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Speaker 5: actually we're becoming incredibly developed and land is becoming a

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Speaker 5: resource that is actually limited, whereas before with our population

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Speaker 5: and how big our country was. It's a great Australian

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Speaker 5: It's very easy to buy property as cheap as chips.

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Speaker 4: Sure not anymore, not anymore. This is a really good

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Speaker 4: time to go to a quick break.

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Speaker 5: I think we should go to a quick break before

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Speaker 5: we get real heated.

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Speaker 4: Yeah, I think so. On the flip side, we're going

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Speaker 4: to be discussing the difference between a residential owner occupy

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Speaker 4: alone an investment property loan. Sounds fun, plus some things

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Speaker 4: to consider as a landlord to make the dynamic with

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Speaker 4: tenants more ethical, stunning, don't go anywhere, I got it,

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Speaker 4: okav We are back and so, as I mentioned before

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Speaker 4: the break, we are going to be talking about some

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Speaker 4: key points of residential owner occupy alone and investment property loan.

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Speaker 1: Are you ready? I'm very excited.

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Speaker 5: Would you like me to read the key dot points

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Speaker 5: that I listed for this part of the conversation?

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Speaker 2: Yes?

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Speaker 5: Please?

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Speaker 1: You can't wait, can you? I can't wait? You're a liar,

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Speaker 1: all right? So here are the main points.

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Speaker 5: So, if you're getting an investment loan, borrowing is actually

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Speaker 5: going to be different to if you're going to get

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Speaker 5: a loan for a property that you're going to live in.

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Speaker 5: Why because we need to take into account things like

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Speaker 5: rent received, but also any rent payable or mortgages payable

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Speaker 5: for when you keep living there. When it comes to

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Speaker 5: investment loans, you can opt to pay what's called interest

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Speaker 5: only if you want, which is where you aren't paying

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Speaker 5: the loan down, just the interest portion of that loan.

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Speaker 5: Or you could pay what's called P and I, which

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Speaker 5: is principal and interest, which is paying the loan off completely,

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Speaker 5: like not in its entirety, but like a portion of

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Speaker 5: what you would pay each month would go to the

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Speaker 5: principle and a portion would go to the interest, whereas

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Speaker 5: interest only. You're only paying the interests, so usually it's

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Speaker 5: much more cost effective in the short term, but you're

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Speaker 5: not paying your asset off in the long term, right,

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Speaker 5: so you can opt for interest only. However, it's actually

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Speaker 5: way less common to choose this on the property that

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Speaker 5: you actually live in and own, right, So often it's

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Speaker 5: an investment thing where an investor might go and purchase

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Speaker 5: a property beck and go, I'm going to purchase this property.

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Speaker 5: I've worked out the maths on it. The reason I

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Speaker 5: am purchasing this property is because in the next ten years,

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Speaker 5: I think it's going.

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Speaker 1: To double in price.

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Speaker 5: Really great area, really great location. So I'm actually going

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Speaker 5: to probably plan to sell it in ten years, so

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Speaker 5: I don't want to pay any of the loan off

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Speaker 5: stuff that that's silly to pay off the loan, What

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Speaker 5: I'll do is I'm going to pay off just the

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Speaker 5: interest portion.

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Speaker 1: Of the loan, so I'll pay the banks their.

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Speaker 5: Fees so that I can get the property. Then I'm

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Speaker 5: going to sit on the property for ten years.

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Speaker 1: I'm gonna get my.

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Speaker 5: Rental income hopefully that covers some of that interest only portion,

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Speaker 5: and in ten years we're going to look at my

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Speaker 5: property and hope that it has increased in value.

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Speaker 1: And let's say you purchased.

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Speaker 5: An apartment in Richmond for four hundred thousand dollars ten

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Speaker 5: years ago, maybe that is worth six fifty seven fifty now,

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Speaker 5: very very likely. So you go, actually, you know what

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Speaker 5: I'm going to do going to sell that property. I'm

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Speaker 5: going to pay back my loan, and it's entirety of

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Speaker 5: that four hundred and fifty thousand dollars that I borrowed

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Speaker 5: from the bank.

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Speaker 1: The rest is profit.

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Speaker 5: Obviously, you have to pay tax on that because it's

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Speaker 5: investment income. But a lot of people do it this way.

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Speaker 5: Very uncoman to do that for your family home, because

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Speaker 5: usually the intention is to get your family home, pay

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Speaker 5: off your family home, live in it without having any

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Speaker 5: mortgage or rent or anything overhead. Right, So the priorities

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Speaker 5: are usually different, which is why often you don't see

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Speaker 5: that many people putting their home loan on interest only.

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Speaker 5: If you are choosing that, it usually is for a

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Speaker 5: short period of time, beck And usually that short period

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Speaker 5: of time is because you know, interest rates have gone

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Speaker 5: up to seven point two percent and money and cash

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Speaker 5: is really tight, So you go, you know what, I

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Speaker 5: can take a bit of the pressure off right now,

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Speaker 5: beck by going to interest only for a short period

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Speaker 5: of time while I rEFInd my feet, or interest rates

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Speaker 5: come down a little bit and take a bit of

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Speaker 5: pressure off because this is all too much, right? Does

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Speaker 5: that make sense as why you would and wouldn't do that?

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Speaker 5: For investment loans, you actually need a larger deposit than

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Speaker 5: you do for owner occupyer loans. Most banks for investment,

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Speaker 5: although you can totally go down the LMI space, they

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Speaker 5: want you to have a minimum loan to value ratio

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Speaker 5: of ninety including l am I, although exceptions for some

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Speaker 5: banks will you know, go slightly higher here, whereas most

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Speaker 5: banks actually allow ninety five percent including LMI for owner occupy,

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Speaker 5: which is kind of cool, right, So it means that banks, essentially,

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Speaker 5: you know, this is not including any government schemes. Essentially,

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Speaker 5: there are some banks who will let you purchase owner

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Speaker 5: occupied properties for a five percent deposit back, or as

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Speaker 5: for investment property, that is not the case.

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Speaker 4: Okay, I understand, because there's a lot more risk.

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Speaker 5: In investment property than there is a property that you're

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Speaker 5: going to live in, yes.

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Speaker 1: Yourself, Yes, I see.

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Speaker 5: Okay, this is probably a really really good time to

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Speaker 5: plug the guys at Zela Money, the guys, the gals,

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Speaker 5: the team at Zela Money to be like, if you're

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Speaker 5: thinking about this and this conversation about interest rates and

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Speaker 5: mortgages is overwhelming, yeah, go talk to Kate and the team.

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Speaker 1: Honestly, they're good eggs doing good things.

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Speaker 5: And if you don't have a five in front of

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Speaker 5: your interest rate at the moment, if it's higher than that,

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Speaker 5: go see them to get it all fixed up. Because

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Speaker 5: often when you have an investment loan back, what happens

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Speaker 5: is you're usually more likely to be on a variable

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Speaker 5: interest rate, which means it might have gone up. And

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Speaker 5: if you haven't checked your interest rate recently and just

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Speaker 5: assumed it's the same as what it always was, triple

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Speaker 5: check it because it could be higher than what you're

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Speaker 5: expecting it to be. I don't mean to scare people.

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Speaker 5: I just want to make sure everyone's in a good

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Speaker 5: financial position.

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Speaker 4: I love that about you, V.

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Speaker 1: Thank you trying my best.

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Speaker 5: So, if you're buying an investment back to the actual episode,

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Speaker 5: sure it means that if you're a first home buyer,

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Speaker 5: you actually don't get any discounts on stamp duty or

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Speaker 5: like the first home buyer benefits that exist, and you

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Speaker 5: can't go with any of the first home buyer schemes

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Speaker 5: if the purpose isn't owner occupier, even if it is

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Speaker 5: your first property. So if you're planning on purchasing your

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Speaker 5: very first property and it's all very exciting, make sure

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Speaker 5: that you've looked into it and you're not just assuming

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Speaker 5: that you get access to the first home super savor

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Speaker 5: scheme immediately or you're going to get the first home

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Speaker 5: you know grants in your state or territory, because it

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Speaker 5: doesn't necessarily mean you'll get it for an investment property.

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Speaker 5: In fact, the expectation would be that for you to

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Speaker 5: access that, you would live in the property for a

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Speaker 5: minimum of six to twelve months before then renting it

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Speaker 5: out and making it an investment property.

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Speaker 1: Sure makes sense, That does make sense.

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Speaker 5: So rates are higher with investment loans than owner OK,

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Speaker 5: which is interesting but also worthy of consideration because I

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Speaker 5: think you just go into it often just assuming it's

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Speaker 5: the same right or just get a home loan whether

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Speaker 5: I live in it or I have it as an

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Speaker 5: investment property, And that's not the case, not.

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Speaker 1: The case, not the case.

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Speaker 4: Interesting pun intended. Yeah, that's a good pun, pretty good

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Speaker 4: so V what are some things to think about as

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Speaker 4: a landlord?

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Speaker 5: I feel like there are a lot of things the

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Speaker 5: world has enough not so nice human beings. So be

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Speaker 5: a nice human, I think is at the crux of it.

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Speaker 5: And remember that your tenants are human beings as well,

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Speaker 5: and they deserve to be treated as human beings. You

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Speaker 5: have taken on this responsibility of becoming a landlord completely consensually.

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Speaker 5: Beck Like you did accidentally become a landlord and you

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Speaker 5: hated the idea of it. You decided that investment property

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Speaker 5: was for you, and one of the ways you were

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Speaker 5: going to make money from investment property was to tenant

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Speaker 5: the property. And that makes sense. But that doesn't mean

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Speaker 5: that you get to treat those people like trash. It's

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Speaker 5: absolutely not the case. And I think that it doesn't

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Speaker 5: take that many brain cells to just be a kind

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Speaker 5: human like. It's actually, from my perspective, your responsibility to

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Speaker 5: make sure that if you're going to have tenants, you've

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Speaker 5: thought about your emergency fund. You've thought about all of

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Speaker 5: the things that could potentially go wrong, and maybe you

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Speaker 5: have a separate property emergency fund so that if something

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Speaker 5: goes wrong, because inevitably improperty it does and unlike it

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Speaker 5: going wrong in your own house, it usually has to

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Speaker 5: be fixed immediately. Water goes off, beack, like the hot

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Speaker 5: water system completely breaks. I would look about it at

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Speaker 5: my house for a minimum of a week. I'd probably

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Speaker 5: go and you're like, share it at the gym, and

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Speaker 5: just like put off purchasing a new hot water system

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Speaker 5: for as long as possible. You know, yea, if it

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Speaker 5: breaks in your tenant's house, it's classified as an emergency.

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Speaker 5: You have to fix that immediately. Like that's not an

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Speaker 5: if a butt a. Why There's so many different things

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Speaker 5: that could go wrong that are your responsibility, Like and

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Speaker 5: I just don't think it takes that many additional steps

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Speaker 5: to make your tenants feel warm and welcome, like small things.

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Speaker 1: Could you just leave a.

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Speaker 5: Little nice note, maybe like a box of roses, and

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Speaker 5: be like, hey, Beck, so excited that you're moving into

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Speaker 5: our property. We love this property. We hope you love

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Speaker 5: it as much as we do. You know, if you've

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Speaker 5: got any issues, contact your property manager.

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Speaker 1: They're amazing.

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Speaker 5: We've picked them because they are kind. Or you could say,

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Speaker 5: here's my number. If anything goes wrong, you're more than

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Speaker 5: welcome to contact me. I remember moving into a rental

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Speaker 5: and being mind blown. When someone did that to me.

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Speaker 1: I was like, oh my god, that's wild. They care.

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Speaker 5: But there's so many different things that you could do.

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Speaker 5: One just don't be a trash human.

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Speaker 4: Sure.

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Speaker 5: The next is really understanding, like why are you trying

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Speaker 5: to increase rent?

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Speaker 1: Is this an ethical decision?

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Speaker 4: Right?

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Speaker 5: I think there is a big conversation to be had,

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Speaker 5: especially right now around all right, Beck, so you've got

384
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Speaker 5: an investment property. Interest rates they're cooked. They've gone up

385
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Speaker 5: so much. You didn't see them going up this much.

386
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Speaker 5: Totally get it, Totally understand that you're under some financial pressure.

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Speaker 5: Is that financial pressure your tenant's responsibility.

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Speaker 1: That's a tough one.

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Speaker 5: You're the one that chose to have an investment property.

390
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Speaker 5: Your tenant chose to rent a property for less, pretend

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Speaker 5: five hundred dollars a week. At that amount, they thought, oh,

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Speaker 5: we'll go up, you know a little bit each year

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Speaker 5: in line with inflation. In Line with inflation is usually

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Speaker 5: between two and three percent. I think most of us

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Speaker 5: calculate for that. Sure, but your landlord, their mortgage repayments

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Speaker 5: have gone up, and it couldn't possibly come out of

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Speaker 5: their back pocket to have to cough up some money

398
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Speaker 5: for the investment property that they own because interest rates

399
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Speaker 5: are doing what interest rates do and fluctuate. I find

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Speaker 5: it incredibly rich and I'm going to get people jumping

401
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Speaker 5: down my throat about this. You want bring it on,

402
00:19:05,119 --> 00:19:10,240
Speaker 5: that's fine, sure, But if you are astronomically increasing your

403
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Speaker 5: tenants rent because you cannot afford the mortgage, the actual

404
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Speaker 5: question here is when are you selling your property right?

405
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Speaker 5: Because what you've just told me is you cannot provide

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Speaker 5: ethical housing, fair housing. You can't afford to do that,

407
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Speaker 5: meaning you can't afford the property that you own right now,

408
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Speaker 5: right So what are you going to do? Is it

409
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Speaker 5: coming out of your back pocket? And the end of

410
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Speaker 5: the day, that money should be coming out of my

411
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Speaker 5: personal savings, It should be coming out of my offset.

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Speaker 5: It should be coming out of that because I'm funding

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Speaker 5: this investment property that ultimately should be an investment. It's

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Speaker 5: not your tenants responsibility to pay your astronomical mortgage or

415
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Speaker 5: payments because you're the one that committed to that. They

416
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Speaker 5: didn't commit to that. True, they committed to paying the

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Speaker 5: average rent. Maybe they're paying a bit more because you've

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Speaker 5: got a real fancy house. Yeah, they committed to that

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Speaker 5: area because it was making sense to them.

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Speaker 1: And you know what, there are.

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Speaker 5: A lot of people in this world and in our

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Speaker 5: community who choose to rent because they like consistency. Like

423
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Speaker 5: they might not like the idea of variable interest rates.

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Speaker 5: They might like the idea of the flexibility of being

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Speaker 5: able to move whenever they want, only having a one

426
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Speaker 5: year lease. They might like the fact that they can

427
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Speaker 5: guarantee that their property costs are going to be five

428
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Speaker 5: hundred dollars a week and if the hot water system breaks,

429
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Speaker 5: it's not their responsibility.

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Speaker 1: And that's fair.

431
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Speaker 5: Yeah, because that's the deal that you and I have

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Speaker 5: when we sit down and I go, Beck, I'm a

433
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Speaker 5: property owner. I'm going to lease it out, and you go,

434
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Speaker 5: no worries. Here's this lease agreement outlining the terms and

435
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Speaker 5: conditions of this lease. This is what I'll bring to

436
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Speaker 5: the table, the cash holder. Ah, And this is what

437
00:20:46,240 --> 00:20:49,040
Speaker 5: you'll bring to the table, yeap. It really grinds my

438
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Speaker 5: gears when people say, oh, Victoria have no other option

439
00:20:52,840 --> 00:20:54,119
Speaker 5: but to put up the rent. Have you seen the

440
00:20:54,160 --> 00:20:59,600
Speaker 5: mortgage repayments? You can't afford your mortgage repayments? Okay, Well, one,

441
00:20:59,640 --> 00:21:02,600
Speaker 5: you should factored this in a good mortgage broker would

442
00:21:02,600 --> 00:21:06,120
Speaker 5: have sat you down and made sure that any fair

443
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Speaker 5: variability was accounted for, that you could have paid more

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Speaker 5: that you know there was a plan in place. Any

445
00:21:11,920 --> 00:21:16,520
Speaker 5: responsible and ethical landlord would have their own property emergency fund.

446
00:21:17,200 --> 00:21:20,760
Speaker 5: Any responsible and ethical landlord would know when to pull out.

447
00:21:21,800 --> 00:21:24,080
Speaker 4: That is a micdrop mode.

448
00:21:24,119 --> 00:21:27,680
Speaker 5: Like if you cannot afford to keep the investment property

449
00:21:27,720 --> 00:21:30,960
Speaker 5: that you currently have, that's actually okay. That's the risk

450
00:21:31,040 --> 00:21:34,119
Speaker 5: you took on when you got the investment property, is

451
00:21:34,160 --> 00:21:38,480
Speaker 5: that your circumstances might change and this investment asset might

452
00:21:38,480 --> 00:21:41,159
Speaker 5: not work for you forever. Sure, you don't get to

453
00:21:41,240 --> 00:21:43,840
Speaker 5: keep it just because you think that you deserve it.

454
00:21:44,960 --> 00:21:46,960
Speaker 1: It makes me very, very angry.

455
00:21:47,359 --> 00:21:50,399
Speaker 5: I think the other conversation is really around you know,

456
00:21:50,440 --> 00:21:52,880
Speaker 5: and obviously there's so many legalities around that in some

457
00:21:52,960 --> 00:21:55,560
Speaker 5: states and territories you can only put rent type X amount,

458
00:21:55,640 --> 00:21:58,000
Speaker 5: or you can only do xyz every twelve months or

459
00:21:58,240 --> 00:22:00,680
Speaker 5: everywhere it's different. But I really think it comes down

460
00:22:00,720 --> 00:22:04,280
Speaker 5: from my personal opinion, which you know, this podcast should

461
00:22:04,320 --> 00:22:06,320
Speaker 5: be really about putting all the information on the table

462
00:22:06,359 --> 00:22:08,720
Speaker 5: then being like beg you make your own decision, but

463
00:22:08,920 --> 00:22:10,600
Speaker 5: like my opinion right now is don't be a dear.

464
00:22:11,280 --> 00:22:12,640
Speaker 1: And I think that's really relevant.

465
00:22:12,680 --> 00:22:15,000
Speaker 5: Sure, And I think that if it comes down to

466
00:22:15,080 --> 00:22:17,040
Speaker 5: it and you're listening to this and you're like, oh,

467
00:22:17,119 --> 00:22:18,840
Speaker 5: Victoria's off her rocker, like she.

468
00:22:18,800 --> 00:22:19,800
Speaker 1: Doesn't understand it.

469
00:22:20,000 --> 00:22:21,879
Speaker 5: Oh no, Bay, by my own property, I understand that

470
00:22:21,960 --> 00:22:24,480
Speaker 5: I have an investment property. Yeah, And if I can't

471
00:22:24,520 --> 00:22:27,919
Speaker 5: afford that one day and it was tenanted, I know

472
00:22:28,240 --> 00:22:32,000
Speaker 5: deeply that that's not my tenants responsibilities to carry the

473
00:22:32,040 --> 00:22:33,520
Speaker 5: weight of my investment.

474
00:22:34,240 --> 00:22:34,600
Speaker 1: It's not.

475
00:22:35,320 --> 00:22:37,119
Speaker 5: I love that at the end of the day, you

476
00:22:37,240 --> 00:22:39,679
Speaker 5: need to know when an investment is serving you, and

477
00:22:39,720 --> 00:22:41,760
Speaker 5: when an investment is not serving you, and when to

478
00:22:41,800 --> 00:22:45,120
Speaker 5: dispose of one. I love as you took that on yourself.

479
00:22:44,800 --> 00:22:47,920
Speaker 1: As a perpetual tenant. I thank you. It just makes sense.

480
00:22:47,960 --> 00:22:51,120
Speaker 5: It's not about thanking me, it's about going Actually now

481
00:22:51,160 --> 00:22:52,840
Speaker 5: we talk about it, because I think that there's just

482
00:22:52,880 --> 00:22:55,440
Speaker 5: so much conversation coming from tenants and then being like, Oh,

483
00:22:55,440 --> 00:22:58,639
Speaker 5: they're just annoyed because they're tenants, right. No, no, No,

484
00:22:58,680 --> 00:23:02,000
Speaker 5: I'm a property owner. I now own an investment property

485
00:23:02,040 --> 00:23:06,359
Speaker 5: of my own, and I cannot imagine putting that responsibility

486
00:23:06,359 --> 00:23:07,120
Speaker 5: on somebody else.

487
00:23:07,280 --> 00:23:09,280
Speaker 1: Love that sis it makes me so mad.

488
00:23:09,520 --> 00:23:11,680
Speaker 5: Also, when you have to put up rent, I think

489
00:23:11,720 --> 00:23:14,680
Speaker 5: clear and honest communication about why when we're and how

490
00:23:15,240 --> 00:23:17,360
Speaker 5: Like I know a couple of my friends who own

491
00:23:17,600 --> 00:23:19,800
Speaker 5: investment properties have had to put up their rent because

492
00:23:19,840 --> 00:23:23,840
Speaker 5: during COVID they offered their properties for really really discounted rent.

493
00:23:23,920 --> 00:23:24,680
Speaker 1: Sure and now it.

494
00:23:24,600 --> 00:23:26,520
Speaker 5: Needs to be brought back to market value.

495
00:23:27,040 --> 00:23:29,000
Speaker 1: But it was articulated at that.

496
00:23:29,000 --> 00:23:32,480
Speaker 5: Point in time, like oy like it significantly discounted COVID rarah,

497
00:23:32,600 --> 00:23:34,080
Speaker 5: like it might have been an apartment in the city

498
00:23:34,160 --> 00:23:37,960
Speaker 5: or whatever. I think that conversation is really valid. But

499
00:23:38,119 --> 00:23:41,879
Speaker 5: it's about clear, consistent communication and putting timelines in place

500
00:23:41,880 --> 00:23:44,560
Speaker 5: and going hey, Beck, like so unfortunate, but like maybe

501
00:23:44,560 --> 00:23:45,879
Speaker 5: in six months we're going to have to put the

502
00:23:45,880 --> 00:23:49,080
Speaker 5: rent to X, like can we see that? Also negotiate

503
00:23:49,160 --> 00:23:52,240
Speaker 5: with your tenants because it doesn't mean that just because

504
00:23:52,280 --> 00:23:55,320
Speaker 5: you think it's only twenty bucks a week more, what's

505
00:23:55,320 --> 00:23:57,720
Speaker 5: that matter to a lot of people. Twenty bucks a

506
00:23:57,760 --> 00:24:01,080
Speaker 5: week is eating or not eating. Yes, So if you

507
00:24:01,080 --> 00:24:03,480
Speaker 5: could just stop pretending that small amounts of money are

508
00:24:03,520 --> 00:24:06,040
Speaker 5: flippant because it's not an issue for you, that would

509
00:24:06,080 --> 00:24:10,920
Speaker 5: be great. So it just it really frustrates me. Obviously,

510
00:24:11,200 --> 00:24:15,840
Speaker 5: I will always advocate for prioritizing lower income tenants, in

511
00:24:15,920 --> 00:24:20,280
Speaker 5: fact they are probably good long term tenants, and actually

512
00:24:20,320 --> 00:24:22,200
Speaker 5: having a conversation around well what does that mean?

513
00:24:22,240 --> 00:24:22,960
Speaker 1: How does that work?

514
00:24:23,040 --> 00:24:27,439
Speaker 5: Because sure, nowadays landlords have all the applications put in

515
00:24:27,480 --> 00:24:29,600
Speaker 5: front of them and they see, oh, no.

516
00:24:29,720 --> 00:24:31,080
Speaker 1: Couples a lawyer and a doctor.

517
00:24:31,480 --> 00:24:33,360
Speaker 5: Well let's put them in my house because they earn

518
00:24:33,359 --> 00:24:37,520
Speaker 5: a lot of money. Who cares that they paying the rent? Like,

519
00:24:37,640 --> 00:24:39,880
Speaker 5: can you pay the rent or not? It's very fair

520
00:24:39,960 --> 00:24:43,840
Speaker 5: to check if service ability exists. Yes, but why are

521
00:24:43,840 --> 00:24:46,520
Speaker 5: we prioritizing the lawyer and the doctor is better tenants

522
00:24:46,560 --> 00:24:49,560
Speaker 5: than somebody who's on a lower income who might arguably

523
00:24:49,600 --> 00:24:51,520
Speaker 5: be more respectful of your property.

524
00:24:51,880 --> 00:24:52,120
Speaker 2: Right?

525
00:24:52,800 --> 00:24:56,399
Speaker 5: The other thing, can we start offering longer than twelve

526
00:24:56,480 --> 00:24:57,240
Speaker 5: month leases?

527
00:24:57,720 --> 00:24:59,080
Speaker 1: That would be pretty cool.

528
00:24:59,359 --> 00:25:02,719
Speaker 5: Financial still, ability for people is really important, and I

529
00:25:02,760 --> 00:25:05,199
Speaker 5: know that when I was a renter, I would have

530
00:25:05,240 --> 00:25:07,719
Speaker 5: loved the opportunity of signing a longer lease because I

531
00:25:07,760 --> 00:25:09,679
Speaker 5: was always so scared that if I signed a one

532
00:25:09,720 --> 00:25:11,600
Speaker 5: neear lease, oh my gosh, what's rent going to go

533
00:25:11,680 --> 00:25:13,399
Speaker 5: up by next year? Am I going to have to

534
00:25:13,440 --> 00:25:14,120
Speaker 5: move around?

535
00:25:14,200 --> 00:25:14,320
Speaker 2: What?

536
00:25:14,359 --> 00:25:17,399
Speaker 5: Does that actually look like? And it also gives people

537
00:25:17,480 --> 00:25:20,639
Speaker 5: that longer term financial stability. It's like, I know that

538
00:25:20,720 --> 00:25:23,840
Speaker 5: in Australia they've just started offering not everywhere, but I

539
00:25:23,880 --> 00:25:26,360
Speaker 5: know a few people who have offered ten year leases.

540
00:25:26,600 --> 00:25:28,960
Speaker 5: Oh that is cool, And I just think it just

541
00:25:29,040 --> 00:25:33,000
Speaker 5: makes sense, like home would then feel more like your home. Yeah,

542
00:25:33,200 --> 00:25:35,560
Speaker 5: and you've got a long term, secure tenant. And I mean,

543
00:25:35,760 --> 00:25:38,080
Speaker 5: you're gonna have all the same issues that derise the

544
00:25:38,080 --> 00:25:41,360
Speaker 5: hot water system, the xyzed But I think it's important

545
00:25:41,400 --> 00:25:44,480
Speaker 5: to put other people's financial security at the forefront of

546
00:25:44,560 --> 00:25:47,480
Speaker 5: decisions that you're making, because you're in a privileged position

547
00:25:47,520 --> 00:25:49,080
Speaker 5: to be able to afford property.

548
00:25:48,720 --> 00:25:49,239
Speaker 1: To begin with.

549
00:25:49,960 --> 00:25:52,879
Speaker 5: Anyway, Beck, I think that the crux of this is

550
00:25:53,320 --> 00:25:56,600
Speaker 5: if you're a landlord, know when to tap out. I

551
00:25:56,640 --> 00:25:58,960
Speaker 5: get it, Like saving for a property is so hard, Beck,

552
00:25:59,080 --> 00:26:02,240
Speaker 5: Like getting your then finally getting loan, it's like you've

553
00:26:02,240 --> 00:26:04,720
Speaker 5: achieved a life goal, right, like it's a status symbol.

554
00:26:05,080 --> 00:26:07,359
Speaker 5: And then going backwards. I get that it could feel

555
00:26:07,480 --> 00:26:08,840
Speaker 5: terrible and you're like, well, I don't want to give

556
00:26:08,840 --> 00:26:09,359
Speaker 5: that up.

557
00:26:09,280 --> 00:26:10,000
Speaker 1: Like that sucks.

558
00:26:10,160 --> 00:26:12,040
Speaker 5: But if you're not in a financial position to be

559
00:26:12,080 --> 00:26:15,480
Speaker 5: a fair equitable and reasonable landlord. Yeah, maybe you're out,

560
00:26:16,760 --> 00:26:18,359
Speaker 5: like you have to make the decision that is not

561
00:26:18,480 --> 00:26:20,119
Speaker 5: just right for you, but it is right for the

562
00:26:20,160 --> 00:26:21,520
Speaker 5: asset class that you've chosen.

563
00:26:21,560 --> 00:26:22,359
Speaker 1: And that's an option.

564
00:26:22,800 --> 00:26:24,560
Speaker 5: It's not like you bought shares and they're just sitting

565
00:26:24,600 --> 00:26:26,879
Speaker 5: over there and you can't make your monthly contributions to

566
00:26:27,000 --> 00:26:29,240
Speaker 5: them and they just sit there and they continue to

567
00:26:29,240 --> 00:26:31,680
Speaker 5: grow and do their own thing. If that's the case,

568
00:26:31,720 --> 00:26:35,199
Speaker 5: maybe that's a better investment opportunity for you. So at

569
00:26:35,240 --> 00:26:37,320
Speaker 5: the end of the day, I think a healthy city

570
00:26:37,359 --> 00:26:40,280
Speaker 5: needs a mix of affordable rentals of different sizes. I

571
00:26:40,320 --> 00:26:44,119
Speaker 5: think that some people will always prefer renting over owning

572
00:26:44,240 --> 00:26:47,600
Speaker 5: for various points in their life, and for that to work,

573
00:26:47,880 --> 00:26:51,720
Speaker 5: they need access to affordable, diverse, and safe rental housing.

574
00:26:51,920 --> 00:26:53,840
Speaker 5: It's too hard at the moment, and I think that

575
00:26:53,920 --> 00:26:56,040
Speaker 5: people are too entitled at the moment.

576
00:26:56,359 --> 00:26:56,879
Speaker 1: You see it.

577
00:26:57,320 --> 00:27:01,280
Speaker 5: I'm sorry real estate agents and property managers and everybody

578
00:27:01,280 --> 00:27:03,760
Speaker 5: else who thinks it's like, oh, but the landlord.

579
00:27:05,160 --> 00:27:06,440
Speaker 1: No, no, no, the landlord.

580
00:27:06,119 --> 00:27:08,600
Speaker 5: Has just as much responsibility I ask in this as

581
00:27:08,600 --> 00:27:09,320
Speaker 5: anybody else.

582
00:27:09,480 --> 00:27:11,480
Speaker 4: Yes, you can probably tell them, really sitting on the

583
00:27:11,480 --> 00:27:13,679
Speaker 4: fence here just to be safe because I don't know

584
00:27:14,119 --> 00:27:18,440
Speaker 4: enough about the market. But I really like everything you're saying,

585
00:27:18,480 --> 00:27:20,520
Speaker 4: and I tend to agree. But I think that's a

586
00:27:20,600 --> 00:27:21,639
Speaker 4: fantastic place to leave it.

587
00:27:21,680 --> 00:27:23,720
Speaker 5: I think it is a fantastic place to leave it.

588
00:27:23,960 --> 00:27:24,960
Speaker 1: Let's get some lunch.

589
00:27:25,119 --> 00:27:25,680
Speaker 4: Let's do it.

590
00:27:25,720 --> 00:27:26,840
Speaker 1: Fish bowl ten out of.

591
00:27:26,840 --> 00:27:29,240
Speaker 5: Ten, ten out of ten, and we will see you

592
00:27:29,320 --> 00:27:39,000
Speaker 5: guys on Friday. By the advice shared on She's on

593
00:27:39,040 --> 00:27:41,720
Speaker 5: the Money is general in nature and does not consider

594
00:27:41,760 --> 00:27:45,679
Speaker 5: your individual circumstances. She's on the Money exists purely for

595
00:27:45,840 --> 00:27:48,720
Speaker 5: educational purposes and should not be relied upon to make

596
00:27:48,720 --> 00:27:52,000
Speaker 5: an investment or financial decision. If you do choose to

597
00:27:52,000 --> 00:27:55,320
Speaker 5: buy a financial product, read the PDS TMD and obtain

598
00:27:55,359 --> 00:27:59,639
Speaker 5: appropriate financial advice tailored towards your needs. Victoria Divine and

599
00:28:00,000 --> 00:28:03,320
Speaker 5: these On the Money are authorized representatives of Money sherper

600
00:28:03,400 --> 00:28:05,760
Speaker 5: P T y L t D A B N three

601
00:28:05,800 --> 00:28:09,040
Speaker 5: two one six four nine two seven seven zero eight

602
00:28:09,320 --> 00:28:14,000
Speaker 5: a F s L four five one two eight nine