What are the differences between owning properties in the United States and Australia?

Kevin Davidson - Tuesday, November 21, 2017

Steve: Hey everyone, this is Steve Rozenberg with Empire Industries Property Management and Realty Services. And today I’m here with a very special friend, Dot Hamilton. Thanks for coming here today.

Dot: Hey Steve, how you going?

Steve: So, Dot owns a property management company in Australia, and you manage about 600 properties.

Dot: Yup, it’s on 600 doors.

Steve: 600 doors. And, so obviously, there’s differences between Australian property management and the United States property management.

Dot: Yes.

Steve: What do you see is a fundamental difference between, let’s just say, property management, landlords and tenants in Australia and what you’ve seen. You’ve been in our events. You’ve been to different events. So what are some differences that you see with that?

Dot: Obviously our size, there’s only 27 million people in Australia, which I think some cities in the States have 27 [million] people.

Steve: Yeah, Los Angeles, maybe 27, yeah.

Dot: I think Australia, we’re very very highly legislated.

Steve: Yeah.

Dot: We’re extraordinarily highly legislated. The state that I’m from, in Queensland, we’ve got probably the most… we’ve got 16 different legislations that govern…

Steve: 16. Wow.

Dot: 16 different legislations that govern property management. We’re very legislated. We have a very high number of managed properties compared to a lot of other countries. A lot of other countries, it’s at maybe 80-20 ratio, where 80% are managed by owners.

Steve: Yeah.

Dot: And 20% managed by agents. Well…

Steve: Which is almost flip-flop in here.

Dot: It’s completely flip-flop. In New Zealand, it’s like you guys too. So how that came around with the 80-20 was because we became highly legislated.

Steve So owners say I don’t wanna mess with it?

Dot: Basically what we did was we, real estate property managers, we forced the legislation through in a lot of cases, because we were becoming like America. We were becoming very litigious.

Steve: Right.

Dot: And the only way we could counter that was by having legislation checklists, best practice policies, procedures. So then what’s happened is over the years, we then…the landlords have become educated that it is actually…if they have an investment property, it’s a commercial decision.

Steve: Right.

Dot: So as a commercial decision…

Steve: You’re running a business. Sure.

Dot: You’re running a business so let’s have a professional manager.

Steve: Makes sense.

Dot: I think probably the worst part for us is that we haven’t been able to really raise our fees accordingly. So, in the last 20 years, it’s costing us a lot more to do business. But…

Steve: Right. Cause your expenses go up but you can’t raise your fees.

Dot: Your expenses go up and can’t really raise your fees.

Steve: And there’s so many other… there’s so much other competition with other property management companies.

Dot: And I think you and I have spoken about this in the past, there’s the accidental investor. So there’s the accidental investor and there’s the serious investor. I think the accidental investor, the education process with them is changing very much because they’ve gotta start understanding that it’s very much…it’s very much we have to adhere to the legislation.

Steve: Right.

Dot: They see it as everything’s in the tenant’s favor. But what we’ve gotta try and get through to them is that it’s actually risk management.

Steve: That’s correct.

Dot: We’re actually saving…we’re looking after them with the risk management strategies.

Steve: That’s great. So there you have it from an expert in Australia. This is Steve Rozenberg from Empire Property Management and Dot Hamilton from First National…

Dot: Palm Beach.

Steve: Palm Beach. We’ll see you later. Buh-bye.

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