Brisbane rental crisis: An insiders view

In recent times there has been many a discussion on the emerging rental crisis in Brisbane.  We have heard of renters being forced to bid for properties, owners upping rents in mid contract and houses being rented that are somewhat in need of repair.  With vacancy rates hitting the 1% mark I really think we need to discuss this and look for viable alternatives to what is being offered.   The situation had become so bad that people were camping out on the Caboolture show grounds.   What I want to share with you is my story in the Brisbane rental market over the last few years and what I think needs to change.

Arriving in Brisbane in 2002

I first came to Brisbane in 2002 and rented a place in The Gap in the western suburbs of Brisbane.  It was right on the edge of the end of Brisbane State Forest Park and I thought well this is a pretty cool place to live… although it regularly took me 35 minutes to get to work at the university.  We lived there happily for quite a time until problems started to emerge.  The house we lived in was old and was in the process of being renovated when we moved in.  I thought to myself, ok I can live with this.  They put in a new kitchen for us (which I thought was nice) and we were happy.  One day my wife noticed that the vinyl coating on the new kitchen bench had folded up in the edges.  Considering the kitchen was new we thought we should do the right thing and contact the property manager at the real estate.  Her inspection lead to the conclusion that we had done the damage.  I was horrified they were going to slug us with a huge bill to fix it!

My wife swung into action and called a friend of hers who was a Cabinet Maker.  He took one look (remember one) and showed me where the sealant was not applied to the bench top properly.  We knew that we had not done anything wrong despite the real estate lady insisting it was us.  The owner contacted us personally and came round to our house to discuss with us the issue because by this stage we had independent evidence that we were being taken for a ride.  She took one look and agreed with us and the people who installed it had to pay for it to be fixed.   By this time, we thought that was that.  Until we got noticed from the real estate that same year that we had to be out by the end of December/Early January.   The owner had told the real estate she was giving the house to her son (half his luck!) and we would have to move.   We were given three weeks notice.

Moving out 2003

I rushed around like an idiot trying to find a new place to live and finally settled on place in the same suburb that I thought would do the trick.  It had no yard at all and some damage (a collapsing retaining wall which to this day still hasn’t been fixed).  It was a bomb but it was close and I had run out of time.  After I signed the new lease, I got a phone call from the owner saying that she had instructed the property manager to tell us that we could stay as long as we like so long as we were actively looking for the right place.  I think, out of spite, the property manager screwed us out of the deal because we had made her look stupid.   Nevertheless, we settled for it because I had already signed a lease which in this country is a binding legal arrangement; so I had no choice.

The new place 2004

As I had suspected the new place was problematic.  The roof leaked downed the walls near electric sockets and it was filled with Asbestos.  With my daughter being an Asthmatic I inquired about the roof asking the property manager what I thought should be done about it.  I was looking for a patch job because I didn’t want Asbestos leaking into my daughters room where she could have a coughing fit and inhale the stuff.  When it came to the crunch after me bothering her for months and months she finally said the owner is going to replace the roof.  I thought at the time she would rehouse (at least temporarily) us and that would be that but I was wrong.  They were going to remove the Asbestos roof with us going on our regular lives, charging us rent, all the while exploiting genuine tenants.  I had to break lease and get out of there.

The new place was great but the old property manager held on to our bond (minus the re-letting fee) for almost a month.  Fed up and in debt I rang her and said if you don’t give us the cheque I am going to take you the rental authority.  The next day it turned up.   What a surprise she had it all the time, hoping (I’m sure) that I wouldn’t collect.  I also remember a strip of grass at the front of the house was a little bit longer and she told me she was taking $20 out of bond.  I told her that I going over to mow it as it would cost me less in petrol and time to mow it.  It took me two minutes to mow the strip of grass which technically wasn’t even part of the property.

Stafford Heights 2004/05

This was a great place and we lived their for two years until time to move came along.  I was paying $280 a fortnight rent for a home that I knew to worth much more.  When the lease came up I was told the new terms would be $330 a fortnight.  I was utterly shocked.  The real estate lied to me by saying, ‘oh well that’s what the owner wants?’  I really don’t have time for people who say one thing and do another.  You cannot tell me that the property manager doesn’t take her 8% seriously.  Wouldn’t you negotiate up with the owner? I would!  The way I see it the investor wants an advocate that will drive a property’s rent value up to the maximum because they get something out of it.  This is collusion of the worse kind and towards the end of this article I am going to suggest an alternative.  I negotiated (as always) with the real estate for the rise and was told to move out!  That I did to a small, run down shack of a house in the same area.

The Shack 2006/07

I have never lived in a place where I felt one strong gust of wind and I am toast.  I mean this house was very close to being demolishable.   This was very much a ‘renovate or detonate’ affair.  When I went to sign the lease there were about 10 people who had contracts.  Here’s something I have learned from business, always follow up.  I rang on the following Monday after putting the contract in on Saturday and got the place ahead of ten others.  I had learned about faith by this time so I claimed it.   I have to say, I was suckered in here.  Be careful what you ask for, if you have a clear cut objective, and a picture of it, you will get it!  Even if it’s bad for you.   I had also added a sweetener into the deal by telling the real estate that we would renovate the gardens for the owner.  That was attractive to them because the gardens were overgrown with Singapore Daisy.  It took us about two weeks to remove that plant from the garden and I have to tell you if you are planning on using it, for the love of God DON’T!  I had made an arrangement with the owner to pick up the plant clippings and he reneged on the deal.  Leaving us with a pile of clippings in the front yard the size of a small mountain.  The owner went back on his word so I complained to the property manager and she did absolutely nothing about it.  No wait she did, the owner decided to sell the house.

Notice to evict 2007

Things were going along smoothly until we were asked to leave with two months notice.  I really appreciated that because I was in the middle of semester and I had just started this blog.  I had two months to get my act together.  We found a cute little place in the same area and have settled there.  Sure, it has a broken light, mosquito plague, an open sewer pipe, a broken sink, a black stained bath, no fence, a wasp plague, no front or rear screens, no garage, no carport, pets outside (which makes my pet loving wife very happy) oh and the drains have been clogged.   I am happy with it though because I have no choice and I cannot afford to live anywhere else now that my daughter is going to the local state school.

What’s the difference between then and now?

The house I had in 2002 was a very sturdy full fenced rental.  It was well maintained.  The house which I am playing almost $90 a week more for now is totally run down.  When we moved in it was so dirty I couldn’t believe it.   Now, I would say that house we rented back there would easily get $330-$350 a week in this market.   I find myself looking again at outward opportunities and working weekends to get there for a house which averages in my neighbourhood for a little under $380,000.  Who the hell can afford that on one income?

What’s wrong with the system

There is the investor (which I will be one day), the real estate and the tenant.  Then there’s the toothless tiger of the RTA.  All three of these would not exist without the investor.  Now that Australian house affordability is at an all time low and is most likely the lowest in the world, rent will continue to increase and the quality of the offerings will decrease.   15,000 people were evicted from their homes because of mortgage defaults last year, no wonder people kicked out John Howard.

Towards a solution

Personally I think a good solution is to move property managers into government funded positions or some other arrangement where they don’t get their income from the property they are renting.  How can this be?  They need to be an independent voice that gets money from other sources.   The reason we have bidding on rental properties is because property managers get more money out of rental if they can drive the price up.  Why do they always stall on doing repairs?  Because, they are getting more money by stretching it out.  I have never once had a property manager say to me, ‘you know what Luke, we are going to leave it as it is.’ Not once!  Why is that? Because they have a vested interest in maintaining a system that rips off tenants and puts money into their own pockets as well as into the hands of the owners.  If you removed the stake they have in the property and reward their job performance on how well they balance the needs of the tenant and the owner then I think a fairer less rort-filled rental environment can emerge. At the moment, at least where I live the scales are very much in favour of the investor and the real estate.  Yes, I know bad tenants are as common and that’s where investors can lose a lot of money.  Way more than a bond covers.  For me however I have never ripped anyone off and I still get lied too, cheated and so on.  The system doesn’t work.  How can it when those that are doing what’s right constantly wind up on the wrong end of a very short stick.

I know of a place that was being rented where 10 people had stayed there when one was signed on the lease.  I have also seen people abusing landlords and so on.  What I am saying here is that in an investor driven market those least fortunate always miss out.  This is very much the case here in Brisbane.  Families are missing out.  People who are honest, hard working people are missing out.  What will Australia look like if this phenomena continues and there is no third party revamp of a failing rental system?  Housing commission increases, emerging poverty and most importantly less investment in property development.  Why would you sink money into a system that has no i?  I wouldn’t!

The insiders view

This is really just the tip of the iceberg here in Brisbane.  I love this city.   I don’t want to leave and take my kids to another place but I am so close to doing it because I am fed up.  Would it make any difference if I did.  I doubt it.  If you read this and you have had a similar experience to mine.  Let me know.  If you know someone who has, let them know and tell them to visit here and I will post a list of experiences just like so we can start talking about these things.  I would also welcome investors to tell me their side of the story because quite often they are getting ripped off as much as tenants (as per my earlier story).  If you are really keen then visit my forum and post a new thread there.  Thanks for reading!

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