Behind Closed Doors and the Rent Rolls Worth Zip

Opening: a hard week, behind closed doors

Peter Schravemade (00:05) Welcome to Before the Weekend. It's Friday, the 16th of October, in the year 2026. We're up to episode 23. It's been it's been a a hard week, is the way I would put it this week. I mean, not not for me personally. How what about you, Kasey? I'm joined by Kasey McDonald, who is all the way from Brisbane this week. We're at our home bases. What's been going on?

Kasey McDonald (00:32) Yeah, I think a really exciting week actually for me. I had the privilege of being able to be on the ground in Victoria and so really looking forward to chatting through some of those learnings a little later in our episode and you know what I'm hearing on the ground from the property managers, more importantly, you know, the stories and the those real life stories that they're sharing with me around investors. So yeah, I think an interesting week, really for me. Exciting, interesting. But yeah, you know, it was sunny before heading to Melbourne. And as soon as I arrived, of course, Melbourne turned on the shitty weather.

Peter Schravemade (01:09) Well, it's to be honest, it's unseasonably cold up here in Queensland this weekend. So

Kasey McDonald (01:12) Yeah, it is.

Peter Schravemade (01:14) I don't I don't know if I'm throwing stones across those two borders. But yeah, look, I and there was a lot of news this week. That I guess we're not covering like the mainstream stuff, like you know, there's more interest rate noise and and things like that. But probably this week I'd I'd like to focus on more what's happening in real estate's behind closed doors. I I have taken multiple calls this week that have surprised me. The nature of the calls have surprised me. They've been very personal. They have been looking for assistance and and there there really seems to be a sense of a lot of real estate agents and principals that have hit the wall or they're doing it very tough in business. And, you know, some of they've come from mainly down the East Coast. So I don't know that I'm speaking so much to the the WA audience at the moment, but you know, there's a there's a a few things that we need to confront this week that aren't aren't wonderful. There's there's been, you know, a loss of a loss of life here on the Sunshine Coast through suicide, which is, you know, just terrible.

Peter Schravemade (02:21) And and that was a local agent and there might be some other things involved in that, but we'll we're gonna go through that. But I guess the the meat of today's show is to the real stories affecting agents, principals, buyers agents, property managers, and you know, and then so we'll go through all of that and we'll jump into your your mailbag to triage what's happening on the Victorian investor front as well. But I think I think the first one we'll start with is the is the reflection on the phone calls that I fielded this week. Like really, really high quality agencies, award-winning agencies, principals of those agencies calling me. I had one say to me this week that he is going to have to go into property management to survive the next six months, which you know is is just crazy. Like he's gonna have to cut all of his his sales staff back. And and you can't sort of sit back and throw stones at this business and go, he he hasn't, you know, he hasn't prepared his agency in the right way, or he didn't see this coming, or he didn't squirrel away money. This is nothing, this is nothing to do with that.

The calls: an award-winning principal moving into property management to survive

Peter Schravemade (03:32) This operator is an outstanding operator, been in the business for over 15 years, has seen a lot of things coming. And the comment that he made to me that really shook me, was was around the fact that he had never seen a a buyer tap turn off in the way that this one had. And let me let me rephrase what what he he he put into words. It's it paraphrase what he put into words. He's basically saying that you know in the past investors would drop out of the market or in the past home buyers would drop out of the market or in in the past, you know, they that'd rely on what I call them the bets the births, deaths, and marriages. You know, the the market would be that constrained that it'd be people relocating or it'd be a a birth would cause an an upgrade or a a marriage would cause people to buy a house or a a death would cause the sale sale of a property. But he's actually saying to me that in this particular market, he thinks that all facets of buyers in the residential market are are out in in a big way. And that that's not saying there's nothing moving.

Peter Schravemade (04:42) There are still things moving, but in more than he has ever seen before, those elements, every single buyer in the area that he's in, you know, I think I think it was a a case of forty two open homes with zero people through it. Like, that's that's a that's a terrible stat. I I can't remember ever hearing that. And so, you know, like there'll be a hopeful hop hopefully there's people saying, you know, that's that's just an anomaly and there's that's that's not the case. But you know, so I got I got I got that call. And then, you know, in through the local media here on the Sunshine Coast, an agent I know, his name is Adam Dunlop or Dunny as he was known I I knew him through my BoxBrownie days and I I'm not gonna claim to be his best mate. I probably only ever caught up with him twice, but on those two occasions he was a happy-go-lucky agent. Kicking goals and it and unfortunately this week you know, comes the news that he's taken his life.

Forty-two open homes, no one through, and remembering Adam Dunlop

Peter Schravemade (05:45) And we don't know the reasons for that, and I'm not gonna I'm not gonna really speculate, but I I think what I what I would like to address this week is the the whole idea of maybe it's now a a great time to call your mates. Maybe it's a great time to check in on even the competitors in your space. Like, yeah, we compete for business, but we don't have to be assholes about it. A lot of the competitors that I used to work against in the in the space I would be calling. So, you know, I I don't I I know this is a real downer to start the episode on, but I I feel it's the biggest news that we should be talking about right now in the industry. I just feel that we as people share a burden.

Peter Schravemade (06:27) You know, like I wouldn't have ever thought to call Adam Dunlop. We weren't that, you know, we're acquaintances more than friends. We knew each other. You know, we weren't calling on a regular basis, but I have seen posts from people who are dear friends of his him, really emotionally charged posts online saying, I should have called him, I should have checked in. And so a lot of the a lot of those principals that were calling me this week, they were, they were after, you know, that that was them checking in. I'm gonna have to follow them up. I'll have to call them up and and go, you know, what's happening? And and so look, I I don't know what your thoughts are, but we are we are in a state at the moment where you know, the real estate buyer tap has been turned off. Add to that, we've seen the buyers agents area. I I'm aware of multiple suicides in that area. Buyers agents have been decimated, you know, they're four of the big companies are are are already in liquidation. There's rumours of of a few more going. There are a buyers agents everywhere out of job. There are seasoned campaigners looking for positions in other areas.

Peter Schravemade (07:35) So, you know, look, I I I think if the at the outset of the show, if there's a message that I have for you and you're in that position at the moment, number one, you know, reach out, reach out for assistance. Call me if you have to. But but there are tools that will assist you. You know, let's start with the Rise Initiative Real Care app. You know, that entitles you to sessions where counselling sessions where you can talk through some of these issues. So at a very, very l loose minimum, I would be downloading that free app as a as a a useful tool because you know, the big black dog that rears its head every now and then and i you know, I know it does. I know, and everyone goes through these feelings. I think you really have to reach reach out, like actually start talking about it for it to to go away. I don't I don't know what your thoughts are or whether that's the same as what you're seeing.

Kasey: trades, conveyancers and the connected industries feeling it

Kasey McDonald (08:30) Yeah, and I think look, you you know, you're spot on. I think there's so much that it's not just also within our industry, it's those, I guess, connected industries. So we've got our trades that we work with who are now you know, potentially not getting as as much work because, you know, cash flow is a little tighter for both property management and and of course because then those owners aren't listing their homes for sale. They're not then doing works, I guess, in that preparation for sale either. So if we look at the trade industry, there's work that's being lost there. You know, we're looking at conveyancers, we're looking at solicitors. So, you know, all of those, I guess, connected businesses as well as a part of our property world, they're all now, as a from I guess that, you know, budget in May, have also started to to lose business. They're losing income. You know, unfortunately they're having to make significant changes in their business to also adapt to what this looks like. But then we also then don't understand from that business owner's perspective what also might be going on for them personally behind closed doors. So I think now is the time absolutely for us all to rally together.

Kasey McDonald (09:39) And it doesn't matter if we're the competing agent, it doesn't matter if we're the competing property manager. We should all be there to support each other during these times. And not just during these times, but I think all of the time and whilst yes, healthy, I think healthy competition is really important, but we're all colleagues at the end of the day. We're all here to achieve the best possible outcomes for those that we work for, which is of course our vendor and our property investors. And we all want to I guess, deliver those results the as best as we can and put the best put foot forward for us as an industry, as human beings. And be proud and have those morals and ethics, right? There's some of us that do great jobs and there's others that maybe don't. But let's, you know, let's all lift and band together in these times. Because some people haven't gone through this ride, right, Pete? Like in business. We've had such a great high with the market across many different locations. And so some that are in may not have felt this in in this way. So absolutely reach out.

Charles Tarbey: you are not responsible for the market

Peter Schravemade (10:50) Yeah, definitely. And there's a there's a couple of things that a couple of articles out this week that I would like to direct you to. You know, if you're an agent and you're doing it tough and you think that there's no light at the end of the tunnel, other than the Rise Initiative and the Real Care app for mental health and wellbeing. There's an article out by Charles Tarbey. For those of you don't know, he's the the owner of the Century 21 franchise for I think Australia and I think he's got a Middle East as well. But he he talked about you know the this the nature of agents who are doubling down and and and winning the recovery. And one of the things he really said in that is is to remember that you know, as an agent, you're not responsible for the market conditions that we're experiencing. And that really rung true to me. I I you know, I don't know if we say it enough, but it seems obvious. People out there listening will think, you know, of course, it's not our fault. We know exactly who is responsible.

Peter Schravemade (11:47) But but y you know, it's it's worth saying and probably the other thing that I I'd like to highlight is the the hamster wheel hustle, hustle, hustle that we always get thrust at us. You know, there's one particular dominant

The hamster wheel hustle and the art of longevity

Kasey McDonald (11:59) Yeah. I really enjoyed this article actually. Yeah.

Peter Schravemade (12:03) Yeah, yeah. And so this one's I it's it's it's out of an Elite Agent article talking about Nicole Walker joining Harcourts Adelaide Hills team. But it it's prioritising people over chasing commission rankings and I think just in in general, not just that article, but we we're in an industry where some real estate offices that I know, you know, I think back in the day, RE/MAX used to RE/MAX out of the US. I'm not necessarily referring to the Australian mob. They used to call it RE/MAX hustle, like almost owning the fact that their agents hustled harder and and worked harder for a deal. And I understand why they put that forward, but we've now, you know, we're now in a society where you turn up to the major national convention and they talk about you know, waking up at five thirty doing two hours worth of gym, one hour worth of mindfulness making a thousand calls before the clock cold plunge pool. And then you you're like you you know, where where is your lifestyle in that? Whereas most of the really good operators that I know in the industry, they don't do any of that.

Peter Schravemade (13:14) Theirs is a work life balance where they might have three kids and a wife that they love, and they are they're working to sustain the future of of those people. And here is business over on this side and here is here is work on that side. And I I think we live in a falsely inflated economy where we see these photographs of people without socks and spiky hair in front of a Lamborghini wearing a Rolex watch and we think. That's the idea, you know, that's the goal I w I wanna be. Whereas I I think the people who've been in the industry as long as we have, Kasey, that we we know, we know very well that that, you know, the reality is you're running a business. And if if you've you deceived yourself into thinking that, you know, this is some kind of get rich quick scheme and you can make the money, well, you know, you're the guy that probab or the you're the person that probably ends up on the front page of the paper for doing the wrong thing because like run in running a business, there's an actual art to it. There's a there's a longevity to it and and I I think that's not discussed a lot.

Peter Schravemade (14:13) Actually, if you want to go back and listen to the interview that I did with Peter Hutton on the the failures that he experienced during Hutton & Hutton, he talks about that. He talks about that in in great length, exactly what what the real estate what he thought, well what the real estate community sort of taught him about the the things that he had failed at. So look, I just well I'm I'm I'm you know, if if if you're in scenario where things are things are hard, seek help. Use that Real Care app for sure. Reach out to to the mates around you, even if you don't feel like doing it. Like it's a Friday afternoon. Go and find somebody who who you care about dearly and tell them, tell them exactly how you're feeling. Because, you know, I don't want to wake up next week and and find that we've lost another brave warrior in our industry because things have gotten too hard. And I I know Kasey, you're you're the same as that. It's it's just unacceptable.

Peter Schravemade (15:10) You know, these are things that we we could avoid. So I'm gonna move on from that, but I I I think we need to address it because it if it's not happening now in the business that you're in, it's happening further down. Also, by the way, if you're a salesperson or if you're in the proptech industry like we are, check, check in on your if you're a salesperson, check in on your principal. Don't make it all about you. Go and ask go and ask that person, check in on your property managers. If you're in the sales industry or you're in the proptech adjacent industries, check in on your clients. Like they they would they would love that. Hey, I just want to, I know things are tough at the moment. I just want to give you a call and see how you're doing. Like we we're all in this together. Like, you know, it sounds really cliche, but we are. Call the people that matter to you and and and check it out.

Check in on your principal, your PMs and your clients

Peter Schravemade (15:57) Shall we move on? Shall we? It says somewhat

Kasey McDonald (15:59) Yes, I'm not.

The cashflow crunch: Brisbane at 20 per cent and selling times blowing out

Peter Schravemade (16:00) Related, somewhat related, but shall we we we should move on? So in the next segment, I want to talk about the cash flow crunch, which is you know, we're we're seeing 20% clearance rates in some areas, and and and there's there's an article out this week about you know one of our major portals taking action against agents or winding up an agency, obviously because you know, they they're not paying the bills. But out of Real Estate Business this week they reported Brisbane's twenty percent clearance rate. Where four out of five auctions passed in, 90 day settlement pipe pipelines kind of evaporating. And and I you know, that is very much related to what what we heard in the previous in the previous article, right, Kasey? And I don't think it's just limited to Brisbane. I think this is new to Brisbane, but I think Sydney and Melbourne folk will be telling us like, well, you know, I I'm not gonna speak on their behalf, but they'll be telling us that it's a it's difficult down there now. See this article also saying that twenty-five percent of listings are now considered to be sa stale.

Peter Schravemade (17:10) Like quarter of a stock is is sitting on the days on market, has blown out blown out from twenty-three days last year to now thirty-nine days, and new listings are down to nine point two percent. I mean that's that's a remarkable turnaround from three months ago.

Kasey: buyers holding off and renters choosing which bills to skip

Kasey McDonald (17:28) Yeah, and look, I think it's like everyone on the ground is really feeling the pinch. And and it's, you know, buyers, I think, are also, there's probably two things here. They're in the thought process of, okay, are the prices going to continue to come down? So they're holding, thinking we're probably going to get an even better deal as the market continues to soften and balance out. But also what I'm hearing is that many of those that have been renting and have been saving for that deposit. And I think we we do speak about this quite frequently, not just renters, but also other other other other homeowners who are looking to probably continue to to purchase again, is that as our, I guess, interest rates are continually increasing, even though those property prices are coming down, it's actually becoming harder to borrow. And it's becoming harder to save because of everything costing so much money.

Kasey McDonald (18:27) And I and I saw, I actually just saw an article this morning where it to ensure that they've got a roof over their head, because renters are so fearful of as well of what the you know the eviction processes are and they don't want to be homeless or or cause their family to have to go through those additional stresses, is that they're then choosing, okay, well I have to pay my rent. Great. But then they're looking at all of their other expenses and going, well, what bills can we just kind of bypass on the side? Right? What what can we push to side this month because we literally can't afford it? And one of those in particular is electricity, because we've seen it as well in the last three months, the electricity prices skyrocket. So if we've got a market, you know, where buyers and sellers are also gridlocked, like it's because things are, you know, the banks aren't loaning, it's costing its costing people more or a longer time frame, I should say, to save. So as as things go up, the banks are now saying you need another twenty or thirty thousand to go towards that deposit.

Kasey McDonald (19:30) So then how much longer is that going to take them to actually get in the market? Yeah. So there's kind of all of those things, yeah.

Peter Schravemade (19:34) Yeah, yeah. And I all of those things add up. And yeah, yeah, and then and then we have a lack of confidence. Like let's not forget that we no one's no one really knew this was coming other than the federal government because they told us at the last election that it wouldn't. So, you know, we got all of that and then we've got a supply and demand issue on top of that. As part of this, I I noticed that there are a couple of announcements through ASIC this week. I I know I see Domain Holdings Australia have taken a property group, PB & Co Projects, to the New South Wales Supreme Court for winding up hearing over unpaid debts. Now, those guys are actually developers, technically not real estate agents. They are luxury developers. Actually, I don't know if you have ever heard of these, but the their key projects are Aire, A-I-R-E, Fifty Two Black in Victoria, Clendon Residences, luxury residences near Toorak.

Domain, PB & Co and developers in the winding-up lists

Peter Schravemade (20:30) And Eblana, but I you know, we we've heard a lot about the the development in industry really struggling. And I I see Justar No 1 Property Group in the ACT Supreme Court today and Bright Partners Property Group, they're all entering liquidation. So you know, I think we're seeing quite a few vendors and landlords and developers that are struggling for cash flow at the moment, we're winding up, you know, in in some way, shape or form.

Kasey: mergers instead of liquidation

Kasey McDonald (21:01) Yeah, I'm also seeing a lot of mergers. So I'm seeing a lot of their smaller businesses that might have a smaller rental portfolio. They've probably got, you know, two, three, four maybe sales agents are all looking at how which do we could continue to remain afloat. And by doing that, they might then need to actually join a larger business. And sort of, I guess, run their business within that business is what I'm seeing a lot of. And and a lot of those mergers are now starting to appear as well. So I think there possibly are also some of those options for any of our listeners out there who are looking at their cash flow and expenses right now and thinking, well, we don't really want to wind down and we don't want to get to this kind of liquidation stage. I think, you know, now is also the time to be reaching out to some of your competitors to understand whether or not a merger might actually be a better option for you.

A third of one CRM's independents gone

Peter Schravemade (21:57) Yeah, yeah. And I spoke to a a fairly major CRM this week who had suggested that about I I I think it was in the vicinity of just under a third of that clientele had wound up wound up an independent and moved somewhere else. I th I think that's also related to a AML/CTF regulations and a bunch of other things coming in. Lot of people have decided that they don't want to do it anymore. They just don't want to do the sales person thing and not really run a business. And I and I understand that. I think I think, you know, that's a lot of pressure off certain people in a market of uncertainty. This this next story, the rent roll trap. We've spoken about this a few times, right? So we've we've talked about you know, a massive churn. I know you were down in Victoria this week and there's a lot of lot of churn amongst the rent rolls. And I see Marshall White's Anthony Wiseman warned on Real Estate Business this week that rent roll buyers and bank valuations are stripping non-compliant properties out of rent roll valuations entirely. So this is a minimum standard thing.

The rent roll trap: compliance and 'worth zip' valuations

Peter Schravemade (23:09) So if the rental doesn't meet minimum standards or lacks compliance documentation, buyers value that management at zero worth at settlement. And I think there also you know what we're seeing is desperate fee discounting and twenty four you know twenty four thousand dollars of arrears. So this story is Cara Bergmann actually a really good friend of mine exposed how burned out cut price PM teams are relying on unmonitored AI bots and they're missing basic arrears which left one landlord with twenty four thousand dollars arrears on on you know unpaid debt. So there's there's a bit of that and then there's the th yeah, don't there's the another non-compete in there. What what are your take? Like this kind of sits in your area. What do you think of these stories that are coming out?

Fee wars, AI bots and $24,000 in arrears

Kasey: what due diligence on a rent roll should look at

Kasey McDonald (23:59) Yeah, look, I actually was expecting that we'll probably start with that first piece with Anthony Wiseman's commentary around the buying and selling of your rent rolls and around the valuations. I was probably expecting that this is something that was always going to come into play. And I think the standard, I guess, due diligence or valuation process has just been typically on what the management fee income has been. And I guess looking at, you know, how many properties they've got currently vacant, what's their average rents. It hasn't really gone into a lot around rental standards, I guess operational compliance, documentation. It's never really kind of been that piece. And whilst you do the due diligence to understand where it's positioned, to then be able to say operationally it's been managed well and maybe that could help support that dollar value increase, but it's not what the banks typically value it at, right?

Kasey McDonald (24:56) So I've been expecting this to come in for a really long time because many of our great friends who have purchased businesses, and I was only speaking to one actually a couple of weeks ago, who said that they were able to obviously get that valuation dollar down just because simply nearly 50% of those properties that they were looking to take over were were in some form of arrears. Their condition reports were still very, very basic. They weren't utilising the technology platforms. So a lot of it was still done quite manually. So they looked at all of that to went, well, hang on, we're only prepared to pay this. So I'm actually quite pleased that we're seeing these types of standards now coming into our industry. That if you are then looking to sell, you need to make sure that those portfolios are run well, that you've got everything in place.

Kasey McDonald (25:49) Because they're going to be worth nothing and they should be worth nothing if you haven't been able to effectively manage them in the way that they need to be managed. And so many changes are now happening that you're going to be required to have particular evidence. So I I actually think it's a really great thing if this is now what is is now going to be occurring as a future state of buying and selling within our industry.

The BDM who built rent rolls at 2 per cent

Peter Schravemade (26:14) Yeah, yep. It also gets rid of the I I had a friend actually, an or let's go on an acquaintance that I knew was an a very talented BDM, and he would jump from one area, high growth areas generally to another, and he would build up a rent roll sort of let's say within two years, he'd try and get them to 500 or a thousand now. That's very difficult at the moment, but he was quite good at it at the time. And the way he would do this is he would attract the lowest common denominators in the suburb by discounting rent, rent fees, rent management fees. So, you know, he'd go in and offering introductory rates for the first two years at 2%, and then they'd go up. And then he would invariably sell that rent roll that he'd just stolen off all of the operators in the area. Not stolen, but you know, landlords will make a decision on that and and they'll go across.

Peter Schravemade (27:07) And he wouldn't sell that at the end. But, you know, I spoke to a couple of people who picked up the rent rolls that he he purchased and they were like, my goodness, it was just a absolute mess. You know, not only did we have below minimum standards, we had some in the they weren't being managed properly. They there's no structure to the rent roll. So it it it you know, it's kind of gone are the days where we see that kind of thing happening now, and I think we're better off for it.

Burnout, inherited portfolios and why not to discount fees

Kasey McDonald (27:32) Absolutely. And I think it kind of brings into that piece around kind of burnout then for our property managers. Because if we are then managing those portfolios in that way, when we then transition that into a better and well-run portfolio and to then align with standards and operational structure and utilisation of technology in the right way, you then face I guess those kind of investors that haven't experienced that more importantly, neither of those tenants. And then it's can start to actually cause probably more pressure for all parties involved because there's an expectation of what do you mean that has to happen like that now? That's not how we've ever been managed before. So it it can actually have I guess that negative effect, right? Of when you co when you're buying that business and bringing something that hasn't been run well, actually then into your business. Now you've got an opportunity to absolutely turn that around, which is fantastic. But yeah, I I'm actually really looking for I like I'm really pleased to see that we're now considering these things as absolutely important and imperative when we're considering buying those rent rolls. And for those looking to sell, please make sure that you're doing your own due diligence on your rent roll.

Kasey McDonald (28:49) Get in there and audit it and make sure that everything is where it needs to be. Because then we're faced with these situations as Cara Bergmann exposed through REB, not just with the burnt out, but the fact that you've got then taking over properties where there is significant arrears. And sometimes, and she did explain that that owner was financially well off. And so probably wasn't monitoring statements or wasn't monitoring what was going into their bank account. They were residing overseas and they didn't really kind of, I guess, need to monitor their income as much. But then in understanding then what's actually occurred, then for another agent to take over a significant mess like this, it creates a lot of unnecessary work when we, if we're actually all following the same process. We don't need to cut our fees, Pete. We all know that, right? You don't need to cut them to win the business. And I just don't think that that's the right approach that we should all be taking in our industry.

Kasey McDonald (29:51) To go let's discount our fees just to win business. That's not, I don't believe, and I'm very passionate about that. We should not be doing that to win business.

Peter Schravemade (29:59) Yeah, well, and I I I don't know that I'm your typical landlord, but as soon as I get a discounted fee put in front of me, I'm like, well, what have you cut from the massive list of things that a good property manager does in order to be able to service that? So, you know, I if you're a landlord listening and you're thinking there's a there's a a four percent property management fee in there, like I I know how much it costs to service a single house and I I I think I think if if there's a four percent, you need to look at the terms and conditions and see that all of the the the things that you would expect to be carried out are carried out as part of that management. That the the yeah this this last piece here, which is an interesting one. I I'm not at familiar with the REEF CEO. Do you know who that is? Bryan Wilcox. I've never heard of him. But

Non-competes and the CRM walking out the door

Kasey McDonald (30:47) No.

Peter Schravemade (30:47) He he's speaking about in this article the federal push to ban non-compete clauses. Could let BDM and sales staff walk across the road on Monday and legally strip an agency's client book. Well, that's an interesting concept. I mean, how many wars have we seen started over agents who leave one agency and go to another agency the next week with a USB contact list? We saw one here on the Sunshine Coast famous article that ended up in court where a Noosa agency had had their entire CRM ripped and then all of all of a sudden the next day another agency started with a very, very similar CRM list. And I and I think that agency was successful in in in in in in repr getting reparations for damage to business for s you know well I don't know what they call it. Is it espionage? I don't know what you call it when you steal. I don't know what's even tried under. But it's a it's an interesting one, right?

Peter Schravemade (31:47) Like because if that law does actually come in and and there's no loyalty to an agency and you're not feeling wonderful at the time, does that not allow the people across the road to go, Righty-o, here with better conditions and and across your cub if there's no no non-compete in place. Non-competes are actually serve a purpose, I think.

Kasey: database discipline and the annual owner call

Kasey McDonald (32:09) Yeah, I think it there's probably, I think, two pieces to this is also how and which our agency principals are are managing their databases. And it's kind of that CRM question, right? I think the CRM is that data storing facility. And w where is all yeah.

Peter Schravemade (32:26) Well, I can answer that question. Most real estate agency principals are not handling them well. I know I know that. I know that from from it's my it's in it's in my area. Yeah.

Kasey McDonald (32:31) Mm-hmm. Yeah. Yeah. Do they know what's going in? Do they know what's coming out of it? You know, all of those things, right? Like, and I guess as a BDM, we're we should be, if we're not, we should be ensuring that that data or that that procedure or or protocol in your business should be in place. That BDMs and salespeople are entering the data, whether that's a buyer, seller, landlord, prospective, whatever that looks like. Should be entered in and the way in which they're communicated should remain within that. And there should be some protocols around that. Now I also appreciate that you can't stop them also writing names and numbers in a notepad and kind of keeping that. I I certainly do appreciate that from that sense. But I think that we could be doing a far better job within our own four walls to be ensuring how in which we've got particular systems and processes in place to try to avoid this as much as we possibly can. But my second piece to that is also we tend to form a relationship with one person, do we not? Like as in I'm the BDM, who else other than the BDM is also speaking to those people? Other than that particular one property

Peter Schravemade (33:44) Yeah, fair point.

Kasey McDonald (33:45) Manager that is also managing their portfolio, who else in the business is ringing those landlords or rental providers and having conversations with them? So do we have multiple people? And multiple people in an effective way, I must say. So you know, principal owners who I guess own that asset. At what point in time do you spend time throughout your 12 months? And Ashleigh Goodchild, our great friend, over in WA, does this amazingly. And she has that structure in place that she calls those owners once every 12 months. And that's just can simply be to check in and do that survey of them, ensuring that they don't her team are delivering the service that was certainly promised. Is there anything there else that she could be doing? Is there something else that they would like to be done as a part of their service? You know, hey, I can see that we've done this many price increases, fantastic. Or maybe we're under slightly undermarket, but I can see we need to do some maintenance. So she's also supporting particular outcomes to be done within those calls. And I know she does it incredibly well. And that has meant that as a retention strategy, she's in fact grown her business.

Kasey McDonald (34:56) But how many else are actually doing that to avoid these types of situations? Because if the client loves you, trusts you, is loyal to you, it's they're they're loyal to the person. That's why they leave. It's because the principal's never ever spoken to them before.

Peter Schravemade (35:14) Yeah, yeah, yeah. Well I I think I'm fortunate in both my instances. I know the principal and that's why I'm at the agencies I'm at. But I think I I do I do actually think that's quite rare. Let's move on. Let's let's look at compliance changes that are coming through the industry. And there are three articles that I've referenced today. So one of them is it in real well, there's an article out at Real Estate Business and that it'll all of these links, by the way, will be up at beforetheweekend.com. Under the episode if you want to go and have a look at it them. But there's an article out on the hidden risk of do-it-yourself AML compliance. Look, I think I think everyone everyone in the business has been saying it's quite difficult to to be in the DIY AML compliance.

Compliance: DIY AML and fake AUSTRAC scammers

Peter Schravemade (36:02) I remember I heard Antonia talk about it on the the roadshow that went through the REIQ and she was basically advising, I think at that point that look it's it's it's it would be very difficult to to DIY AML and sh you know there was a suggestion that y you can get help through software on that and I'm I'm not gonna advertise any of the brands but there there are plenty of them out there. I don't really want to focus on that other than that you know to remind you that yeah you know we we said last week AUSTRAC are are coming out fining real estate agents who haven't

Kasey McDonald (36:39) Hm. They're starting to fine. Yeah.

Peter Schravemade (36:41) Yeah, who haven't registered and and so if you're one of those who has registered and you're looking at DIY, don't do it. I I my my biggest suggestion would be become a member of your REI and seek seek help from them. The second one's interesting. It's a it's a another article that is suggesting that AUSTRAC have been targeted as a I guess almost as a handy front for scammers who are are pushing messaging to real estate agents as suggesting like it's a it's a scam or a phishing scam where they're asking for information from those real estate or they're impersonating the AML officials. So just a bit of a reminder, you know, and every time these things come up, I I don't know why, but I think of our dear friend Peter Lynch at Aon Insurance and how he'd be having a conniption over this article. But the the the the the reality is that scammers will find anything that they can to try and get personal details. So maybe just a heads up, if you are receiving communication from AUSTRAC this week, do your best and be really diligent to check it's actually, you know, from who it says it is. And and this is one that you bought to me.

Peter Schravemade (37:54) So I'll I'll get you to talk a little bit about this. But we see Victoria bans rental application fees. There's been a couple of things as well that have come out of Victoria. So I don't know if you want to go to what your experience was down there this week, but the the application fees and and tightening of bond rules is one article and there's a few others in there as well. Isn't there? There's changes coming left, right, and centre to that industry.

Kasey's week in Victoria: bonds, application fees and safety checks

Kasey McDonald (38:21) Yeah, look, had the privilege of being on the ground in many of the offices this week in Victoria. And you can really sense their their pain. You know, they're they've kind of just gone this is just kind of again another change and they're kind of taking it in their stride, but you can just really see that because there has just been so many, and some of them, of course, are being I presented as we've seen across other states where there's maybe not those regulations or exactly how much this is going to really play out. Like has that form been released yet or what does this actually mean for us and how are we operationally going to to kind of implement this? So there's still some things that I think are, you know, up in the air, but they're definitely taking it in their stride. However, the pain that they're feeling is it's that conversation of there are now changes again. And they've got the rental provider saying, well well, why are you making these changes? So the poor property managers and those business owners are are getting the blame. It's you. It's you making these changes. And so the conversations they're having is it's not us. It's the government that are making these changes.

Kasey McDonald (39:33) So they're spending a lot of time just talking to rental providers about here's another change, here's another expense, here's another way in which we've got to operate. And so the key things from this week that came out was that they now, as in the rental provider, so then that's the agency managing on behalf, need to notify the renter before claiming against a bond. And they have to produce evidence to support the claim. So under the previous system, you know, the renters often lost money as a part of their bond to potentially move to the next home, which is fairly standard. Sometimes there are things that are deducted from the bond. There could be some minor cleaning. But there obviously is always that conversation that that typically does occur. But in this situation, before anything can even be made, you can you must go to the renter with, here's a quote, here's evidence, here's everything, and have that conversation. However, was what probably wasn't clear or what their property managers are are questioning is is can the renter just go and claim the bond? And then what does that actually mean? Was a question left open ended.

Peter Schravemade (40:43) Yeah, yeah, because it's already transferred, right? Yeah.

Kasey McDonald (40:47) Left open-ended. Then they've got the transferring of the bond in play as an example as well. Yeah. So not only that, there's no charging on application fees now. Gas and electrical safety checks are now mandatory every two years for every property, covering both new and existing leases. So they have to ensure that a licensed gas fitter is also checking that gas ventilation before any draft proofing work begins. There's new laws coming into play next year around energy efficiency standards as well: cooling, heating, hot water, shower heads, installation, sealing insulation as well. So they're all starting to prepare, ready for what do these properties look like? So, Pete, many of my conversations with property managers were we're having these conversations, and investors are saying, This is too hard. Can you put me onto a salesperson? I'm just gonna sell.

Peter Schravemade (41:45) Yeah, which we we're we're about to look at. Like I think I think they're saying you know, most of the most of the the sellers in Victoria at the moment were investment property or are landlords that are getting out. It's just too difficult. Don't forget to, like if you're an investor and you're listening to this, sometimes there's opportunity in that. Like when everyone else is selling, yeah, you know, that's the the opportunity to be buying. So have a think about that. We've got some quick fire articles that are here. There's the landlord licence clickbait that I think came out from the Greens, the Victorian Greens today, and the 40% ex-rental reality. So if I understand this, the Greens talking about bringing in Victorian landlords facing mandatory licences and three strike bans.

Kasey's mailbag: landlord licences and Melbourne's ex-rentals

Peter Schravemade (42:36) I mean I I think this is just so stupid that we we don't need to necessarily talk about it. But what you know, wha w what what what are your thoughts? Do you think do you think they've got Buckley's of getting this up or is it just trying to win votes?

Kasey McDonald (42:51) Look, I think it's definitely a vote play, for sure. A a lot of the property managers I spoke to on the ground this week was sort of had their own little giggle about it and went, yeah, okay, try that. As if, you know, as if you're gonna get a landlord to or rental provider to go and then get a real estate technically a licence to be able to have that property. You know, everything regardless of what the government is doing in that state is making investors just move away. So instead of our country thinking, how do we make it better and easier from a supply perspective as well, we're not. We're just pushing it away. And then we're just not going to have supply. We're we're making investors choose to get out of the market. And that's where it was the the figures down there were showing that more than 40% of of Melbourne's sales listings are actually coming from property management departments. So that's those investors. That are just simply saying, I've had enough of this and I'm gonna sell. Because they don't need to

Peter Schravemade (43:50) Yeah, and he's the pri

Kasey McDonald (43:52) Have their homes compliant. And that's something that I was chatting through with them. That let's just say the owner does need to do all of these works to get it to minimum housing standards. They don't need to specifically do some of those requirements before selling. So they're all saying, Well, I don't now need to go and spend this 20, 30, 40,000 to try to hold it to then not really make my money back initially in that 12 months because the rental prices down there are also quite lower than actually I was expecting them to be. And so therefore then they're just saying, well, let's just sell.

Victoria's $1 billion land tax shortfall

Peter Schravemade (44:29) Yeah, yeah. And that's in the next article. The Victorian the Victorian government is experiencing a massive shortage in in in taxation dollars or that they're one billion short because landlords have sold up fourteen thousand rentals lost since twenty twenty three and and we wonder why the the cost of rent is rising. Maybe not so much in Melbourne, but the yeah, that w that's that's obviously the scenario we're seeing at the moment. And we should also make special mention of Cotality's Bend It Like Buyers. So this is the article out from Cotality, which is the consumer sentiment report. Very interesting one. So that out of that, two takeaways like four point nine percent is the magic number, and they're referring to that as the median mortgage rate. Australian buyers say that they want to per persuade them to participate in the housing market, which explains why there's a standoff we're at 4.6 at the moment. And we're expected to go up at 4.9%. And then there's upfront cash. Well, so one in every three buyers out of this are unsure whether they can afford the upfront housing costs. Yeah, basically 20 27% only.

Cotality's Bend It Like Buyers

Peter Schravemade (45:48) So less than one third can afford the upfront housing costs that are associated associated there. Some excellent research out of Cotality again, in that article. But and I and I noticed last night, like I don't know if you religiously watch the news like I do, Kasey, probably not. You might have been watching The Block, but unemployment has has

Kasey McDonald (46:09) I was watching the Rugby League World Cup. The yeah. No, no, no, no. We I

Peter Schravemade (46:12) Of course you were. How did how did Arhee go with that result? I don't think he would have liked it very much.

Kasey McDonald (46:19) I went to bed when the Kiwis were up and I could hear a few yeses,

Peter Schravemade (46:22) Yeah, and

Kasey McDonald (46:23) And then I heard yep, and turn the TV went off. So I can only imagine. Yeah. Yeah, he did. Yeah. Yeah.

Peter Schravemade (46:26) That yeah. R re Yeah, they got Reese Lightning came in and destroyed them a little bit at the end there, I think. But you know, yeah, no, I was watching the news last night and unemployment has has jumped again, which, you know, is not a good indicator for our economy. I think it's it's gone to four point seven percent. Don't quote me on that, I might have that wrong, but it it ha is up significantly. Something like a hundred and twenty five thousand extra people looking for jobs. A quick rapid fire wrap up to close it off. So yeah, where the investors actually built went, new builds up 24%, the existing is down nine. Investor loans on existing homes fell by nine percent. So there's a report out by PropTrack Terri Scheer investor report, well worth looking at. The investor loans falling is out of that's out of the Broker News area there. And rates that are a 15 year high, but commercial investors aren't flinching. So I think that speaks to the fact that a lot of resi investors have jumped over to commercial, which is yeah,

Quick hits: investors, commercial and construction

Kasey McDonald (47:30) Mm-hmm. Jumped. Yeah, definitely.

Peter Schravemade (47:34) Yeah, yep, definitely up. There's another article on construction bottle bottleneck and the build to rent cost wall. If you want to have a look at that, we'll have that on our website. And then there's some other talking points here. So high-end homes are sliding, according to an article out on October 12th. South Australia's five year property winners is was out on October fifteenth. There's some articles out from Newcastle. Rental market gives tenants a break. I I don't actually know if that's the case. And then there's some articles on lower immigration versus property prices. But all in all, you know, it's it's been a it's been a difficult week, I think, as far as real estate is concerned. And it you know, I'm sure if you're looking at the news, you'll see all of the mainstream articles about measured market correction and whatever else. But you know, this week we've tried to bring you some of the emotion and the I guess the sentiment going on behind closed doors in Australian real estate right now. And and I'll I'll return to the first article to suggest to you that you need to reach out to those who you care about in the industry.

Final word: call one or two people this weekend

Peter Schravemade (48:45) And just ask them if they're doing well on this on this weekend. So if you're about to, you know, if you're hearing this and you're about to jump into your your Friday afternoon beer, do me a favour, just pick up the phone and call one to two people and see how they're going in in you know, in their business, in their personal lives. Just to you know, we we we don't we don't want this to become a a a pandemic. You know, the warning signs that we're seeing at the moment, we don't we don't really want that to continue. And I I'm sure you're on board with me on that one.

Kasey McDonald (49:13) Yeah, absolutely. And look, you know, there not only of course is the the Rise Up Real Care for our real estate industry, but of course, you know, there are Lifeline, you know, there are other causes out there and other lines that you can be also utilising to reach out if you do need help, if you do need to speak to someone. And I think you know, by reaching out and asking for help, it doesn't also mean that you're weak. And I think as a human, sometimes we feel that that if we are asking for help or if we're wanting to talk about maybe how we're feeling, that that's classified as that or that's how we feel. W we're not. We're not. We all need to come together in these times and we need to help each other. We need to to show the learnings together, and hold each other up and through this instead of I guess fighting and competing. Just to kind of get that commission through the door. Let's have the human emotion approach.

Sign-off

Peter Schravemade (50:10) Yep, agreed. And I think we'll leave it on that note for Friday, the sixteenth of October. Wherever you are today on this gloomy Queensland Friday, I hope you're looking at some sunshine better than we are at the moment. But yeah, before before you head into your task for the weekend, we wish you all the best in whatever professional endeavour you are doing, whether it's putting up open signs or sitting on open open for inspections. I I hope you get a decent set of traffic through. But I I'm always appreciative when somebody jumps on and listens to us at Before the Weekend. As per usual, you can find us on all of your streaming services. If you've got any suggestions for us, send it through to hello@beforetheweekend.com. And yeah, on behalf of Kasey and myself, thanks for listening. And we'll catch you in one week's time. Same time, same place, same bat channel. And that's a wrap for Before the Weekend.