Big end of town get efficient at property management

wow 14% eviction rate per annum.....

- How America’s New Landlord Is Kicking Tenants to the Curb

I know BrickX and other Australian versions of "big end of town SFH property investment" hasn't penetrated much in Australia but would be interesting to see how this went down in Australia.

 

It just wouldnt happen here under current circumstances.

Now, if we had a massive, massive property correction or collapse, and Australian banks or super funds bought up swathes and swathes of resi properties at dirt cheap prices, making the yields too compelling to ignore, and then needed to set up some sort of industrial scale , centralised tenancy management business to run it all, and then they imposed ruthless zero tolerance practices within that business, perhaps something like this could evolve here. But that's only "if" they could figure out how to get around the very tenant friendly , tenancy laws and protections that are already in place.

I doubt it very much though. Consider this ; even the larger REIT's here are skewed towards all commercial, with little or no residential. Ever wondered why? I have. The reality is - resi property management is just too hard and too tenant friendly in Australia for institutionals to bother on a large scale. Then consider this; Even with the massive additional tax credits available through NRAS, which turned resi property into an asset that outperfoms the returns of any other asset class available to Australian investors, institutional investors showed zero appetite for owning large numbers of resi property. Banks, super funds etc... they just didnt get on board. Full Stop. Whereas the Low Income Housing Tax Credit in the USA , which NRAS was based on, is gobbled up by institutional Class C corporations... absolutely gobbled up . Over 2.5 Million LIHTC properties delivered since 1986.

The only organisations in Australia with any "scale" of resi property ownership are the community housing providers, and even that scale is quite small. Moreover, CHP's are not for profits , generally staffed with quite left wing / socially responsible types , and while they arent actually Govt agencies, they are run as very conservative Govt type beauracracies. Its just the culture of that sector. So they just wouldn't countenance this sort of ruthless capitalist zero tolerance behaviour even if they had the ability to try it on.

Then there;'s the Australian attitude to capitalism. We have universal health care and a social safety net, and this sort of activity ; kicking people to the curb, just wouldnt fly here politically.

For all of these reasons, I just dont see how this sort of situation could ever occur here

 

The story highlights the differences between US and Oz tenancy law as well as differences in our RE licensing systems.

The US REA is unlicensed, hence the use of external call centres. In Australia every person within the agency must have a certificate of registration as a minimum ie to understand the property transaction and rights of each party.

The lessor is seeking to maximize returns by actively managing the portfolio - arrears lead to termination, no excuses. The cost of termination is minor about $100 (1/2 week rent).

Vacant possession is swift - 7 days

There's no mention of vacancy rates but it's likely that there are rising rents, a tightening of the rental market, fewer vacancies, choice of tenant, increasing property values all of the back of some recovery in the market.

@euro73 has raised a few other valid points on the commerciality of our corporate investors who are yield driven.