What property investors really think about owning in QLD

Queensland investors have unleashed on the State Government in a recent survey that revealed more than 80 per cent were considering bailing on the Sunshine State. SEE WHAT THEY SAID!

Queensland property investors have unleashed on the State Government in a recent survey that revealed more than 80 per cent are considering bailing on the Sunshine State.

The Real Estate Institute of Queensland recently published the results of its survey of more than 3300 Queensland property investors, with 81.4 per cent of respondents saying that recent and proposed tenancy law changes had influenced the likelihood that they would sell up.

INVESTOR SALE: 97 Hinkler Drive, Highland Park

Now The Courier-Mail can reveal exactly what some of those investors said in response to questions contained in the survey, and it is not a glowing report card for the Queensland Government.

When asked for their primary reason for considering selling, many pointed to ongoing rental reforms, bad tenants, increasing holding costs and the stigma that all landlords were “greedy, wealthy people” among some of their key gripes.

“The rules keep changing and the government is now trying to tell me what I can and can’t do with my asset,” one said.

INVESTOR SALE: 47 Delilah Lane, Nirimba

One landlord wrote: “Government at all levels driving up costs, sleight of hand legislative changes such as the recent move to allow rent increases only once every 12 months. QCAT failing to apply the legislation have made it a very risky and onerous investment class. Plus the constant demonisation of landlords, failing to appreciate the risk they take and that they supply the housing government has single-handedly failed to invest in.”

INVESTOR SALE: 304/20 Labrador Street, Labrador

Rising interest rates and maintenance costs, falling yields and a cap on rent rises have also made holding on to an investment property untenable for some, according to the survey responses.

“We have not increased rents on our properties to keep up with all the increases in interest, maintenance etc, as we are trying to keep current, settled tenants, but these changes are making our finances dwindle to such an extent that we are considering selling our properties,” one investor said.

It comes as property managers warn that the number of investors seeking appraisals is “through the roof” as stage two of the state’s latest rental reforms are being considered.

INVESTOR SALE: 74/88 Cecily Street, Kallangur

Those proposed reforms include making it easier for tenants to install the safety, security and accessibility modifications they need, helping parties negotiate about making minor personalisation changes to rental properties, finding a balance between tenants’ rights to privacy and owners’ need for information, ensuring rental bond settings provide appropriate security and parties are transparent and accountable for their bond claims and ensuring that

rent payment, utility and re-letting fees and charges are fair and reasonable.

The reforms are supported by Tenants Queensland.

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INVESTOR SALE: 34 Isabella Avenue, Nambour

But on the topic of modifications, landlords expressed concerns around tenant-caused damages and liability.

“How can a lay person be allowed to alter a property without consent of the person that owns it?”, one investor said. “Why should anyone be able to do what they want to our hard earned assets?”

Another said they were already considering selling their four investment properties.

“We have done the right thing with our tenants for over 10 years (and) I am not prepared to take on all of the risk and debt associated with owning investment properties,” they wrote.

Another investor said they had already made the decision not to renew their current leases and would sell them as a vacant possession.

INVESTOR SALE: 6/67 Nerang Street, Nerang

Ray White AKG CEO Avi Khan, who has over 2000 rental properties on his books, said the number of investors seeking appraisals was “through the roof”, adding that the vast majority were interstate investors who perceived that the government was taking away control of their assets.

“And if that continues, it will only make the rental crisis worse,” Mr Khan warned.

The latest PropTrack Rental Vacancy report said that while vacancy rates remained steady in May, the rental vacancy rate remained half the level seen before the pandemic.

Rental vacancies ticked up 0.08 per cent in Brisbane during the last quarter, but declined 0.05 per cent in the combined regions.

INVESTOR SALE: 5 Rell Court, Darling Heights

REIQ CEO Antonia Mercorella said they had shared “overwhelming reports” of private owners selling up or considering getting out of the Queensland market.

“We have maintained that a prominent factor in an owner’s decision to withdraw property from the permanent rental market over the last three years has been tenancy law reforms and the perceived lack of control over their assets,” she said.

“The proposed stage two rental reforms are the fourth rental law related reform in as many years.

“The survey had 15 questions with the ability to provide short written responses, and attracted 3755 respondents and more than 18,000 written comments.”

Antonia Mercorella from REIQ during a housing shortage round table discussion at Queensland Parliament in Brisbane. Picture: NCA NewsWire / Glenn Campbell

Ms Mercorella said the proposed modification reform was “strongly opposed” by investors, and that the survey showed that many property investors were struggling to keep up with escalating costs of property ownership.

“There’s an unfortunate rhetoric that because rents are going up, investors must be having a field day and exploiting the market, but the reality is that property ownership costs are growing at a much faster pace than rents,” she said.

“This is especially true for the average mum and dad investor who provide the majority of rental properties in Queensland, and are feeling the everyday cost of living pressures just as acutely as the rest of us.”

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WHAT INVESTORS SAID, WORD-FOR-WORD:

Primary reason for considering selling:

Increase in costs and tenants not looking after the property. High repairs and maintenance costs for damage after tenant has moved and not paid for including loss of rent for unpaid rent and time the property is off the market while repairs are taking place. Loss of rent means property owners have to cover the loan repayments, rates, insurance etc when there is not income. For working mum and dad investors this add a lot of financial strain to families trying to keep their family afloat.

Constant interference from QLD government with the rental market turned low risk low return investing into a disruptive and unpredictable game that I cannot call inviting anymore.

My primary reasons are the Rental law Reforms and increases to overall holding costs including rate increases.

Rental law reforms that limit my rights as the owner. Increase in costs e.g. insurance, rates, maintenance materials, installation of new smoke alarm requirements, payment of yearly checks etc. Low rental yields impacting return on investment.

Mostly that the hassle is not worth it. The rules keep changing and the government is now trying to tell me what I can and can’t do with my asset.

All of the above. Government at all levels driving up costs, sleight of hand legislative changes such as the recent move to allow rent increases only once every 12 months. QCAT failing to apply the legislation have made it a very risky and onerous investment class. Plus the constant demonisation of Landlords, failing to appreciate the risk they take and that they supply the housing Government has single-handedly failed to invest in.

Everything above except strong seller’s market. Government’s are making it harder and harder to get a decent return on investment through tax increases and other changes. Their narrative that we are greedy, wealthy people is wrong and needs to change. We need a market where both investors and tenants benefit, not the us vs them narrative we have at the moment. Better returns can be had elsewhere now making us reconsider our strategy.

Stress from frequent threat of reforms and ever increasing costs of owning a rental property.

If rent cannot be increased in line with interest rates we will not be able to cover the shortfall and will have to sell.

The recent increases in interest rates, utilities and maintenance services have meant that I am considerably out of pocket. The decision to prevent rental increases to help offset these costs means I will be unable to continue holding the property and be forced to sell.

We have not increased rents on our properties to keep up with all the increases in interest, maintenance etc, as we are trying to keep current, settled tenants but these changes are making our finances dwindle to such an extent that we are considering selling our properties.

Interest rates have increased considerably and the return on rent is well below the interest. I am in the process of possibly selling a rental property as a result of not being able to finance the ever-increasing difference.

There is a movement to decrease landlord rights with no consideration of the increased costs in holding a property. There have been multiple expensive reforms in the last few years and it seems the government keep curtailing landlord rights. At the end of the day, if something happens to the property the landlord is responsible. The current government seems to keep forgetting that, and that there are significant costs when that happens.

Margins are being squeezed and our ability to adjust to compensate is being eroded. Motivation for landlords to sell out and invest in equities or other investments which are not under attack by the Qld state government. Likely returns on an ETF in the stock market will exceed the average revenue from rental income. We are looking at options now!

ON PROPOSED REFORMS AROUND MODIFICATIONS:

Absolutely not, it is my personal property that I have worked hard to afford, I wish to maintain control of my property and have control of who is my tenant and what is done to my property. If I lose the right to maintain and manage my property in a way that I see fit I may as well sell. Unfortunately government departments don’t seem to acknowledge an owners rights.

This is highly problematic. The house remains legally the property of the owner. The tenant does not have insurance to cover damages if they occur. It would also encourage some people to cover up damages if they caused such by making modifications. If they cause damage and can’t afford to fix it, it leaves the problem with the owner. If as an owner I wanted modifications in the property I would have done them myself. If the property doesn’t suit the tenant as it is, they shouldn’t rent it. If this law passes it will be one of the primary reasons I sell my property.

I think I’ll sell my rental property now as a landlord I’m losing all my rights.

I maintain my property fully to keep it in very good condition and use tradesmen who I know have good reputations. If that option is lost then it would be best to sell my property and invest elsewhere.

How can a lay person be allowed to alter a property without consent of the person that owns it. If you hire a car and bring it back with a bad paint job and wider tyres it would not be allowed. Why should anyone be able to do what they want to our hard earned assets. I will sell my rental properties if this continues. Where will the government be then with housing if lessors lose their rights to have their assets kept to a standard and ensure they are well cared for. No control for owners, no rentals for tenants.

I’ll be selling my property if this rubbish goes through. And we already have good relations with current tenants!

What if the modifications cause damage or make the property unsafe. What is the landlords ability to recover repair costs? Probably nothing. Is just a free for all tenants when they have no interest in the condition of the rental property. This is a strong motivation to sell and get out of the mad environment when we are constantly attacked.

Due to liability issues and the government interfering in the way I own my assets I would sell and invest elsewhere not in property.

It is my property. I should have the say on modifications. If this law came in there is a high likelihood that I would sell it.

I am already considering selling and further erosion of my rights will only make me head in that direction.

I would sell the property. If a renter can do this then I would sell. It is not their property to make modifications of any kind.

Yes, we would most likely sell the investment property because it would seem it’s becoming all too difficult.

I would think about selling and leaving QLD if I had to apply to QCAT to refuse a minor modification by a tenant.

If I could only refuse [a minor modification] via QCAT then I would sell my property.

It’s getting that bad now that I am already considering selling my rental property.

I feel my rights as a property owner are being stripped and I feel I’m better off leaving the property vacant or selling it unless I have the final say in protecting and preserving my own.

We currently own 4 investment properties and are at the point of selling them all. We have done the right thing with our tenants for over 10 years, I am not prepared to take on all of the risk and debt associated with owning investment properties with people that don’t own them being able to modify them without permission.

We would probably leave the property unrented or sell.

I should not have to apply to refuse a minor modification. I am thinking of selling my property based on these proposed changes.

With increasing overheads, it’s becoming less and less attractive to hold an investment property. If I have to go to QCAT for a minor modification, I will sell the property and leave the investment property market. It just isn’t worth it any more. There are better ways to invest.

If the laws are changed so much that property owners have insufficient rights I would sell up and find something else to invest in. It wouldn’t be worth the problems and hassles that could arise.

We have two rental properties and already feel that our rights as landlords have been reduced dramatically. If this legislation is passed we will certainly consider selling the properties which in my opinion will only make renting harder and more expensive for tenants competing for a reduced supply of properties.

The way the legislation changing I’ll be selling all of my rental properties as it keeps moving more and more in favour of the tenant, what about the landlord that has just had 11 interest rate rises in the past 12 months to bear.

I’d rather sell the rental property than lose control over it. It is just too valuable.

If these new ridiculous changes are approved to come in, we will definitely sell hopefully before the new changes take effect.

Decision already made not to renew leases while still having a choice. Will sell with vacant possession.

The more the government takes away the rights of the people who actually own the property and pay the mortgage, the less incentive there is to keep it especially with the risks associated with renting a property. What will be the point of owning it, if I have no control or say over it?

I would consider selling my rental properties if the rights of owners are continually eroded by the proposals indicated above. The lack of rental properties currently, I believe is partly the result of owners selling rental properties because their rights have been reduced significantly by the changes in legislation by the Queensland State Government.

Hell absolutely not [rent cover all of the expenses?]. And changing the law just makes it even harder for landlords to provide rental properties. We are seriously considering withdrawing our rental properties from the market if the risk and costs for landlords keep on going up and the law makers making naive decisions and making it extremely difficult for landlords. The reason there’s a low supply of rental properties is because you are making it difficult to make it worthwhile. The rent barely covers the interest from the hikes, we are absorbing all other costs, it’d be easier to sell the properties especially if more stupid laws are introduced.

Definitely not [rent cover all of the expenses?], the interest increase has made it impossible to try and keep the property, seriously considering selling now as we have to pay more in interest than owner-occupiers, more in rates, etc.

(Source: REIQ Investor Sentiment Survey, May 2023)

Originally published as What property investors really think about owning in QLD