PM Collective - The ART of property management
The ART of property management with Ashleigh Goodchild is a leading platform supporting collaboration not competition through an online community and events throughout the year with one purpose: to create happier property managers. She creates connections for property managers looking to create momentum in their careers and personal life. Join Ashleigh and her guests as they discuss challenges, struggles, mental health, mindset and give advice to property managers and anyone in the industry. To get the support in your property management career, join our PM Collective Facebook and Instagram community.
PM Collective - The ART of property management
Bronwyn Evans on Adapting to Legislative Changes in Real Estate in QLD
Discover the secrets behind long-term success in real estate with Bronwyn Evans from McAdam and Turnbull Realty. With a fascinating journey that began in 2006, Bronwyn and her husband turned a small business background into a thriving real estate empire. Learn how they became sole owners in 2012 and maintained over a decade-long relationships with more than half of their clients. Hear firsthand about the unique challenges and rewards of property management, and the importance of preserving the legacy and values of their agency in Toowoomba.
Join us as we explore the impact of Queensland's recent rental legislation changes on the local market. Bronwyn breaks down the new regulation limiting rent increases to once every 12 months and how it compares to similar laws in Western Australia. We discuss tenant rights for making structural changes to rental properties, discussing potential financial implications for both tenants and property owners. Discover how experienced property managers like Bronwyn navigate these changes to support both tenants and property owners, ensuring fair treatment and maintaining strong client relationships amidst an evolving industry.
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today we have bronwyn evans, who is from mcadam and turnbull realty joining us. And bronwyn, welcome. Thank you. Good morning, how are you? I'm good now. We first met. I think we did meet in person, didn't we at an igt conference a couple of years ago?
Speaker 2:yes, yes, and I started following you and copying everything you do because I'm on the total other coast to you, so I can.
Speaker 1:Absolutely. You know, I had someone message me on Instagram actually the other day on the weekend and he said oh, I really love that podcast. He goes I'm stealing all the ideas, and I was like that's what it's there for, it's absolutely for everyone to use and to copy. There's a quote that my partner cringes that, but it's very, very true, and it's that we can, um, share the recipe, but the sauce tastes different, and that's what I think it's all about.
Speaker 1:We can all do exactly the same thing, and it's always going to come across different to our clients, and that's that's the beauty and that's why we should never worry about sharing and, you know, passing lots of information on, and you know I do the same with other people as well. So that's what it's all about collaboration. Now, for those that don't know you, can you do a bit of a brief intro for me of you know who you are, where you've been in your career, where you do a bit of a brief intro for me of who you are, where you've been in your career, where you are now in your career.
Speaker 2:Well, I started in real estate in 2006 when my husband came home after being a sales agent and he said let's buy a real estate agency. And I said okay because I had had a background in small business. My parents had always owned a small business, so for me, customer service and owning your own was in my DNA, even though real estate was new to me.
Speaker 2:So, we purchased a small agency and then, in 2012, we merged it into McAdaman Turnbull Realty and now we are the sole owners. So McAdaman Turnbull Realty has been here since 1980. A lot of our clients have been with us the agency that entire time and in fact, 51% of our clients have been with us for more than 10 years, so that longevity really develops really great relationships, and so that's what I love about it really developed really great relationships, and so that's what I love about it. I love the people and the diversity.
Speaker 2:No one day is the same. I think we've got the best job in the world. I really do. It's just so unique in the way that we get to interact with people and respecting that relationship, particularly with the tenants. Like, we're in the tenants' en-suites, we're in their bedrooms on a regular basis. That's a really unique position for us. And then we, on the other hand, have such lovely clients, most of them who are not here and we very rarely see in person, so that comes with its own challenges as well. So that's what's brought me here and keeps me here is that we've got the best job in the world as property managers.
Speaker 1:So good? And was your husband in real estate when he suggested that you buy real estate?
Speaker 2:He was. He was a sales agent here at McCannam and Turnbull Realty and John Turnbull had started nudging him of it's time to retire are you going to buy me out? And we were like, no, you're too big, we can't afford you. So we bought a smaller agency that we could afford, and I guess the dream was always to merge back in here, because John Turnbull being the owner of an independent agency, he was also very particular about who bought the rent roll. Very attached to his clients and the service they'd been providing, so he wanted to make sure that he sold it to somebody that shared his values. And so we came in here with a business partner who had also been under the umbrella of McAdaman Turnbull and sadly, he passed away away in 2017 and so we've been on our own since then. So quite a journey, but yes, Lachlan had been a sales agent originally and really loved it, loved the people as well.
Speaker 1:And totally random question. But with the name McAdam and Turnbull obviously fully understand why you would hold on to the name, because there's legacy there and history. Do people think that you are an employee because of the name? Do you ever come across that?
Speaker 2:They do sometimes think I'm an employee because my husband is the principal as well, so it's his name on the front door, which is great because, depending on the problem, you know it might be his because his name's on the door. Um, but yeah, occasionally people do um, either assume I'm an employee or assume I'm a Turnbull or a McAdam. That happens a little bit uh as well, but I really don't mind um either way.
Speaker 1:No, and I'm the same as well, because sometimes I sit at the front desk because really don't mind either way. No, and I'm the same as well, because sometimes I sit at the front desk because we don't have a reception and when I sit at the front desk quite often people just assume I'm the receptionist and I actually quite like it. I am not. I'm definitely not that type of person that corrects them, but the assumption that a lot of people have and I would think that, yeah, I just guess I thought you might have got it with that name not being sort of a generic name, but yeah, no, it's lovely that you've sort of held on to it, definitely for the legacy, for the area. Tell me a little bit about the area that you are doing property management like and what's the size of your rent roll.
Speaker 2:So we're here in Toowoomba, which is about an hour and a quarter west of Brisbane, and we've got 120,000 people in the area that we service. So Toowoomba Regional Council is a little bit bigger than that, but immediately we've got 120,000 people in the city and immediate surrounds. Immediately we've got 120,000 people in the city and immediate surrounds. So we do have some rental properties that are in the surrounding satellite towns, but the furthest we would drive would be half an hour to any of them and we've got 460 residential rentals.
Speaker 1:Yeah, great, and so would you call it a regional area, or not necessarily?
Speaker 2:It is a regional area. We're very proud to be regional In some ways. Toowoomba is a very big country town still, but we're maturing and we're growing and being so close to the capital cities or Gold Coast or Sunshine Coast makes it really accessible. But we're a bit of an economic powerhouse over here, to be honest, and we're an insulated economy. We've got five pillars and we're not really affected by seasonal issues as such, in that we've got a strong agricultural sector that we support issues as such, in that we've got a strong agricultural sector that we support. We've got a strong mining sector which, whilst is to our west and our north, we're still the service hub for that. We've got a huge healthcare industry, very large education sector here. There's a private school on every street corner and I think there's five boarding schools and then we've got a tourism component. So the economy is always strong, which makes it really good for investors. They love us. We're not the place that you come and flip a property overnight. We are a stick and stay.
Speaker 2:Toowoomba has had just steady growth over the last 30 odd years. We don't do the big dips and mountains and valleys that other cities will do. We are quite stable in that regard, and that's what the investors like. That it's good long-term growth and there's always demand for tenants because there's always something going on. We've had billions of dollars' worth of infrastructure put into the city and surrounds over the last 15 years, and so there's always job opportunities. Our new hospital is starting to break ground, so that's going to bring more workers to town, but there always does seem to be projects bringing us here. We've got a new airport which is designed to send freight into particularly into Asia, which has opened up another world of business opportunities for us. So, yeah, it's a very exciting city, although one that perhaps flies under the radar, because we are so close to Brisbane.
Speaker 1:Yeah, you did an excellent summary of Toowoomba. I love it.
Speaker 2:Yes, yeah, we're very happy here.
Speaker 1:So tell me about what's happening with the Queensland laws. So, just before I press record, I mentioned that we had a podcast with the Victoria Property manager, and I love finding out about what's happening in different areas. I think, as property managers, we shouldn't be ignorant to you know what is happening with different legislation, different laws and, potentially, things that could be coming our way, but also using the opportunity with new laws that you might be experiencing and then finding out how it's worked and how it hasn't worked, which would then potentially be reflective on our legislation, how we all deal with things. So tell me about the legislation. So, have you recently had changes in Queensland?
Speaker 2:We did on the 5th of of June. So, to give you some context, we had our stage one of rental reforms be announced, and then we had COVID and that changed everything. We had our COVID laws, and so stage one was implemented and there was always going to be a stage two, and we always had a bit of an idea of what that would be. Then, you might recall, in August 2023, the Federal Cabinet met and they made some decisions about what they were going to do with rental laws back in the various states. So then Queensland came home and decided that they would make some of those changes, and Queensland's heading to an election later in the year and our Premier and Housing Minister are vote hunting and there's no other way to describe it. And you can see all this on social media, where they came out and called property managers dodgy On several occasions. It was constant, it was relentless, and the REIQ was contacting them on our behalf saying stop just blanketly saying that property managers are dodgy and let's start talking about elements of the industry that might be dodgy, because that's how you usually describe, you know anything, and let's focus on what we can actually achieve.
Speaker 2:So legislation was put into our parliament and it went into a committee system with very little time for any consultation. It came out of committee, ran through the parliament and some minor amendments made at that point and then all of a sudden it was going to be this is starting on ascent. So we had some laws that were going to start the day the governor signed the forms and we didn't know what day the governor was actually going to sign. And so we just suddenly so we knew all was coming. It was just that not being able to say it's going to start next Thursday proved a bit problematic. On one day we had a perfectly valid lease and the next day we didn't. So we had to pull a few of those that had been signed before their execution date. So the big changes are around 12-month rent increases. So you can't increase the rent on a property unless it has been 12 months since the last time there was a rent increase.
Speaker 1:Sorry, just stop that there, because I heard that and this is so relevant for me or for any WA listeners here, because I heard that that came in.
Speaker 1:And so what Bronwyn's saying is that the rent increase is staying with the property, so it can't be increased with the property can't increase.
Speaker 1:And where that's relevant for WA is that we have just had it come in where the rent can't be increased more than annual for tenants, but it's not with the properties, with the tenants.
Speaker 1:I just wanted to make sure people understand that, because what a concern that I've got is that landlords may potentially vacate tenants at the end of a six-month lease so that they can put the property up to market rate, which is morally wrong to do that, and I would be mostly upset with the landlord if they were doing that with that intention. But the reason why WA, we need to really make sure that we do look after tenants in this sense and make owners know that morally it's not right to vacate a tenant after six months, that you know, morally it's not right to vacate a tenant after six months, because if we don't and this becomes a problem, this law that Queensland has got is exactly what's going to happen to us. So yeah, so I just wanted to add that little bit in and then you can let me know how you guys are dealing with it, because did you originally have the rent increase with the tenant and then it's changed to the property?
Speaker 2:So just 12 months before the government had brought in legislation very sharply and we could not increase the rent unless it had been 12 months, since that tenant had previously had a rent increase. So we already had that. And then the government tell us antidotally that people were indeed vacating the property at six months. I found that really hard to believe because the property is at a highest risk of wear and tear when you're moving people in and out and you've got let fees and associated marketing etc. So really any owner that was doing that wasn't actually gaining but nonetheless. So now they have moved it, that it is the property that has the rent increase attached to it. So that means actually that it doesn't matter if it's sold. The property can be sold and this rule still applies. The property can be vacant and you might decide to do some renovations, throw on some new carpet, let's put it in an air conditioner you can do that. But you cannot increase the rent until it has been a full 12 months since the last time the rent was increased.
Speaker 1:Are you kidding me?
Speaker 2:Even if you do renovations, there is no, there are no exceptions in that regard, none. Wow, it's making. So what the government was wanting to achieve was rent capping. But they couldn't do rent capping. But they're trying to do it by another way. So if a tenant breaks their lease and they're under market value, it is going out to the market at that value that the tenant's been paying, and then we're putting information in the write-up to say the lease will be increasing at the 12-month mark.
Speaker 2:We've got to put the date of the last rent increase on our general tenancy agreement. It sits there and that's proving problematic because sometimes it hasn't had a rent increase, like there might be a brand new management that was owner occupied or a brand new build, and so there's some logistical issues with us fully completing the form. But it does make it very difficult for owners who have in the past had their property under market value trying to do the right thing by their tenant. Um, we've had an owner recently who gave their tenant a five-month lease because she was very excited they were trying to buy a house. So she helped them out. They had a small rent increase for that five-month lease. Um, they moved out. She has spent money on carpets, paint, window furnishings etc. And that property had to go out to market at $150 below market value after her improvements and after her looking after those tenants and she's got seven more months at the really low rate.
Speaker 2:So that will actually achieve what the government wants to achieve, because any other comparable property that was on the list that day people are going to look at it and go for the cheaper one first, of course, so it's going to drag down the price of the one that it's competing with, and so we've got these laws written for when the market was really really hot and the vacancy rate was really really low. Now, that's a poor way of writing legislation. Legislation has to be more future-proof than that and operate across the market, but that's not what the government have done in this instance, and it looks like parts of the legislation are just really poorly worded itself. So that doesn't help, and we've been putting back feedback through the Department of Housing, particularly around this. Oh, you have to put the last date of the rent increase on the general tenancy agreement. It's like well for new managements. Somebody's just purchased it. All of a sudden they're going back scrambling, looking for information.
Speaker 2:So that has been the biggest part of the law change. There's other changes that are coming which are due to start on proclamation, which means when the minister makes an announcement of a date, but we are less than 100 days from our state election and the government will go into caretaker mode 30 days prior to that. So we have no idea if we're going to see the rest of the laws now or, what's more feasible, is early next year. But it's been, yeah, an interesting ride, particularly as we got the laws with no notice, knew they were coming, but not sure what day the governor was going to sign the bill and then all of a sudden like hey, let's go.
Speaker 1:Yeah, wow, I've got so many questions on that rent increase, which I won't bombard you with, but that is really really crazy.
Speaker 1:I know that I knew that that had come in.
Speaker 1:I didn't know all the extra little details, but I know that I knew that that had come in. I didn't know all the extra little details, but I know that, for me, always trying to think one step ahead and this is sort of what I would encourage a lot of other property managers to do is be aware that there is that type of law and if that was to come into your state, how would you be able to handle it? So for us, we've got a system in our office which actually does record last rent increases so that if, hypothetically, it comes in, I feel like we would already have the system in place. And I think that's what we should be doing as property managers always pre-empting for these things, so that things don't come as a bit of a shock or a surprise to us to handle. So of the new legislation that's not out at the moment, is there anything there that sort of scares you a lot or that the industry is sort of you know, quite negative against? Is there anything that stands out?
Speaker 2:Well, there's a few things. They're going to put limits on the re-letting costs, but again, it's not very clear what they're going to do there. I'm all for some consistency, and actually having this in black and white is a great idea, but right now it's almost as if the tenants won't be liable for compensation for the loss of rent when they break their lease. They might only be paying re-letting costs. So that one is a watch this space. But also coming is the right for tenants to make structural changes. Again, that will be just. The devil might be in the detail of that one as to what's a reasonable change and what can the tenants do and what will they have to fix up at the end of the tenancy and if that's all agreed and that kind of sounds okay and reads well in the press. But when you actually think about, well, if a tenant wants to paint a wall purple because that will make it feel like I thought I had my phone off, um, hit the right button there, bronwyn, that we can. Um, now I've turn you off, sorry. The structural changes like. Like, if a tenant wants to paint a pool, a wall purple, because they're gonna feel more at home, and that doesn't sound like such a bad thing, does it? But yeah, then you think about the implications of having a purple wall. Now, painting a wall purple is not so easy to get back to being white, and so all of a sudden we've got this big expense because you've got to prepare that properly and probably paint the wall three times, three coats or something like that. So there goes the bond in that kind of scenario.
Speaker 2:There's also a suggestion that maybe if the tenants pay for something but the idea is that they leave it behind, well then they might be entitled to compensation for that item and it's like okay, so that comes into the owner losing control of their cash flow because they've agreed the tenants can have an air conditioner, but it has to stay there because you're cutting a hole in the wall and therefore you've actually got to compensate the tenants for something you never wanted in the first place.
Speaker 2:So I've no doubt we can work through all these things as they come along, but it still throws up so many scenarios of what what ifs that could be coming, with tenants being encouraged to make structural changes, and this is all about tenants being made to feel more at home and more settled in their, in their rental property, but just the little details that I'm waiting to see as to how we will practically be able to do this, and I think it's a little knee-jerk reaction. We've never had the scenario where we couldn't get a handrail put in for for a tenant that needed it, or a little safety ramp. So that element of the law is coming as well, that things can be done by tenants for safety reasons and security reasons. Well, that's fine. Everybody's always been able to work that out with agreement. But it's on the other side here where tenants can make structural yeah, it would.
Speaker 1:Um, it would probably be worth, if you ever get a moment, to have a look at how wa has brought in the they call it minor modifications and that's just come into play on the 29th of July and it's pretty clear and it lists out what is considered a minor modification, what items the tenant is able to do themselves, what items have to be done by a licensed contractor and then the tenant does have to make. You can put a condition in there that the tenant has to make good at the end, which is all fine. I think, definitely. I had the same thought as you. Like what if someone wants to paint the wall black or the ceiling black? I mean? Number one it's unlikely. I was actually just thinking there might be some tenant that wants to piss you off that probably just says they want to paint it black, but they don't really want to. That was my first concern that you might get someone like that. But at the end of the day, like and it has to be tested, I guess, but if someone, if a tenant, had said to me I want to paint my teenage son's room black, yes, you could put in a condition that it has to be done professionally.
Speaker 1:Number two actually don't quote me on that. That might be something you can do yourself, I can't remember but you put a condition in there to say that it has to be restored back at the end. But, like you said, the question is well, if we're only capped with that bond, that's annoying. So it's like it would be good if you were able to take an extra bond per minor modification just to allow for that. But you can't.
Speaker 1:I mean, it's not that we have got, you know, people flooding through with all these requests and I feel like, wa, our new changes were best practice anyway and we never had an issue with negotiating with tenants minor modifications anyway, like if a tenant said I want to put hanging points up, or even if someone had said I want to paint my daughter's room or do a feature wall, I mean that might be a really good compromise to say, listen, we're okay, you're doing that. The owner's okay, you're doing that, but have asked whether you consider doing just a feature wall, so that you know you've still got that feel. It's about being reasonable and it's sometimes it's a shame when they have to stick a law in for it when it's sort of just been best practice. But yeah, wa I think have done it really well.
Speaker 1:It's very, very clear with what needs to be licensed, what doesn't have to be, and specifically mentioning every single little thing. Yeah, so if you get a chance, have a look at that and see. But I don't think the general consensus in WA is that we haven't been that worried by it. No one's really been that concerned. So that's a piece of mind a little bit for you.
Speaker 2:It is no, that is really good, and ultimately, what's going to happen is experienced, quality property managers.
Speaker 2:We're going to rise to the top of the pond and this will be our moment to shine, because our investors are going to need us.
Speaker 2:And so I'm very much, very, very passionate about quality property management and that, the industry, we can lift our game together and support each other, because we've had the same skills issues here in Queensland as I know other states have had that the property management workforce right now is fairly young and new and inexperienced, and so those of us that have been at this and have had law changes in the past and survived and thrived, it's us, up to us, I think, to show, to show the way and to show our investors that we're here, there's's somebody in Queensland on their side, and that we start promoting quality property management and getting paid what quality property management looks for. So I see the laws as I can't do anything about them. I didn't write them, but here's our chance to really shine, and our investors who stay in the market will do well, because lots of investors are fleeing the market after these laws and the ones that stay well, supply and demand means that they will do well with rental returns.
Speaker 1:Yeah, I was going to ask whether there was landlords that are really worried by it. Is it the more interstate or the local landlords that have sort of been a bit more freaked out by the legislation?
Speaker 2:It's actually been more local landlords that have wanted to hit the sales department phone number and move on. But then we've also noticed that there's new landlords coming into our market after and I assume this is everywhere. For a while there with the owner occupiers were the most dominant buyers in the market and so we were losing rental properties to owner occupiers, but it wasn't changing the demand because it wasn't our local tenants buying them in order to free up another rental property. So we still have an incredibly tight market, so the rental returns will stay. We have lost the crazy frenzy nature of the market. It is settling somewhat. We're not getting 50 applications every property. We're not getting 50 people at inspections anymore, but that's okay because we only need one quality tenant per property.
Speaker 1:so, um, yeah, we've noticed a change, but happily to see the investors uh, investors back yeah, that's good, and I guess we'll finish off by just stressing the importance of making your investors because there are so many investors that are buying interstate and have properties in multiple states as well Really making sure that we are all stepping up to the plate with confidence with our local state and making sure that we are educating these clients, because the last thing we want is for them just to assume that the way, for example, bronwyn does it is correct and not understanding what WA does for their property. It can develop a little bit of mistrust. It can be quite confusing for the landlord. So I think, just be mindful of the investor and how they're experiencing things on their end, because it would be really really difficult to try and navigate their properties with such different laws. So I know that for me, I do my monthly landlord training with them so that they understand how WA works and processes work and you know, making sure that you're doing that for whichever state you're in as well. But you're right, bronwyn, it's all about sort of that confidence and our value is definitely going to increase even more. We're going to be needed even more for these investors. So it's so important to have that mindset moving forward.
Speaker 1:Well, I'm sorry you have to, but I'm still thrown by that rent increase with the property. I'm sorry you have to deal with that. That's really shitty and I hope we never have to. But I'm still thrown by that rent increase with the property. I'm sorry you have to deal with that. That's really shitty and I hope we never have to, over in WA have to deal with that because it sounds like the short term probably is going to be okay, but I don't know if it's long term the right thing to do to encourage investors anyway. But time will tell. You may set the precedence for the rest of Australia whether it works or doesn't work. So it's yeah, it's good to get your feedback on it.
Speaker 2:Oh, you're welcome. It's been great chatting with you.
Speaker 1:I'll speak to you soon. Thanks, Ashley.