Property Hub - Investment Insights & Inspiration - Get Invested: Part 2 - Jo Natoli on going from rags to riches to rags to riches

Episode Date: November 1, 2024

What will make or break your success in property? Jo Natoli is back to discuss.  Jo has been in a property game for a long time, and has many insights to share in this episode. As we told you last week, Jo is a property investor and has had her sleeves rolled up in the trenches of elite property management for over three decades, as the Founder of The Rental Specialists in NSW. She is also a current Real Estate Institute of NSW Board Member. Not only can you learn from her story and experiences, Jo also shares some critical information the changing nature of property and the evolving role of property managers and the rental reform legislative changes that are set to have a big impact on investors. Tune in! Connect with Jo Natoli therentalspecialists.com.au Subscribe to Property Hub for free now on your favourite podcast player. Take the next step - connect, engage and get more insights with the Property Hub community at linktr.ee/propertyhubau Book a personal solutions session with Bushy to go deeper on your specific property needs or challenges Continue the discussion with likeminded investors and experts on The Property Hub Collective Facebook group Get a copy of Bushy's book, Get Invested, for FREE, and find out what it takes for you to invest in living more, working less Get all Property Hub info here linktr.ee/propertyhubau About Get Invested, a Property Hub show Get Invested is the leading weekly podcast for Australians who want to learn how to unlock their full ‘self, health and wealth’ potential. Hosted by Bushy Martin, an award winning property investor, founder, author and media commentator who is recognised as one of Australia’s most trusted experts in property, investment and lifestyle, Get Invested reveals the secrets of the high performers who invest for success in every aspect of their lives and the world around them. Get Invested is part of the Property Hub podcast channel, your home for property investment insights, inspiration and stories from Australia’s top property experts, investors, leaders and analysts. Subscribe now on Apple Podcasts, Spotify and YouTube to get every Get Invested episode each week for free, and also get full access to RealtyTalk, Australia’s top online property show for red hot property investing news and insights direct from property industry leaders and influencers. Property Hub is a collaboration between Bushy Martin from KnowHow Property, Kevin Turner from Realty, show producer Andrew Montesi from Apiro Marketing and Apiro Media, and Australia’s largest independent podcast networkDM Media.  For business enquiries, email [e-mail] omnystudio.com/listener for privacy information.

Investors are having their rights impinged upon. I can't sugarcoat it. Their rights in some respects are being taken away completely. We are having a lot taken away from us as investors in residential real estate. So currently as investors, we enjoy certain, you know, if we have a tenant that we need uh to move on we have the ability to do that um that will be taken away from us completely um we currently have the ability to um approve or not approve uh pets or um stipulate the type of pets that we will approve that will be taken away from us completely um we will have the ability to terminate tenancies but only in certain circumstances um we we will even lose the ability i hate to sound so pessimistic but we even will lose the ability

to end a tenancy agreement on the basis that the fixed term is expiring so a contract is no longer a contract that we can rely upon and we will end up in a situation where we have potential life tendencies. So what's that going to mean? It's going to mean for an investor that you need to be really careful who you choose as your property manager because you want your property manager to have complete robust processes and mindset. Welcome to Get Invested on the Property Hub podcast channel, the leading weekly show for Australians who want to learn how to unlock their full self, health and wealth potential. I'm your host, Bushy Martin, and each week I go deep with the best investors, experts, leaders and founders to find out what it takes to break

free from the grind, discover freedom and to live by design. Subscribe now and join me and get invested in the life that you really want. Let's get started. Hi Friday Fighters. What do the continuous waves of new legislation, restrictions, compliance and increased taxes and charges mean to you, your investment properties and your future? Because it seems that the much media malign housing and rental crisis across the country is in the midst of what a bit of a perfect storm with high migration levels adding to rental pressures, increasing severity and frequency of extreme weather events forcing many out of their homes along with skyrocketing insurance costs, new property construction falling to record lows and housing costs and flow on rents continuing at record levels.

All this at a time when naive politicians continue to come up with a deluge of harebrained headlines and reactive half-baked schemes that will only actually make matters worse and governments around the country are introducing ever more restrictive waves of residential tenants reforms and limitations and have the growing potential to further drive investors and rental stock out of the market

and in the midst of all this unprecedented dynamic change and public focus, the people who find themselves at the centre and the crossroads of all this, who become the meat in the pressure cooker sandwich, are those that are stretched beyond their limits from all sides and I'm talking about professional

property managers who I believe are the most important professionals in your property team that you need to have working with you well before you even start looking at a property in an area and right through to the day you actually sell your property and beyond as they have the longest relationship with you your property and your area so the quality of your property management is likely to make or break your level of property success. Now give what I've just mentioned it's probably no surprise the recent statistics reveal that over a quarter of property managers are expected to abandon the industry within the next five years surpassing attrition rates across all other industry sectors in Australia at a time when their skills have never been more required or more

important to navigate the stormy property rental seas. So to dig into what all of this means to you and your property future. We're joined again for part two of our great conversation with Jo Natalie, a 30-year industry veteran and specialist property investment manager. And she actually set up the first dedicated property management business to rental specialists way back in the 90s. And she's also a current Real Estate Institute of New South Wales board member. So welcome back and let's get invested again, Jo. Thanks for having me. I'm excited to they're here. So we had a great conversation last time about your journey and I'll sort of kick things off with a long run through the nitty-gritties of everything that's encompassed

in property management. So I guess just to start off the conversation on this, what common mistakes do you see investors making when it comes to property management? Let's get right into it. The biggest mistake that property investors, well, they make two. The first is not getting a property manager on board as part of their team. I see a lot of property managers talking about putting together an investment team, but they never, ever include the property manager. So they really need to bring the property manager on before they're buying a property, not a day or two before settlement's due and then scramble.

So that's mistake number one. mistake number two is choosing property managers based on fees i see it i hear it time and time and time again and it really just drives me nuts um property management is not one of those things that you judge or make a selection on based on how much you can save in professional advice and fees uh that's not how you choose a really good property manager and so that would be the second mistake. Yeah, extremely well said. And on both of those, I know just to share the way we approach it and the way we suggest investors get involved. Once an investor decided on an area that they want to start looking at, the very first person we suggest they talk to is a local dedicated

property manager. Why? One, you're independent. They don't have an axe to grind. They're not trying to sell you something. Two, if they live and work in that area, they know the ins and outs of the good, bad and ugly in the locations. They can compare how a particular property compares both tenant-wise and ongoing to others in that location. They're able to walk through the property and give you an independent view on the ins and outs of that property itself. So I think they're invaluable right from the get-go, but they're also really useful ongoing because they can do full working order pre-settlement inspections to make sure that you're actually getting what you pay for. And that's all done before you've even got the

keys to the property. So I think I 100% agree with you. The biggest mistake that I see is people attacking a property manager on at the end and then choosing on fees, which what a silly basis to try and make a decision when the level of service from property managers is often absolutely chalk and cheese. And I'm going to get you to sort of unpack for us what we need to look for in that shortly. But from your perspective, and I'm talking at the industry level now, Jo,

what's one property management idea that you often hear other property managers and experts in the field say that you disagree with? Wow, what a way to put me on the spot. Um, oh, wow. Um, there's a lot I actually do disagree with in the industry. Um, I have to be perfectly frank about that. Um, I disagree with, uh, a property manager's view of what their role is. Um, I fundamentally disagree with that. I don't hear a lot of property managers speak in the same way that I do. So a lot of property managers really do feel like the way they

approach their work is quite reactive. And they call themselves property managers and they think that their biggest tasks are to collect their rent and fix tapwashes when they're leaking. I disagree with that so fundamentally. I'm not a property manager. I call myself an investment manager who happens to specialize in property. So I'm an investment manager and my role fundamentally, I'm not here to collect rent and fix tap bushes. They are things that I do as part of my bigger role, my more important role, which is to help my client's property perform in the manner in which they expect it to. My job is to maximize the performance of my client's property. It's to minimise the risks that they carry by holding

and investing in that property and it's to help them grow their portfolio as well. That's my role. And I don't see a lot of other property managers who articulate that and I shake my head because I think to myself, you need to understand what your real role is. That is what our role is as investment managers. And I would really love to see other professionals jump on that and really embrace that role and really understand that they can be bringing so much more to the table and be adding so much more value to their clients.

So, yeah, that's where the industry fails, I think. Yeah, totally. I think there's a mixture of expectation from the investor side, but also a lot of property managers really minimising and reducing their role to their reactive bits and pieces when at a strategic level, the value that a property manager brings to the table from a whole series of different spheres. as I sort of went into quite a bit of discussion on the intro to part one of our chat, I think a well-versed investment manager, using your term, and I think that's a great term, that specialises in property, is really what it's all about. So in that context then, Jo, what do you think distinguishes a great property manager from the average or the others?

first and foremost a great property manager or a great investment manager will he will really embrace that strategic investment management role that that that we have um and they will be more interested in helping their clients grow their their portfolios and maximize their rental returns um a great property manager will really understand the intricacies of investment um and it's not just the practical things that they need to understand about yield and market performance and all that sort of thing it's the mindset of the investor and um it's the terminology that investor uses and a great investment manager needs to understand things like uh the different structures that somebody can hold a property in the different tax implications of each of those

structures don't give accounting advice but have an understanding so that the conversations you're having with the client can be meaningful and so you can say to your client you know what I'm not a specialist in that particular area but let me refer you to somebody who is if you don't already have somebody who is it when we understand those things that are not directly property related but very fundamental to property investment success. Once we understand all that, the conversations we have with our clients change. They're different. I have clients ringing me and they will talk to me about their various structures of what they've purchased, how they've purchased it. They're not scared to tell me about the challenges they're facing. And I, as a result, I'm not scared to say,

oh gosh you know maybe i should put you in touch with this person or have you thought about this and you know it's those conversations and interactions that bring so much value to our clients and a lot of people in my industry just don't realize that and it's unfortunate yes unfortunate for some uh and unfortunate for some landlords who don't recognize the difference so i'd love for you to expand on you know what does a landlord need to consider and compare when they're looking to engage a really good property manager they want firstly i always say to look for a specialist i will never so when an investor is purchasing an investment property i will always encourage them not to leave the property with the property with the agency that's

currently managing it which i assume in most cases is the agency that's selling it i always recommend that they move away from that and they find a specialist property manager. When I first started in the industry, I was the first in Sydney to just specialise in property management. But now investors do have other choices available besides your traditional real estate agency. There are a number of property managers who have decided to set up businesses and just focus on property management. So investors now do have choice. And I love, love, love that investors are now seeking out those professionals rather than sticking with the full service traditional agency model. So the first thing is don't leave it with the agency that you've bought it from.

It's a very knee-jerk reaction type of thing to do. It's very, very common to do, but don't do it because that's not in your best interest. When you're looking for a property manager, look for somebody that you can connect with first and foremost. You need to be able to talk to the property manager and communicate well with them. Also clarify that the person you're meeting with and speaking to will be your property manager, or are they a business development manager who will then pass you off to someone else? If they are a business development manager, that's fine, But insist on meeting the actual property manager who will be looking after you because that's the person who's going to be involved in the success

or otherwise of your property. So you want to meet with them. You want to be able to discuss with your property manager what your particular goals are for this particular investment property that you're talking to them about and what you're hoping to achieve. and that property manager needs to be able to relate to that and understand that and help you achieve that. I have an amazing client and she owns a couple of properties and this illustrates it very well. She referred me to somebody else once recently and she said, I really enjoy dealing

with Jo because she knows which of my tenants is a problem. She knows when we're going to move that tenant on and how we're going to move that tenant on. She knows what repairs and maintenance needs to be done to that property. And she knows that when we move that tenant on, that's exactly what we're going to be doing because it's her suggestion. And she knows what sort of rent we're going to be achieving once all of that happens. So you want a property manager who can strategically plan out these things with you for your investment that would be so so important and and one of the things that you really really need to look for I think yeah really well said something I wouldn't mind getting your thoughts on because there's a a lot of debate around the the structure of

property management office and a lot of people in the industry are very pro the sort of pod task-based exercise where every skill is broken up across a different person versus the more traditional portfolio approach where you've got a person that's pretty much overseeing and managing the property from end to end. What's your view on the best fit that's going to give the landlord and the investor the best results as well as work for the office? Can you share some of that for us pros and cons to both structures portfolio is amazing for the client i think because the client deals the investor deals with one person one person only for everything related to their property the benefit to the investor for that is that they get a property

manager who really really learns them and their property intimately um and that is important um as an investor um i want my property manager to remember that blown hot water system three years ago for example well you know that or the little quirks of the property that's really important, I think. The problem with that though, of course, is if that particular property manager goes on holidays, there's a gap. You're putting someone in who doesn't have the same knowledge. Pod, on the other hand, is, I like squad, right? So a squad means a team. And I like to have a team leader who's the squad leader and i like to have a couple of other people but below that team leader uh who does the uh not not client facing stuff but does the fundamental sort of the how do

i put it the grind work yeah um at least for an agency point of view it gives it gives property managers a career path um it allows them to move into different roles within the within the agency it doesn't have to be the squad doesn't have to be task-based so you're not just having one person doing maintenance which oh my goodness i don't know how anyone could do that day in and day out but um you know so you're not just having that one person just doing that um so you you end up with a team of people looking after the property um you will still only deal with the squad leader so the investor has um the investor has that continuity and that continuous hand on their property manager. So they still have that ability to develop that real solid relationship with the

squad leader. But the squad leader can go on a holiday. If the squad leader goes away on holidays or is sick or whatever, you've got other members of the team who can step in and know what's going on. So I do like that. The disadvantage, I guess, to that is the agency will want to put more properties in the hands of the squad, which means that, you know, more properties under management per person, which may not necessarily be a good thing. Personally, I'm fan of portfolio but that's my own personal uh that's my own personal preference well and so am i so uh and again that's based on my good wife's uh experience she spent 12 odd years uh running a very successful property management business but she created a culture uh where she supported

the team to make sure that the team wanted to be there and they stayed there. So most of her property managers were there from the day dot and never left. And that's because she knew them from some of the rubbish that a lot of property managers get thrown into. So, for example, she would mandate a one-hour lunch break where they could take the time to eat their lunch and do their things and educated the investors that if they wanted that contact them, they contact them before 12 or after 1. She also instituted an exercise where after hours work,

it wasn't relying on the property manager to pick up the phone 24-7 every day of the clock, but there was a process that looked after that but also protected the time and honoured the time for the property managers outside of work hours. So I think if you, that portfolio approach where you do have the end-to-end management And there's a level of satisfaction, I think, out of building that depth of relationship with the investor and knowing the property so well that you just can't put a price on in that context.

I agree. Yeah. So I talk to the trainers and others in the property management sphere and they argue with me about, no, your old school portfolio doesn't work anymore. It's no good for the profitability of the business. I say, well, hold on. I think the business is there to actually support the investor first and foremost. And if you do that right, then the growth of the rent roll will tend to look after itself. But, yeah, so very interesting.

Any thoughts on that? Yeah, when people say it's no good for the profitability of the business, my retort would be, well, then you're not pricing yourself properly because property management, sorry, but because it can be profitable. You've just got to understand how the numbers in your agency work. And I bet you that comes from an agency that's been operated by a salesperson and not somebody who's spent a lot of time in property management.

Yeah, so. Very, very good one. Yeah. Let's talk about that because you mentioned early on, you know, that a lot of investors mistakenly make a decision on a property manager on fees. When someone comes to you and says, okay, what's your fees? How do you respond to that?

And how do you educate them to the benefit of paying the right amount? to get your property managed properly? For a start, I always say to people, when they say, when someone rings me and their first question is, what are your fees? I know that there needs to be a level of education happening before we actually get into anything else. And I always respond, look,

I'm really happy to discuss my fees with you, but let me understand where you're at first. And I always like to understand who the person is and why they're ringing me, what is going on with that particular property that's causing them to seek out a different solution. So I like to understand that first before I go into fees. I will not go into fees over the phone ever. um i like to send people and a bit of a blurb and it is a little bit information overload but

my philosophy is if you don't call me back after you've read all of this then you're not my tribe and that's cool that's fine i hope you find your tribe um but if you call me back then you are absolutely somebody who gets it and uh we can deal business together so um and that's yeah and that's I'm I've it took me a long time to understand that as as a business owner but I am so okay with that so I never ever discuss fees in the first conversation they go through my process and so I will um I will send them some information for them to read um they will have the opportunity to book into my calendar so that I can come and visit with them business hours after hours whatever if they're overseas or interstate or um somewhere not in Sydney that's

fine we'll do a zoom call um and then I will dive deeper into the way I do my work um and And generally speaking, once we're in that, they've gone, okay, yep, we get it now and we're really happy for you to take over. And so, yeah, it's during that face-to-face, which is typically our second conversation, that we will discuss fees. Yeah, I love it. They need to understand, I need to understand them and their situation first and then I'm spending time addressing their concerns and queries and strategies and I'm highlighting how my services can help alleviate that.

Yeah, no, well, it's tailoring your approach to exactly where they're at and where they're heading, which rather than the standard flat, if it is take it or leave it. And it may have changed, Joe, and I'd love your thoughts on this, but I know my good wife, Sonia, when she was actively running the property management business, it's nearly 10 years ago now since we sold the business, but she used to say to people, okay, they'd come in and say,

what's your fee? And the standard at the time was somewhere between 6% and 8%. She would educate them on what it, talking what it needed to manage the property properly, and that equated more like 11%. But the difference between 11% and 8% or 6% was a couple of cups of coffee a week. So she used to say to them,

if you're prepared to put your property at risk for a couple of cups of coffee a week, then that's your call. That's up to you. You need to make that call. But if you want the job done properly and you want your asset to grow and be protected on the basis,

then for us to do that in the quality that it's required, this is what we need to charge to make that work yes yes um it hasn't changed you know 20 20 or back in the i was going to say 20 it's probably more than that now um back in 1997 when i first started my own business um in sydney the fees were seven percent um and um that was but even before that they were regulated at seven percent and then um sometime in the late 80s and early 90s deregulation happened and um most people started left their fees at seven percent and there was a lease preparation fee as well but we never had things like vendor market uh landlord marketing costs or anything like that um when and not much has changed and people held their fees

fairly well back then but now um I I do a lot of um uh looking around at what other agencies do and um I also have another part of my business as well so I have the opportunity to consult other agencies about what they're doing and I see I see fees as low in Sydney as two percent which is just shocking to me, absolutely shocking. Yeah, but when you do do the numbers, from an investor's point of view, when you do the numbers between a 7% agent and a 6% agent, the cost difference is minimal. but the service levels you'll find are probably miles apart I would say

and those agencies who are quick to drop their fees just to win the business are simply numbers driven I would suggest and more more concerned about how their KPIs and stats look at the end of the month rather than how well your investment is performing. It's a broad brush, I know, but that's my view. Yeah, I agree. I think the obvious implications of that, if we're talking 6% or 7%, that's a bit under 20% differential. That means you've either got to manage the property,

managing 20% more properties to get the same result, or you're getting an inexperienced property manager and paying them less to try and achieve the same things. And either of those is going to end up with a bad result for the landlord investor. So it's understanding what you're paying that is the key there. Joanne, lovely to see your quite unique PERFORM active management framework that I've heard you mention in the past.

Can you sort of tell us what the PERFORM stands for and then break it down in terms of what that actually means? Sure. So the PERFORM active management framework is, well, I believe there are seven distinct pillars in what constitutes good management of a property. And so PERFORM is an acronym. And what I found was when those investors who are more interested

service rather than just how cheaply they can get someone to collect their rent, they find it sometimes a little bit difficult to actually understand what they're buying. So this was a fantastic way for me to put my product down on a page. You're going to understand exactly what I'm talking about. put my product down on a page and illustrate it in a visual manner so that when I'm speaking with prospective investors and clients they can see that it's an actual thing that they're getting rather than some abstract idea and I know that you understand that I can yeah but um so so it is an acronym and it's planned so and it follows the investment journey over a 12-month journey

from right from the beginning when they decide to put their property on the market for rent right up to the end. So the pillars are planned. And so that's not, that's just, you're not just going to go wake up one day and go, okay, I'm going to put my property on the market. No, you need to plan these things. Something as simple as calling an agent in, doing an appraisal, doing an audit on, you know, lick and spits and things like that that need to be done. So that's your planning stage and then we're engaging the market preparing the collateral putting the property on the market uh extracting tenancy applications and things like that and i have my three p's of leasing philosophy that goes around that as well and then we have rigor um and that's

making sure that we're um setting everything up right we're getting everything right and protection That's a real protection piece, the rigor piece, making sure that the lease terms are bespoke to the property, making sure that the entry report is as thorough and making sure insurance is in place, that sort of stuff. And then we've got the fundamentals, and that's your day-to-day management of the property and the things that arise. and then we've got optimize which is um the bit that we do where we're really concentrating on getting that property humming and performing at its peak and then we've got our reporting section and so we've got um one two three four reports that our clients will receive from us four different reports rather they'll receive reports from us every month but four different types of reports they receive from us. And then the last one is magnify, which is basically let's start it all

and do it all again, but also grow the portfolio. That's the grow piece that a lot of property managers don't actually think about. But I do because I really want to help my clients buy their property number two and number three and number four. So that's the magnify piece at the end. So it kind of follows a 12-month tenancy journey and then we go back to the beginning. Yeah, I love it. It's a circular repeating exercise based around that word perform, which is easy to remember and really captures all the key elements of it. You touched on the three Ps of your unique leasing philosophy.

Can you break that down for us as well? Yes. So there are really only three levers that we can manipulate when we've got a property on the market for rent, and they are promotion, presentation and price. And most people will think that price is number one, but I put price as number three because it's not the most important factor. The most important factor is promotion. And I say it's most important because if I'm not getting the property in front of the right eyeballs or enough eyeballs, we're not going to have any tenants

interested in the property. So I put promotion as number one. I really focus on that. Um, I actually don't use videos in my, sorry, I don't use photographs in most of my advertising. I'd say 98% of my properties are leased with using virtual tours and video walkthroughs. And that was that I made that decision based on feedback I was getting from prospective tenants when they're inspecting other properties. Prospective tenants are so sick of turning up to properties that look absolutely fabulous online and then they get to the place and it's an absolute dog box. because the photos are manipulated or they're 10 years old.

And so I thought, well, look at that. I'm not here to waste anybody's time. So videos and virtual tours, they're the guns. And then presentation is simple. I really make an effort to get to a property 20 minutes before an inspection. The other thing I do, by the way, is I actually don't have open houses unless I have to. um i think they're a lazy way of finding a tenant i hate them they're lazy um and you know when you've got 20 people treks into a property you don't know arthur from martha how am i supposed

to be able to recommend somebody to my client so i do private appointments right yeah and um so presentation is about getting to that property early you don't want to do all that hard work and promotion and then get to the property and have these tenants turning up and being turned off because the property stinks or it's dark and dingy the windows aren't open there's mold or dust and so it's just making sure that the property is being presented in its best possible way um you know i've got air freshener i've got this whole leasing kit in the back of my car air freshener baby wipes cleaning products and all that sort of stuff a typical property manager um and then of course it's price so if i've done my job properly right

promotion and presentation the two first p's that should that should generate the inquiry that i need and the applications i need if they haven't then the only other lever i can manipulate is price but what i like to do with my clients is i like to set three prices i set a floor and that is the price that we're not going to go below because i'm going to rent that like that any day of the week we're not going below that price uh but the second price i set is the ceiling it's the it's the stretch goal it's wouldn't it be fantastic if i could get that and that's where we market uh and the third price is the sweet spot in the middle i usually have a good idea of what that's going to be now my clients give me the authority to negotiate between those three points yeah i

always start at the stretch goal and if i don't get anywhere in the first seven to ten days then it's straight down to the sweet spot and my clients know that that's the way it goes and um as a result we get fabulous tenants in very very good time frames i i can't tell you i've done some random studies on some properties and we're leasing properties up to four times faster than our other agencies in the area so it works my clients love it it gets great results it's a great it's a great approach and you know it makes absolute common sense um the way you described it but but as you say i think a lot of people are lazy uh and don't don't think beyond what's in front of their nose so there's no planning in the process uh and and the results

speak for themselves so something that i guess a lot of people are going to be thinking now like, okay, I'm really liking what I'm hearing from Joe, but I'm stuck with my existing property manager. Or what I'm seeing an increase in recently is that with buyers agents getting more involved in the purchase of properties for investors who are buying either properties that are already got a property manager attached and there's a lease in place. What do you say to those to go, oh, gee, I'd really like to move across to you, Joe, but I think it's all too hard. I've got the handcuffs on. Can you just talk to us briefly about what's involved in being able to make the move if you're being forced to accept the property manager or you're not happy with your property

manager and you want to make a move? Just tell us a little bit about what that involves to make that change. Mistakingly, a lot of investors think that they can only move their property from one property management provider to another when a lease is expired or when the property is vacant but that couldn't be further from the truth a property you can switch your property managers at any time now there will be a certain notice period that you may need to observe uh with your existing uh incumbent property manager um if it's vacant most agencies will actually waive that notice period because they're not earning any income from the property anyway and so most will actually let the property go without any notice but if the property is

occupied then notice needs to be given but what you what an investor needs to do is just Interview a number of property managers and find somebody that they want to work with first. Engage them via their agency authority, their management agreement, and that property manager will handle the transfer. That property manager will send correspondence to the incumbent to notify them of their appointment. The incumbent may wish to confirm that with a quick phone call to the investor, um but the new property manager will handle everything it is a it should be a very seamless easy process that the uh investor should not be frightened to undertake if they're not getting

what they need or uh thought they were going to get yeah love it love it and the same applies to I'm seeing an increasing trend where selling agents are putting pressure on buyers to accept their own in-house property managers. I've got a real problem with that because there's no independence right from the get-go, and therefore you're not getting impartial advice from that property manager, and there's a subtle risk to do it. What's your thoughts around that, Shelley? i absolutely believe that an investor should not leave their property with the selling agent um when they um purchase an investment if the selling agent and the man and the and the incumbent managing agent are the same then um what i would be concerned about is what

sort of deals and negotiations have taken place that you as a incoming investor are unaware of For example, the tenant might have an arrangement with the incumbent property manager about, oh, I don't know, a hole in the wall that needs to be replaced, but the agent has turned around and said, don't worry about it. We'll worry about it when you move out. No, that's not in your interests. That's in the tenant's interests or that was in the old owner's interests. It's not in your interests as the new investor coming in. So you want a clean slate, I believe. You want to just started off where you've employed the property manager their their their instructions are explicit their instructions are to work in your best interests uh so there's no ambiguity

about who who the master is um i you know i say that with inverted commas but um you know what i mean um so there's no confusion about that you have to be so careful these days of what you say right um but there's no confusion about who that um who the principal is um and who the property manager needs to um take care of um so that that would be the main reason why i would suggest that you as an investor move the property you just want to start clean um now in that case the incumbent will they are required to hand over the entry condition report um the current lease agreement and and those sorts of things so the investor needn't worry about not having that documentation um because um the property manager does need to hand that over on settlement so yeah no

extremely well said uh i touched on the intro the uh the sort of ongoing rippling waves of legislative changes that are happening, not only in New South Wales, but started that rippled into Queensland, South Australia and WA. I'd love for you to get your thoughts on that, particularly from the investor's perspective in terms of what does it mean to them? What are some of the things they need to be aware of and what impact or any, if any, is it having on them and What do I need to be doing to better position themselves? Investors are having their rights impinged upon. I can't sugarcoat it.

Their rights in some respects are being taken away completely. It annoys me and frustrates me. And I don't want to paint such a grim picture, but compared to – we're giving up a lot. Investors will be – no, we're not giving up a lot. That's the wrong terminology. we are having a lot taken away from us as investors in residential real estate. So currently, as investors, we enjoy certain, you know,

if we have a tenant that we need to move on, we have the ability to do that. That will be taken away from us completely. um we currently have the ability to um approve or not approve uh pets or um stipulate the type of pets that we will approve that will be taken away from us completely um we will have the ability to terminate tenancies but only in certain circumstances um we we will even lose the ability i hate to sound so pessimistic but we even will lose the ability to end a tenancy agreement on the basis that the fixed term is expiring so a contract is no longer a contract that we can rely upon and we will end up in a situation where we have

potential life tendencies so what's that going to mean it's going to mean for an investor that you need to be really careful who you choose as your property manager because you want your property manager to have complete robust processes and mindset when it comes to tenancy selection um you all because we are now going to have to be so much more careful about who we put into our investment properties the other thing that we're going to need to do as investors is ensure that our property managers are doing their inspections the legislation allows us to do up to four inspections per year most agencies don't do that most agencies will do one or two inspections now the way that the draft legislation has been written is that we can still we will still have

the ability to terminate a tenancy on a breach however it's going to have to be a persistent breach um and breaches have traditionally been difficult to win possession on so a property manager now is going to have to be so finicky and so particular in their entry condition reports yeah and then in their um routine inspection reports god i really hate the word routine inspection because there is absolutely nothing routine about them but anyway yeah um that's another conversation but so there's going to have to be they're going to have to be so particular about that and investors are going to have to demand that from their property managers because again we are there to protect our clients and their properties so investors are going to have

to demand that finicky nature and that particularity in those reports that we're preparing. And what's that going to mean, though? It's going to mean a hell of a lot more work for property managers. It's going to mean that there's going to be a lot more conflict, I think, between property manager and tenant because we are going to have to constantly think to ourselves i'm working to build a case i say everything that we do every email that we send every photograph that we take it's all because we might end up in ncat and

we're going to have to rely on it and so we always now have to have that in the back of our head that's no way to have a relationship with somebody but that's what we're being we're going to be forced to be that way so and that's going to mean as well investors i'm sorry your fees are going to have to go up there's no other way around it if you want someone to take care of you the way you need to be taken care of with the complexity of the legislation that's coming in it is um it's inevitable and you just have to understand that and you have to be prepared to pay because it's going to be a very difficult environment now. I hate to sound pessimistic, but that's the reality of the situation.

It is the reality, and sort of from what you shared with us, it's going to become a much more adversarial, case-building, highly documented legal environment, really, as a consequence of that, which seems to fly in the face of the intention of the government. For me, it's actually going to make things worse, not improve the situation. Yes, it's going to make things worse. It's not going to make the situation better.

But I have a personal belief that there is an ulterior motive there by the boffins in government and bureaucracy. They do have an ulterior motive. It's not popular. Look, I honestly think that they actually want to get rid of your, what do you call them, your mum and dad investors, your normal person as an investor and replace them with institutional investors.

But guess what? Institutional investors can't make it work. So it's never going to happen. Never going to happen. No, it's a scary concept, sadly. uh now i know we only really touched the surface of that uh and and i'll get you back to talk about that uh more in the future and is is there anything that we haven't covered around the property management piece uh that you want to share before we jump into the the old ambush

round so i just really want owners to remember that uh property investing isn't set and forget um a property investment is um it's an active pursuit and um look i like to say to my clients i i become you and you don't have to do anything other than read your statement and check your bank account but at the same time uh if you want to maximize your investment then um then you do need to maintain it at a particular level um so establish a slush fund a sinking fund uh so that you can actually upgrade your carpets um paint uh fix your hot water system that sort of stuff um so yeah make sure that you invest in that and um uh yeah just keep the prop and that will help you keep the property uh humming along nicely um there's so much more i can say but i know that

we've got limited time but um yeah and don't skip on your property management we are here to help and maximize the performance of your investment um yeah very well said uh i'm just going to encourage everyone to uh have fruitful and deep conversations with their property manager before they decide to engage so that they are really engaging someone like yourself who's serious about holistically and strategically and proactively managing the investment, not just focusing on the reactive bits and bobs associated with the property day-to-day.

So awesome. We'll definitely expand on that in the future, Jo, but sort of jumping into the old ambush round part two, let me kick off with what's your favourite quote and why? Oh, my. Actually, my favourite quote is by somebody anonymous, and I read it in a book. The book is called Thick-Faced Black Heart. The author of the book, she's passed away now, but her name was Ching Ming Chu. And the quote, and I'm going to mess it up because it's a little bit long, but the quote in the book that she quoted was something like, that which separates those individuals from their liabilities,

from those individuals who break the rewards from said liabilities, lies in their ability to endure while learning to utilise those liabilities as the instruments that shape their success. A bit long, a bit of a mouthful, but in a nutshell, if life gives you lemons, learn how to make lemonade, but endure while you're doing it. That's a great quote. I hadn't heard that one.

So that's a really good one, actually. I'm going to dig that book out and add it to the list. Apart from that book, is there any other book that you'd recommend we read and why? It's not investment related, but I loved the – well, actually two. I really enjoy business and I love the E-Myth Revisited and I really love Traction. Oh, my goodness.

They both just kind of sent fireworks off in my brain. I love them. And then there was also the McDonald's book, what was it called? The Founder, I think. I can't remember. It was about McDonald's, the story. And Cronk. Yeah, yeah, yeah.

Yeah, yeah, yeah. Perfect. Yeah, now that Goodreads, all Goodreads does. and applicable across the board, really. Slightly different change in tack. If I was to give you $50 million in cold, hard cash right here, right now, what would you invest it in or spend it on and why? Would you say $15 million or $50 million?

$50 million. Five-zero. Okay. What would I spend it on and why? I would firstly, I would set up a university for homeless kids, youth. Education is big for everybody, but the youth who have been struck by circumstances out of their control don't deserve to end up without aspirations. So I would really love to grab all of those kids who are homeless or otherwise affected and give them something to look forward to,

give them an education so that they can become productive members of society. I'm really, really passionate about that. So I would do something along those lines. I'd also invest in a shopping centre and a hotel. Monopoly, here we come. I love it. Yeah. Multiple streams of income or need. Yeah, I love that. I love that. Last one then, if you could wave a magic wand and change anything, what would you change about property

management? The mentality. The mentality of industry. I really, really believe that property managers need to be licensed, have their own dedicated license, or at a minimum, have a specialist designation you know like a family lawyer you can you can do a bit of extra study and have that specialist designation i really think our industry needs something like that um we we we just need to be i love my industry but we do need to be better in so many different ways um and i would love to see that happen yeah no extremely well said last question really joe if i ask you to get invested what does that mean to you you know what an image of um uh me in painting over and a roller just popped into my head so maybe it's uh get invested it's it get

into what you're doing i for me that's renovation i don't know i don't know why that image just popped into my head it's so bizarre no i love it i love it that's great but that's what it's all about actually so uh look i i um uh for anyone who wants to connect with you we're going to have all of your uh links in the show notes uh for anyone who's serious about getting their property managing properly with the rental uh rental specialists uh we can do so just for uh clarity i guess uh joe uh for those that are going wow i love what joe's sharing with us what areas do you manage properties in in case you're deluged with people from across the country that you're not actually physically able to help uh so my property management complete done for you

is sydney-based so i'm in glebe in sydney but i manage properties from penrith all the way up north to pimble um and if i have volume i'll also have a look at the illawarra as well um but i do also have a done with you model that's uh new south wales wide and that um that that is designed for people who want to be a little bit more hands-on um so it's less less property management but it's kind of property management with a bit of a safety net so um the point is just give me a call and if i can't help you well then i can certainly I can certainly direct them to people who are as good as me. Yeah, love it, love it.

And that's half the battle at times. Look, Jo, again, we've only really just scratched the surface of this pretty big subject, so I'm looking forward to getting you back to dive into some more of that. But I do want to thank you for taking the time to inspire and educate us on the benefits of property management, and how to do it properly over the last two episodes. But before we close, if anyone watching or listening would like to explore how property can help you to better achieve your lifestyle goals with property by freeing up your time and creating an income for life, whether you're new to the game or an experienced investor or property payer, feel free to explore our Why, What and How Successful Property course that unpacks my four decades of property and life experience by tapping into our recent release Freedom Formula course that's based on my book.

and you can enjoy that anywhere, anytime at your leisure. So just click on the show links to get access to that or go to bushingmartin.com.au forward slash freedomformulacourse. And if you'd like to delve deeper into your very specific confidential property needs or challenges, feel free to book in with me now for a property solution session by clicking the link in the show notes or by going to knowhowproperty.com.au

and hitting the purple book appointment button where we'll get to spend a complete, dedicated and uninterrupted hour on all things that you need and want to know about property investment. Well, that brings us to the end of another great episode and a couple of really good conversations. So thanks again for getting invested and let's keep the conversation going, Jo. Thank you. Thanks for tuning in to Get Invested on the Property Hub podcast channel, your home for property investment insights and inspiration. Make sure you subscribe to Property Hub for free. Get your weekly dose of Get Invested inspiration, along with every episode of Realty Talk, Australia's top online property show for

red hot property investing news and insights direct from industry leaders and influencers. And finally, I'll see you next time.