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Real estate cybercrime - What you need to know (with Kitty Parker) · The Money Puzzle

0:10
Speaker 1: Hello, and welcome to The Australian's Money Puzzle podcast. I'm
0:13
Speaker 1: James Kirkby, Wealth Editor at the Australian. Welcome aboard everybody.
0:17
Speaker 1: You know, one of the problems of being an investor,
0:20
Speaker 1: a property investor, in a share markets investor doesn't really matter,
0:24
Speaker 1: is that we're so focused on the details sometimes we
0:28
Speaker 1: actually lose sight of not so much the big picture.
0:33
Speaker 2: Because we're probably across the big picture.
0:35
Speaker 1: We know where rates are, we know where settings are
0:37
Speaker 1: on the global economy. But some of the things that
0:39
Speaker 1: we've always assumed, like when you go and buy a property,
0:42
Speaker 1: or you rent a property, or you go to sell
0:44
Speaker 1: a property, you'll assume you assume that it's all fair
0:48
Speaker 1: and square, and you assume that there are certain rules
0:50
Speaker 1: that everybody follows. And that may not be the right
0:55
Speaker 1: thing anymore, because we have this sort of avalanche of
0:58
Speaker 1: scam and forgelan activity online which I know is taking
1:01
Speaker 1: a lot of time for readerstate agents now every day,
1:05
Speaker 1: and I want to talk about that a bit with
1:06
Speaker 1: our guest. Also, the assumption that we assume that everyone
1:09
Speaker 1: wants to buy a property. Everybody wants to buy a home,
1:11
Speaker 1: they want to own their home. We may not be
1:13
Speaker 1: right about that either. I want to look at these things.
1:16
Speaker 1: I want to take a quick look at some of
1:18
Speaker 1: the issues in the market and some great questions. My
1:21
Speaker 1: guest is Kitty Parker. She's from Kitty and Miles Buyers Agents.
1:27
Speaker 1: She's a regular on the show, first time this year.
1:30
Speaker 2: How are you kidding?
1:32
Speaker 3: I'm good, James, how are you?
1:34
Speaker 2: I'm good?
1:34
Speaker 1: Thank you very much. Nice to have you on. I
1:37
Speaker 1: know we're both struggling through fairly warm days in both
1:42
Speaker 1: Sydney and Melbourne today, so it's nice to be in
1:45
Speaker 1: the studio, in the calm, cool studio. No, I prefer
1:49
Speaker 1: to be right now, let's put it that way. Tell me,
1:52
Speaker 1: I've come across this mostly from people who are in
1:57
Speaker 1: the customers, if you like, our investors. But I did
2:00
Speaker 1: talk to your reader state agent recently and they were
2:02
Speaker 1: talking about how much time they were spending and worrying
2:07
Speaker 1: about the commonplace transactions that they were involved in because
2:12
Speaker 1: of online scams and fraud. Tell me what you're seeing
2:16
Speaker 1: in your world.
2:18
Speaker 3: Yeah, definitely, I am seeing sales agents being a lot
2:25
Speaker 3: more shrewd when it comes to sending out, say, their
2:29
Speaker 3: trust account details for buyers. In particular, to pay their deposit.
2:36
Speaker 3: So that's one thing I'm seeing via both email and
2:40
Speaker 3: text message. I've had some sales agents say that their
2:45
Speaker 3: messages have been intercepted. It's beyond my scope as to
2:49
Speaker 3: how the scammers do that, but they intercept an email
2:54
Speaker 3: or message and tweak bank details, so an unwitting third part.
3:00
Speaker 3: Typically a buyer paying a deposit thinks they're doing the
3:03
Speaker 3: right thing. They make their deposit payment, they share a
3:07
Speaker 3: transaction receipt. Everyone thinks it's fine, but lo and behold
3:11
Speaker 3: a few days later, when the funds are meant to
3:14
Speaker 3: show in the bank account, they don't show. So the
3:19
Speaker 3: scammers are getting a lot more technical. And it's predominantly
3:23
Speaker 3: cyber scams.
3:25
Speaker 1: Yes, yeah, and in all is it in all sorts
3:29
Speaker 1: of it's actually in sales because that's where they real
3:32
Speaker 1: money is at. Presume rentals to that extent would be
3:35
Speaker 1: just mediocre as far as the scam is concerned. But
3:37
Speaker 1: you got big licks of money going through in proper transactions,
3:42
Speaker 1: often from people who are not used to dealing with
3:44
Speaker 1: big licks of money. It's in some ways it's like
3:47
Speaker 1: a personally hunting ground, isn't it.
3:48
Speaker 3: It really is, because typically the buyer is sending a
3:52
Speaker 3: deposit to a new bank account, and they're sending a
3:56
Speaker 3: large deposit, so you know, this is a six figure
3:59
Speaker 3: deposit it and it's usually to someone that's not already
4:03
Speaker 3: in their address book, someone that they haven't sent money
4:06
Speaker 3: to before. So it's really ripe for these scammers to
4:10
Speaker 3: come in and intervene at that stage. Whereas a rent
4:15
Speaker 3: payment is usually a direct debit payment, so the agency
4:20
Speaker 3: controls the debt, Whereas this can be especially if you're
4:25
Speaker 3: doing a bank transfer. I should say it's less when
4:28
Speaker 3: it's involving a check or deft payment. But this is
4:32
Speaker 3: a traditional bank transfer paying for the deposit for a property.
4:38
Speaker 2: And that's the most common way.
4:40
Speaker 3: Yes, still it still is in Sydney. It is becoming
4:45
Speaker 3: a lot more common to use deft payment systems, which
4:49
Speaker 3: is like a BP system. The most common one is
4:52
Speaker 3: auction pay and it becomes it's safer, it's more encrypted,
4:58
Speaker 3: it's a safer method, but that's still regulated and only
5:03
Speaker 3: allowed to be used at auction when the buyer is
5:07
Speaker 3: there in person. So yeah, so behind the scenes, if
5:12
Speaker 3: you're if you've had a pre auction offer accepted and
5:16
Speaker 3: you're sitting in your office and wanting to make your
5:19
Speaker 3: bank transfer into the sales agency trust account. That's where
5:24
Speaker 3: the hackers come in. The scammers come in and they'll
5:28
Speaker 3: intercept text messages or more frequently emails. It's also happening
5:33
Speaker 3: with conveyancers. Conveyancers are seeing because at settlement, that same
5:39
Speaker 3: buyer will be transferring quite a large amount of money
5:42
Speaker 3: for settlement into a conveyances trust account. And that's another
5:46
Speaker 3: way the scam is a intervening.
5:50
Speaker 1: So if I'm buying a property or I'm involved in
5:52
Speaker 1: a property transaction, doesn't matter as an investor or a rockypier,
5:56
Speaker 1: and you're on my side as an advocate, and it's
5:58
Speaker 1: such a responsibility of but you're If I ask you
6:03
Speaker 1: what's the best way to a void being scammed in
6:08
Speaker 1: real the state, what would you say to me?
6:11
Speaker 3: I would say, any bank account details that you're provided
6:15
Speaker 3: via either text message or email, give the sender a
6:19
Speaker 3: quick call on the phone and reconfirm those digits. It's
6:24
Speaker 3: as simple as giving someone a quick call and saying, Okay,
6:27
Speaker 3: the BS and B I've got is one, two, three, four,
6:30
Speaker 3: five six and the account number and you just confirm
6:34
Speaker 3: that the number that you have received via email or
6:38
Speaker 3: text is in fact correct.
6:40
Speaker 1: Yeah, such a good idea, killy, because while you're in
6:43
Speaker 1: the middle of property transactions, you're so fed up with
6:46
Speaker 1: signing forms you think it will never end in the
6:49
Speaker 1: but in fact it's probably just two times the deposit
6:52
Speaker 1: and the rest of the money. There's two big moments
6:55
Speaker 1: that you're exposed, and it's not that hard to call
7:00
Speaker 1: someone and do that. Great advice, Thank you very much, Right, Okay,
7:03
Speaker 1: I think that you've come upon in that area that
7:07
Speaker 1: our listeners should be aware.
7:08
Speaker 3: Of, typically speaking as the real estate industry. As all
7:13
Speaker 3: industries become more digitally mastered, what tends to happen is
7:20
Speaker 3: the hackers come in. They'll try and intervene with emails
7:24
Speaker 3: in particular, So any email that you receive, whether it's
7:29
Speaker 3: your offer has been accepted, quickly transfer this amount of
7:33
Speaker 3: money to the following bank account before you miss out.
7:38
Speaker 3: Things like that. So these scammers are really becoming aware
7:42
Speaker 3: of how the real estate space is becoming more digital
7:46
Speaker 3: and relying on digital communications and transactions in particular, and
7:53
Speaker 3: so they're stepping up and and intervening there. And I
7:58
Speaker 3: think the industry is just a little bit as most
8:02
Speaker 3: industries are. They're often playing catch up in the cyberspace.
8:07
Speaker 3: It takes scams to happen a little bit before then
8:10
Speaker 3: they'll come in and they'll say close off that loophole.
8:15
Speaker 3: So unfortunately, we're seeing the scams occur first before we
8:20
Speaker 3: have anything really done, before.
8:23
Speaker 1: The regulators catch up. Yes, nature of the Beast, isn't it? Yes? Yeah? Okay,
8:28
Speaker 1: very interesting. That's really interesting and worth hearing, folks. It's
8:31
Speaker 1: something that kind of comes up on the show fairly regularly,
8:34
Speaker 1: but I happened to herd. It's sort of articulated in
8:37
Speaker 1: that fashion before just what's going on. But you can
8:39
Speaker 1: see in property investment and property transactions, as we said
8:45
Speaker 1: at the start, or all the large amounts of money
8:47
Speaker 1: being transferred between people who don't typically transfer large amounts
8:51
Speaker 1: of money to each other, the perfect area for scammers
8:55
Speaker 1: to move in. Okay, we'll take a short break and
8:57
Speaker 1: we'll be back in a moment with another issue that
9:00
Speaker 1: we want to bring.
9:01
Speaker 2: You up to speed with.
9:12
Speaker 1: Hello and welcome back to The Australian's Money Puzzle podcast.
9:15
Speaker 1: I'm James Kirby, well the edits. You're at The Australian
9:18
Speaker 1: talking to Kitty Parker, a Buyer's Advocate operating in Sydney
9:22
Speaker 1: but operating nationally for Kitty and Myers Buyer's Advocates, who
9:26
Speaker 1: has been on the show many times. Hey, Kitty, the
9:29
Speaker 1: other thing you were keen to bring up was that
9:31
Speaker 1: issue about whether gen Z even want to be homeowners.
9:35
Speaker 1: Do you have some compelling evidence that they don't, You know.
9:41
Speaker 3: James, it's funny that you mentioned this. I wrote a
9:44
Speaker 3: blog post recently on this topic, and I started this
9:48
Speaker 3: blog post with the assumption that gen Z no longer
9:53
Speaker 3: want to be homeowners. And I'd spoken to a few
9:55
Speaker 3: gen Z and they seemed very disillusioned with the a
10:00
Speaker 3: housing affordability, especially in the capital cities.
10:04
Speaker 1: Not so much that they believe they can't be Yeah, so.
10:08
Speaker 3: They're very much given up on even the idea. So
10:12
Speaker 3: I had mistakenly assumed this to be the case. But
10:16
Speaker 3: then when you do a deep dive into data and
10:18
Speaker 3: you look at ABS data and domain data, it actually
10:22
Speaker 3: shows that gen Z that a good two thirds actually
10:25
Speaker 3: do still want to own their own home. They're just
10:31
Speaker 3: not sure how they're going to go about it and
10:34
Speaker 3: whether they will be able to But the dream actually
10:38
Speaker 3: is still alive even in that generation. They do want
10:41
Speaker 3: the security of being a homeowner and not just a
10:46
Speaker 3: rent vestor. It's actually about having their own principal place
10:51
Speaker 3: of residence, being able to call their home their home.
10:55
Speaker 1: It's interesting, I did it. I did you call it
10:57
Speaker 1: a blog? I still like to call it an article
11:00
Speaker 1: for The Australian some time ago, but that had been
11:02
Speaker 1: some weeks ago. On the bank of mom and Dad,
11:04
Speaker 1: always an interesting issue, but there was actually some real
11:06
Speaker 1: data which had been put together, and the part that
11:10
Speaker 1: caught my eye was the report said that it is
11:13
Speaker 1: now common. This is a Richard shellback at UBS Investment Bank,
11:18
Speaker 1: so you know, pretty serious operator, pretty serious bank. Global
11:21
Speaker 1: Investment Bank did a survey and they found out that
11:25
Speaker 1: two hundred thousand dollars was a regular payment from parents
11:32
Speaker 1: to their children as opposed to their child right so
11:37
Speaker 1: to their offspring in terms of getting into the property market.
11:42
Speaker 1: And it was the first of hard numbers i'd seen hon
11:45
Speaker 1: it ever, and it just so happens that's a twenty
11:51
Speaker 1: percent deposit anyway on many properties in both of the
11:54
Speaker 1: larger cities and the other cities increasingly. But that figured
11:58
Speaker 1: trouble you would you say that figure is reliable figure.
12:01
Speaker 1: Does it sound too high?
12:02
Speaker 2: Too low?
12:03
Speaker 3: Is that that's really interesting that you say that. I
12:06
Speaker 3: a sort of blog will say article, I just finished
12:10
Speaker 3: an article a couple of days ago that I'm about
12:12
Speaker 3: to publish where I dug into the mortgage space their
12:18
Speaker 3: data and found that sixty percent nationwide in Australia, sixty
12:24
Speaker 3: percent of first home buyers last year utilized the bank
12:29
Speaker 3: of mom and Dad sixty percent.
12:31
Speaker 1: This is the majority, Yeah, the majority.
12:34
Speaker 3: Yeah, So that certainly goes hand in hand with the
12:38
Speaker 3: data that you have. It's a substantial amount of first
12:41
Speaker 3: home buyers are really needing to leverage the assistance of
12:48
Speaker 3: their parents to eat, to get a foot in the door.
12:51
Speaker 2: Yeah.
12:51
Speaker 1: One of the interesting things that that work was that
12:53
Speaker 1: when they did this survey, they asked several thousand parents
12:57
Speaker 1: and whatever you wanted, however you want to call it,
13:00
Speaker 1: children of parents, adult children of parents, how much did
13:05
Speaker 1: they get from the Bank of moment, Dad and the
13:07
Speaker 1: UBS servey. One of the interesting insights, accidentally insights from
13:11
Speaker 1: it was that the parents get a bigger figure than
13:15
Speaker 1: the adult children gain. Wow, so in general the figure
13:20
Speaker 1: was higher. They asked the parents, how much did you
13:22
Speaker 1: give Jack or Jill the figure was higher, but if
13:25
Speaker 1: they asked Jack or Jill, the figure was lowered. What
13:27
Speaker 1: does it tell you was I think it tells me
13:29
Speaker 1: that they are they'll take.
13:31
Speaker 2: The money, but they're uncomfortable.
13:33
Speaker 3: Yeah. I can imagine that, especially, you know the stereotype
13:38
Speaker 3: with gen Z. You know when you hear from gen
13:42
Speaker 3: x's and boomers, gen Z they're lazy. You know, they're bloodging,
13:46
Speaker 3: they're entitled, et cetera. I can imagine, you know, your
13:50
Speaker 3: pride is hit if you're if you're working twenty something,
13:55
Speaker 3: especially early thirty something, I can imagine it's really hard
14:00
Speaker 3: concept of of going to your parents and even asking
14:04
Speaker 3: for help, let alone accepting the help from your parents
14:08
Speaker 3: as a grown adult.
14:11
Speaker 2: Yeah.
14:12
Speaker 1: Yeah, I did an exercise in the course of that,
14:14
Speaker 1: and I looked at the first house I bought, which
14:17
Speaker 1: is still there, more or less unchanged, but it looks
14:20
Speaker 1: at things from the outside, and I just made the point.
14:24
Speaker 1: I did the numbers on the averages in the city
14:26
Speaker 1: and the salary at the time, and then the average
14:28
Speaker 1: salaries now, and I mete out there. At the time,
14:29
Speaker 1: I was on a salary of fifty thousand a year,
14:32
Speaker 1: and I bought this house and today, if either of
14:36
Speaker 1: my children wanted to buy that house, they would have
14:39
Speaker 1: to be on a salary of three hundred and seventy
14:40
Speaker 1: one thousand, And I was for ever thirty and there's
14:47
Speaker 1: very few thirty year orows on three hundred and seventy
14:49
Speaker 1: one thousand. I mean the average is one hundred. It's
14:52
Speaker 1: three point seven times the average. So you can see
14:54
Speaker 1: any way, they shouldn't be embarrassed. Why should they be embarrassed.
14:58
Speaker 1: The numbers are gone crazy and they're fortunate. The other
15:02
Speaker 1: thing I wonder, I bet you never come across this
15:04
Speaker 1: all the advisors and the lawyers say, oh, you should
15:07
Speaker 1: have a loan agreement, you know, with your children, and
15:10
Speaker 1: there should be stage payments and.
15:12
Speaker 2: All this stuff.
15:13
Speaker 1: I bet no one does that. I would say, no one.
15:15
Speaker 1: I bet it's very rare.
15:17
Speaker 3: I've seen that. Yes, I've seen parents while they're dealing
15:22
Speaker 3: with their convincing solicitor as part of making the purchase
15:27
Speaker 3: kind of together with their offscring, setting up on the
15:31
Speaker 3: side that legal agreement regarding the loan and the repayments, etc.
15:37
Speaker 3: It's just a lot more lax than you know, obviously
15:41
Speaker 3: within an official lender. So the repayments are far less.
15:46
Speaker 3: Usually there's no interest, or if there's interest, it's just indexation.
15:51
Speaker 3: You know, at the moment in indexation, you know, and
15:55
Speaker 3: interests is you know, only a little bit cheaper than interest.
15:58
Speaker 3: But usually it's it's very basic. But I have seen
16:03
Speaker 3: those documents drawn up.
16:05
Speaker 1: I wonder how often if I wonder, even if you
16:08
Speaker 1: did it, I sounded terribly facialistic here. I wonder, even
16:12
Speaker 1: if you did it, like, how many people would actually
16:15
Speaker 1: follow through? H see, so you have all their writing,
16:17
Speaker 1: but how many people would actually follow through and say, Okay,
16:20
Speaker 1: you're in breach of the agreement.
16:21
Speaker 3: Yeah, you basically have to take your child. You'd have
16:25
Speaker 3: to go legal. You'd have to get legal advice and
16:26
Speaker 3: take your child to court. And I don't think if
16:29
Speaker 3: a parent is willing to loan their offspring the funds
16:33
Speaker 3: for a property, I highly doubt that same parent would
16:37
Speaker 3: troll their child through court.
16:38
Speaker 2: It's I think you're the quote.
16:42
Speaker 1: I didn't guess you are the quote. I didn't get it.
16:44
Speaker 1: That piece very good. Yes, yes, I can see exactly
16:47
Speaker 1: where you comes from. And I think it's the case.
16:50
Speaker 1: Mind you listeners, if there's anyone out there who says no,
16:54
Speaker 1: that's not the case at all. You guys are too soft.
16:56
Speaker 1: Knuckle down. Do some agreements. Look the agreement I had to,
17:00
Speaker 1: well it worked. If you have had such an experience,
17:01
Speaker 1: please let us know the Money Puzzle at the Australian
17:04
Speaker 1: dot com dot au. Okay, well take a short break.
17:07
Speaker 1: We have some very good questions and we'll be back
17:09
Speaker 1: with you in a moment. Hello and welcome back to
17:17
Speaker 1: The Australian's Money Puzzle podcast. I'm James Kirby talking to
17:21
Speaker 1: Kitty Parker. Now question here, Katy from Nathan. I'm considering
17:26
Speaker 1: moving abroad this year and if I do, I need
17:30
Speaker 1: to rent out my one bedroom apartment. I know everything
17:34
Speaker 1: you say on the podcast is general information, not advice.
17:37
Speaker 1: Thank you for reminding me of that, Nathan. Everything we
17:40
Speaker 1: say it's general information not advice. But are you or
17:43
Speaker 1: your guest able to speak about the pros and cons
17:45
Speaker 1: of paying a property management company to look after this
17:48
Speaker 1: as opposed to doing it yourself. I'm aware of the
17:51
Speaker 1: added cost of using a property manager and recall you
17:53
Speaker 1: saying from experience that the one you can be given
17:58
Speaker 1: can at times be very Okay, thank you, Nathan.
18:02
Speaker 2: With all sorts of property managers.
18:03
Speaker 1: I had to fire property managers here.
18:06
Speaker 2: And there along the line.
18:07
Speaker 1: They're wildly different in their abilities. It's a tough job.
18:12
Speaker 1: Not everyone wants to do. Is there's an argument that
18:15
Speaker 1: they don't get very well rewarded for what is there really?
18:18
Speaker 1: You know, it's a tough gig property management, especially at
18:21
Speaker 1: that sort of where we say the lower end of
18:24
Speaker 1: the residential ladder in one bedroom apartment. That's you know,
18:27
Speaker 1: that's the typical tot of thing that probably not many
18:29
Speaker 1: people want to manage, Nathan, compared to shall we say
18:32
Speaker 1: a fourteen million dollar you know, a luxury property on
18:35
Speaker 1: Sydney Harbor.
18:36
Speaker 2: So kitty.
18:37
Speaker 1: First of all, on property management, very roughly, what would
18:40
Speaker 1: the people expect to pay? It used to be something
18:42
Speaker 1: like seven to nine percent of the income. Is that
18:45
Speaker 1: more or less there?
18:46
Speaker 3: It depends on the shape. Different states have different norms.
18:51
Speaker 3: So if you're in let's say you're in Sydney, you
18:55
Speaker 3: may get you may be able to negotiate around five
18:59
Speaker 3: percent five point five percent including GST. If you have
19:03
Speaker 3: more than one property, it might be even less than that.
19:07
Speaker 3: And then you go to areas such as say the Act.
19:12
Speaker 3: So in Canberra it can be eleven percent, fourteen percent,
19:16
Speaker 3: South Australia eight percent, eight point eight percent, and Queensland
19:21
Speaker 3: tends to be if you do if you get a
19:23
Speaker 3: good negotiated deal, seven percent, So it does. It varies
19:28
Speaker 3: widely the management fee, but you can also negotiate not
19:34
Speaker 3: just the management fee, but all the say, the monthly
19:38
Speaker 3: incidental fees, things like an an monthly administration fee or
19:43
Speaker 3: an end of year report fee, or all the generic
19:48
Speaker 3: fees that they'll often tack into a managing agency agreement.
19:53
Speaker 3: It's really handy to negotiate those because every bit that
19:58
Speaker 3: you can reduce remove completely, that's saving you over the
20:04
Speaker 3: life of your property investment.
20:07
Speaker 1: Okay, why on earth would Cameron be twice a year
20:10
Speaker 1: as Melbourne, the same people on the around in the
20:12
Speaker 1: same sort of city, with the same sort of numbers.
20:15
Speaker 2: What said about it?
20:16
Speaker 3: I'm actually not sure. And quite ironically, the rental yield
20:20
Speaker 3: in Canberra tends to be quite good. So not only
20:25
Speaker 3: they making more money purely because the weekly rental is higher,
20:30
Speaker 3: but they're taking a higher percentage.
20:31
Speaker 1: So maybe it just competitive up there for a long time.
20:36
Speaker 1: Possibly competitive these days, that's for sure, the prices they
20:40
Speaker 1: have there now. But specifically to Nathan's question about are
20:44
Speaker 1: they worth it? Nathan, I couldn't see how else you
20:46
Speaker 1: could do it. To be honest, this isn't against no advice.
20:49
Speaker 1: Didn't mean this to be individual. All the Nathan's in
20:51
Speaker 1: the world, flying overseas to all the countries in the world,
20:54
Speaker 1: I would say, how on earth could you do it
20:56
Speaker 1: with that one? Unless you've got some awfully good could
21:01
Speaker 1: probably want to be paid anyways.
21:03
Speaker 3: I would say the same thing James, that when the
21:06
Speaker 3: going is good and your tenant is there and they're
21:09
Speaker 3: paying rent, I absolutely understand considering why would you pay
21:15
Speaker 3: an agent to manage it, But really you pay an
21:18
Speaker 3: agent to manage for when stuff goes hairy. So it's
21:23
Speaker 3: when the rent is in arrears, when you need to
21:25
Speaker 3: evictim or when a tenant decides they're leaving and you
21:30
Speaker 3: need to release a property and have open inspections and
21:34
Speaker 3: things like that. So if you have a long term
21:37
Speaker 3: tenant in place, that's fine, as I say, but it's
21:41
Speaker 3: when things go a bit hairy or there's a change
21:44
Speaker 3: in circumstances. That's when if you're located overseas, you'd be
21:49
Speaker 3: really grateful to have a professional on the ground to
21:53
Speaker 3: be able to undertake all the necessary dirty work for you,
21:58
Speaker 3: so to speak.
22:00
Speaker 1: Yeah, but even not necessarily even dramatic, but just the
22:03
Speaker 1: sheer routine nature of so many things. If you're overseas
22:09
Speaker 1: and time difference and everything else, I.
22:10
Speaker 2: Think will be very difficult.
22:12
Speaker 1: I think it will be very difficult to try and
22:15
Speaker 1: run things from another country. And in my experience, there's
22:21
Speaker 1: something you can't really put money on. But I have
22:24
Speaker 1: come across people who had investment properties and they were
22:28
Speaker 1: perfectly good investment properties, and they basically they gave it up.
22:32
Speaker 1: They packed it in and you say to them what happened,
22:36
Speaker 1: and they said it was too much work, just too
22:38
Speaker 1: much trouble, all that hassle.
22:40
Speaker 2: Well that's the.
22:41
Speaker 1: Idea of the outsourced property agent, that they are in
22:45
Speaker 1: charge of the hassle. By the way, One thing, listener
22:47
Speaker 1: is if you've never done it, it's not as simple
22:50
Speaker 1: as it's not as simple as you pay them and
22:52
Speaker 1: they never call you. Unfortunately they want you to make decisions,
22:57
Speaker 1: but at least it all comes through the one call,
22:59
Speaker 1: so you don't have different people calling you. And some
23:02
Speaker 1: people have a practical thing where they just say to
23:04
Speaker 1: the property agent look, any item under X pick a number,
23:08
Speaker 1: two hundred dollars, one thousand dollars, doesn't matter.
23:11
Speaker 2: Don't bother calling me.
23:12
Speaker 1: So if someone says, oh, you know, the tap fell
23:14
Speaker 1: off the sink or something, we have to put it
23:16
Speaker 1: back on. It's going to cost two hundred dollars, you
23:18
Speaker 1: need to call me. Some people have arrangements like that,
23:20
Speaker 1: and they're probably very practical a lot of the time,
23:24
Speaker 1: unless you're really tight and you need to watch every penny. Okay, now,
23:28
Speaker 1: the final question talking about you mentioned you.
23:31
Speaker 2: See different states with different norms.
23:34
Speaker 1: Here's a we'll call it a question, though it is
23:39
Speaker 1: something of a complaint as well. Hey, folks, the prize
23:42
Speaker 1: regular listeners will not be surprised to know that this
23:45
Speaker 1: is to do with Victoria. Here we go, real question
23:48
Speaker 1: from Jane. All questions you read, obviously, but this is
23:51
Speaker 1: so hard evidence from the ground about what it's like
23:53
Speaker 1: to invest at the moment in Victoria, and one of
23:56
Speaker 1: the reasons perhaps that it's the state with the worst figures.
24:00
Speaker 1: My brother owns a two bedroom house in Inner Melbourne,
24:04
Speaker 1: which was originally his home, has been rented out for
24:07
Speaker 1: a few years due to Victorian landlord rules. He recently
24:12
Speaker 1: had to pay two hundred and seventy dollars for a
24:14
Speaker 1: minimum standards ordit of the property. The report deemed his
24:18
Speaker 1: property to be non compliance based on the following issues
24:21
Speaker 1: see attached photos. This is a very thorough letter, folks
24:24
Speaker 1: from Jane.
24:25
Speaker 2: Bathroom, bedroom, deck, arranda.
24:28
Speaker 1: Various problems, mold in, silicone and grouse. You see that
24:32
Speaker 1: this is what we call getting down to brass tacks
24:35
Speaker 1: here in the money puzzle. So Jane says, he is
24:38
Speaker 1: being required to immediately rember these issues in order to comply.
24:43
Speaker 1: I consider these to be minor home maintenance issues which
24:46
Speaker 1: could be fixed with a lick of paint. She says.
24:51
Speaker 1: I appreciate these rules are intended to ensure quality rental housing,
24:56
Speaker 1: but none of the issues were ever raised by tenants.
25:00
Speaker 1: My brother is now considering selling the property as he
25:02
Speaker 1: could make better use of the money elsewhere. Perhaps disincentivizing
25:08
Speaker 1: investment properties is the outcome the Victorian government seeking what
25:11
Speaker 1: are your thoughts on these rental rules? Yes, and she
25:16
Speaker 1: makes the point that my brother might have shocked around
25:19
Speaker 1: for a more lax assessor. Yeah, okay, Well, I don't
25:23
Speaker 1: want to get into the particular details of that case
25:26
Speaker 1: or any case, but it would seem to be indisputable
25:30
Speaker 1: now that Victoria is the weakest property market in the country.
25:35
Speaker 1: It has the worst price performance, it has the worst defaults,
25:40
Speaker 1: it has the lowest investor activity, and it does coincide
25:45
Speaker 1: with a lot of taxes. There is now ten state taxes,
25:50
Speaker 1: two new ones come in on January the first, and
25:52
Speaker 1: a lot of regulation. And it would seem that a
25:56
Speaker 1: real problem around the country is this lack of standardization.
26:00
Speaker 1: I mean, Kitty just talked about that you can pay
26:02
Speaker 1: twice as much for a property manager in Canberra as Sydney. Similarly,
26:06
Speaker 1: you could hit a whole pilot rules in Victoria that
26:08
Speaker 1: you don't get hit within other states and people. I think, Kitty,
26:12
Speaker 1: why wouldn't you arvertisee that that's the most natural thing
26:15
Speaker 1: in the world, you would think for investors to do.
26:18
Speaker 3: That makes sense. If you're looking to purchase an investment
26:22
Speaker 3: property or hold an investment property, wouldn't you look for
26:26
Speaker 3: the state or the area where you're not only looking
26:29
Speaker 3: for growth and all those figures, but you want ease
26:32
Speaker 3: of holding and you want to minimize your you want
26:36
Speaker 3: to maximize your tax deductions and minimize your tax liabilities.
26:42
Speaker 3: But I also I also understand flipping the coin. I
26:46
Speaker 3: understand that, as you mentioned, the lack of regulation, the
26:51
Speaker 3: standardized regulation in the country. Once you have the housing
26:56
Speaker 3: prices move where they've moved and we have a very
27:00
Speaker 3: tight rental market. I think it's highlighted the difficulties also
27:05
Speaker 3: for tenants. That tenants always had little quips here and there,
27:11
Speaker 3: but you definitely hear more so in the last few
27:13
Speaker 3: years that I feel there are times tenants are taken
27:17
Speaker 3: advantage of, and so I think in the nicest way,
27:22
Speaker 3: some regulation does enable a bit of a fairer playing field.
27:28
Speaker 3: But I absolutely agree that having something standardized nationwide would
27:33
Speaker 3: make a lot more sense than having it divided between states.
27:39
Speaker 1: It really would, Yeah, it really would. I mean, if
27:40
Speaker 1: you think about something like superannuation, it's so difficult anyway.
27:43
Speaker 1: Can you imagine if it was states, if every state
27:46
Speaker 1: had different rules and regulations. And that's what's going on now,
27:49
Speaker 1: and investors are shopping between the states, and they are
27:53
Speaker 1: voting with their wallets basically, and that they are exiting
27:56
Speaker 1: Victoria and they really have been in the last year
27:59
Speaker 1: or two when we been covering that. And this is
28:01
Speaker 1: just another example of it I expect from Jane there,
28:04
Speaker 1: because the key line there obviously is she says that
28:07
Speaker 1: her brother is now thinking of selling the property. You
28:09
Speaker 1: set the property into a market, that speaker, you wouldn't
28:11
Speaker 1: choose to sell a property just now in the state
28:13
Speaker 1: that has falling prices because you know, they have the
28:16
Speaker 1: whole sort of a spiral that can occur there if
28:18
Speaker 1: we don't have sort of sensible, standardized approach to property investing,
28:24
Speaker 1: which is I.
28:24
Speaker 2: Think fair to all sides.
28:26
Speaker 1: Okay, well, that would seem to be it for today.
28:29
Speaker 1: Kitty Parker, thank you very much for coming on the show.
28:32
Speaker 1: Great to talk to you again, first time this year.
28:34
Speaker 1: We'll have you again hopefully.
28:36
Speaker 2: Through the year.
28:37
Speaker 3: Thanks for having me.
28:38
Speaker 1: James, lovely to have you as always. That was Kitty Parker,
28:41
Speaker 1: folks Buyer's advocate in Sydney, but operation operating nationwide. Let's
28:48
Speaker 1: have sport emails and by the way, correspondence like that
28:52
Speaker 1: from Jane that really good gives us an insight into
28:54
Speaker 1: what's going on.
28:55
Speaker 2: They don't have to.
28:56
Speaker 1: Be questions, obviously, questions are the main thing, but observations, comments,
29:00
Speaker 1: et cetera are genuinely welcome.
29:02
Speaker 2: So let's have them.
29:03
Speaker 1: The email is the money puzzle Atiaustralian dot com dot Au.
29:08
Speaker 1: Today's show was produced, as always very well, by Leah
29:13
Speaker 1: Samuel Glou Don't You Soon