Highlights from this week:
- Student accommodation opportunity
- 40 most affordable areas
- Owner occupiers see opportunity
- It was harder in 1990 to buy
- The Mentor steps in
Student accommodation – Brad Beer
Kevin: There are more than 71,000 purpose-built student accommodation beds across Australia’s eight capital cities. That’s according to the 2017 Savills Australian Student Accommodation market update. Despite this, demand for student accommodation far outweighs existing supply. That’s according to Savills.
Less than 11% of the full-time student population accounted for in each of the major cities, with Canberra, the only exception catering to 28%. Given the shortage, many students look for alternative accommodation by renting from landlords who lent out regular residential properties.
Today, I’m speaking with Brad Beer – Chief Executive Officer of BMT Tax Depreciation – who’s here to provide us with his advice to investors who are considering investing in purpose-built student accommodation or planning on renting out their residential investment property to students.
Good day, Brad. How are you doing?
Brad: I’m good. Thanks, Kevin. Great to be here as always.
Look, how I went through uni and I lived in shared houses and shared accommodations – a fair few years ago now – but was on the other side of this situation in the past as well.
Kevin: It’s always been a hotly discussed topic, student accommodation. Are there any added benefits for investors who are considering investing in purpose-built student accommodation or properties that are located nearby, say, to universities?
Brad: I think two parts of that question from a depreciation point of view. Often student accommodation is furnished and therefore the deductions are quite high for what they are. Also, if it’s a purpose-built student accommodation, they’re normally a small bit of accommodation and the amount of plant the equipment and things in there as a portion of the overall cost is usually a high percentage.
So, from a depreciation deduction point of view, they’re actually often quite good as far as what you pay versus what deductions you get. Now, I’ve never been one who says ‘‘you should buy this one because of depreciation,’’ even though I’m the depreciation guy. You have to consider all the rest of things about why you’re investing in a certain type of property.
As far as properties in areas around a university, I do own quite a few properties around a university area. I have a lot of property in the New Castle area. And I know one thing, for example, that I’ve tried to do, is properties… Even though I’m not necessarily always looking for the student as tenants – and not that I’m against students as tenants – I’ve had them as well in those types of properties.
One thing I do try to do in those areas is that I understand that there’s a lot of pressure on the market for rentals around the time at the start of the year, so all of my leases on those type of properties, I try to make sure they always end around January, so if anyone’s thinking about moving out, I know. Even if I don’t take the students, I have pressure on the market to maximize my rental out of those properties.
Kevin: It makes sense. Is it possible for you to provide us with an example of, say, the depreciation deductions, the comparisons that an investor can claim for the two different types – purpose-built student accommodation and renting out a standard residential property?
Brad: I did numbers on just a simple two-bedroom furnished self-contained student unit, should it be rented? And a lot of the difference here is the furnished versus not furnished in those numbers. But, something that is a two-bedder with $130,000 worth of deductions in time, over the period of time of ownership or from new to the end. So, not a high construction cost; it’s the granny flat sized accommodation.
I have $7700 roughly in the first year, or unfurnished $6700. So, nearly $1000 difference probably in the first year on something like that, and then over the first five years, nearly $4000 difference in deductions. So, nearly $1000 per year for the first five years in deductions.
So, it’s a few dollars difference in using something for student accommodation there and furnishing it.
Kevin: So, what are the disadvantages that investors should be aware of?
Brad: I think the disadvantages… And I step out of property depreciation here because whether it’s vacant or not or what it is, it makes no difference. But when considering any investment in any way, furnished rental properties have furniture, so you have to buy it, firstly, or have it there, so it costs and then also, things that like break down and there are more things for you to have to potentially fix.
The growth out of these things sometimes is good, sometimes is bad. Who are your potential markets? It’s mom and dad buying it for the kids to go off and go to uni, etc. So, the turnover and they’re not something that often are held for necessarily as long. Summer breaks or holidays, they’re possibly vacant for a bit longer. And if it’s a student-only complex, you can’t sell it off to an owner-occupier. So, potentially less demand for when you sell it, effectively.
But we’ve done a lot of depreciations and a lot of particular ones, over time that as people seem to be quite happy with the returns over time. But you just have to be careful of a couple of little things that relate furnished student accommodation.
Kevin: At the outset, I mentioned there about that shortfall in supply over demand. Are there any other impacts on the property market when you look at that?
Brad: Supply in those areas mean that around a university, if there’s a lack of supply, it ends up taking up stock outside of rental stock that’s within a few suburbs of that university. It gets taken up by people and it affects the overall market. So, we have to build enough to house the students when we build a university, or we end up with more pressure on the rest that are around that.
I know even one of the properties I have that’s around there, for example, has an individual lock on every one of the single doors because it was an old four-bedroom house because they rent out those rooms individually to investors.
And what it does, is it just takes more properties out of the market so the other potential renters that were there, but it’s a typical supply-and-demand issue that we need to deal with. When we build a university, we have to build something to house the people, right?
Kevin: That’s right. Exactly. Hey, Brad, great talking to you, mate. Thank you for that insight. Brad Beer, of course, is the Chief Executive Officer of BMT Tax Depreciation. Thanks again, Brad.
Brad: Kevin, always a pleasure. Thank you.
Buying property in 1990 – Peter Koulizos
Kevin: Australia’s leading real estate investment advisory board has released analysis proving mortgages are more affordable now than they were in 1990. The Property Investment Professionals of Australia – otherwise known as PIPA – said those arguing properties lack of affordability haven’t studied the numbers properly. PIPA’s chairman, Peter Koulizos, joins me.
Peter, where did they get it wrong?
Peter: The big mistake people make is that they don’t look at the mortgage repayment component. There’s no doubt that housing in Australia is expensive and there are reasons for that. But when we’re talking about affordability, you must include the mortgage repayment, which is based on people’s capacity to hold onto a property.
Kevin: Refresh my memory for a moment. What was it like to fund a property back in 1990?
Peter: So, 1990 – if we cut to the chase – you needed 48% of the annual average salary to pay off the mortgage on the average loan size. But you fast-forward to today and it’s 41%. And the big difference is even though property prices have gone up markedly in that time, wages have gone up. The main reason it is more affordable today than it is was in 1990 is because interest rates have dropped from 17% to below 5%.
Kevin: So, how does Australia stack up with the rest of the world, Peter?
Peter: Well, we sit at the top end, and that’s mainly because we have the second-largest sized houses in the whole world. Most of us live in cities rather than rural areas, and city property is more expensive than rural property, and most of our cities are based around the coast, and coastal property is more expensive than property away from the coast. So, there are reasons for that.
But, I was in Hong Kong last week, and if we think housing is expensive here, that’s nothing compared to what people have to pay for smaller homes – and these are not houses; these are units and flats and apartments and possibly, on the 30th or 40th floor – and paying much than people in Sydney or Melbourne would pay.
And that’s the same case in parts of the U.S. and many parts of the U.K. So, we’re certainly not the least affordable country in the world; we are up there, but there are much more less affordable places in the world.
Kevin: I want to ask your opinion in just a moment about what we can do to make it more affordable. It’s great to compare the countries and look at others that aren’t as affordable, but we can always do a better job. But, let me ask you this question before we do that, Peter. And that is about the deposit.
Is it because of the deposit that many people struggle to get a start? Is that what holds them back?
Peter: Yes, and that’s a different component of the subject, which I call housing attainability – the ability for people to actually get into the property market to attain the house. And even though back in 1990… Or, let’s go back to when we bought out our first home in 1984. You needed a deposit of 25% of the purchase price, but today you only need 5% if you’re a home buyer. Even though there were first-home owner grants back then and there still are now, there is a big difference with them.
When we bought our first home – just over 30 years ago – the first-home owners grant was $5000. Now that may not sound much, but back then, Adelaide median house price was $50,000. So, the first-home owners grant was the equivalent to 10% of the purchase price, and on top of that, that was applicable to all homes, not just new homes.
Fast track to today, 2018, the first-home owners grant, I think one of the best first-home owners grants you can get is $15,000, but it only applies to new homes. And $15,000 for the median price in Adelaide – if just keep the example the same – is 3% of the purchase price. So, the missing link here is the first-home owner’s assistance.
Now, I’m not saying that the federal government needs to come in and start splashing out money. Because if you do that without thinking, all you’re going to do is increase property prices again. But the big difficulty today is that the first-home owners grant is not as generous as it has been in the past, but it only applies to new homes, and new homes are generally only at 2% of the property market.
Kevin: So, let me round this out, then. What do you think is the answer? How can we make it easier for people to get a home?
Peter: A lot of these solutions or part solutions have been implemented around the world, or even if we look in the past, we can see what’s happened. So again, when we got our loan just over 30 years ago, the loan period was 20 years but now it’s 30 years.
So, one way that you can make housing affordable is that you increase the loan period. Yes, you’ll pay more over the period of time, but there will be less of your wage that goes towards that mortgage repayment every month. That’s probably one of the big ones.
Yes, you can drop interest rates, but that’s a lot easier said than done.
Kevin: They’re not going to get much lower than what they are now, in reality, are they?
Peter: No, they’re not.
Peter: Well, interestingly Kevin, when I was in Hong Kong I did meet up with some German tourists, and the first-home buyers assistance in Germany is no deposit, no interest because they are trying to kick-start their economy.
Kevin: Wow. So, there are ways for us to do a better job, but it seems like an easy answer.
Peter: Yeah, well look. The reality is there is no doubt that housing in Australia is expensive, and that’s because of the income that we earn and the sort of houses that we want to live in, but there are things that people can do. Even go and get some professional property investment advice, so you at least get the right loan – the lowest interest rate with the best terms to make it more affordable to you.
Kevin: Well said. Peter Koulizos, thank you so much for your time. Peter is from PIPA, the Property Investment Professionals of Australia. We are supporters of that. We are also members of PIPA. You can join PIPA and get more great advice on investing in property just by using one of the buttons on the homepage here. Look for it, it’s right down the bottom. It’s under “PIPA.”
Good on you, Peter. Thanks for your time, mate, and we’ll talk to you again soon.
Peter: Thank you very much, Kevin. Pleasure.
40 most affordable areas – Simon Pressley
Kevin: One of the things that we love to look at is affordability. Most people are looking for housing affordability, and when we do that, it’s interesting; we look for affordable markets around Australia, and in doing this, we work very closely with companies like Propertyology who are one of our trusted advisors, one of Australia’s leading property analysts.
They did an exercise recently to look at the most affordable markets around Australia and came up with a list of 40, but there are some interesting indicators here. Simon Pressley joins me from Propertyology.
Good day, Simon.
Simon: Hi, Kevin.
Kevin: Some interesting indicators came out of this. We want to look at affordability, but then that then says “Well, hang on. Which of these affordable markets now could we actually make a profit out of in the years to come?” What were some of the things you found out?
Simon: We cast our eye across Australia’s 550 city councils, Kevin, and the two main metrics that we followed here is where there has been a significant shortening of the time that’s it’s taking for the typical property to sell, combined with the volume of properties increasing. Those two metrics are the pressure points, if you like, for property markets.
40 locations throughout Australia in total where there’s significant pressure building. That’s not to say that all these 40 locations are experiencing price growth. Now, some are, but what we’re saying is they are all heading in the direction of a growth cycle. There are 40 locations, and they’re in every state in Australia.
Kevin: Looking at days on market, is there a point in time when you say “Well, if it’s selling in 30 days, that’s a reasonably good market, if it’s selling in 60 days, that’s an average market, and 90 days is pretty slow”?
Simon: I would agree with those numbers. Generally speaking, when we’re getting around somewhere between, say, 30 and 45 days, generally speaking, that market is experiencing some price growth. The rate of growth, obviously, can vary. But not always.
Big parts of Brisbane, for example, Kevin, a typical property has been selling in that 30 to 45 days for five or six years now. But as we know, Brisbane has experienced some price growth but not enormous price growth.
Kevin: There are lots of things influence days on market, like the amount stock on the market, obviously, the number of buyers who want to buy into that market. But, it’s also interesting to look at the amount of stock in a marketplace. I’ve seen markets – particularly the Sunshine Coast as an example – where there has been enough stock on the market, that if nothing else was listed and the days on market didn’t change, it would take about two years to settle that stock. It’s a pretty depressed market.
Simon: That’s right. Stock on market is one factor that leads to pressures. If there’s not much there and there’s heaps of interest, obviously, again, you’re going to have a lot of pressure. But at the start of a growth cycle there can be markets that do have lots for sale but still an increasing number of buyers, and then over of the period of time, what you’ll see is not only more property selling but also taking a shorter period of time to bill.
But, you can also have locations – Hobart is a classic example at the moment, and other parts of Tasmania, for that matter – where the sales volumes are actually reducing but the market is roaring. And the reason the sales volumes are reducing is because there’s very little left.
We saw that happen in Sydney and Melbourne a couple of years back as well, where sales volumes were reducing, but that was certainly not to imply that the market was cooling.
Kevin: You mentioned Hobart there, Tasmania. I noticed that you in your release talk about the fastest selling area was Clarence in Tasmania. Tell me about why you chose that and what were the dynamics?
Simon: These were all chosen just purely from official statistics. So, Clarence is on the eastern shore of Hobart. It includes suburbs such as Howrah and Lindisfarne. Here and now today, the average time it takes to sell a property is ten days. So that’s literally you blink and miss it.
Now, that’s what the official data says. Our buyer’s agents will tell me “Simon, once it hits RealEstate.com, it’s probably already sold.” That’s indicative of what’s happening in that particular market at the moment.
But the actual sales volume is actually reducing, as I said, but that’s part of why there’s such strong price growth over there. There are lots and lots of people who want to buy but very few properties for sale.
Kevin: In the analysis, how many of the states actually were really tightening up on their sales times?
Simon: The only territory that didn’t mention was the ACT and of course, the ACT has only one city; that’s Canberra. That’s not a bad reflection of Canberra, though. It’s market pressure is fairly solid.
What we’re picking here are locations where the pressure is tightening further. Northern Territory had one, Alice Springs. Western Australia had four locations where pressure is tightening, and they were all in parts of regional WA, not so much Perth itself. South Australia had six. Queensland had five. New South Wales had the most, ten locations, and they were all outside the really big metropolitan areas. Tasmania seven, and Victoria seven. So, it’s literally spread right around the country.
Our motivation for sharing this data with the public, Kevin, is on the back of what we’re going to hear probably a lot more of for some time yet is Melbourne and Sydney consistently falling month after month. Not big falls, but it is dominating the media tabloids.
And the public need to be aware that’s two cities. This is a massive country, and large parts of Australia are actually showing signs of improvement, not regressing like Sydney and Melbourne have.
Kevin: It’s great to have this chat with you. Simon Pressley from Propertyology. Is there a report that we can get on this, Simon?
Simon: Yes, absolutely. Go to Propertyology.com.au, click on the “Insights” tab in the menu bar, and you’ll see all sorts of goodies and research reports there, including this one.
Kevin: Well, I have the list of 40 tightening markets. Too many to go through. But Simon great talking to you. Thank you so much.
Go to Propertyology.com.au, the “Insights” tab, and you’ll get that, along with a lot of other reports as well.
Simon, thanks for your time.
Simon: My pleasure. Talk next time.
Owner occupiers see opportunity – Siobhan Hayden
Kevin: Some good news: there has been a lift in the value of owner-occupied dwellings. It’s increased slightly month on month. Joining me to talk about this and the impact of that is Siobhan Hayden, who is the COO for HashChing.
Siobhan, not a real surprise here, but is it a reflection of maybe a drop-off in investor borrowing?
Siobhan: Yes, definitely. The first-home owner activity, we’ve been seeing a gradual increase, particularly in New South Wales and Victoria, since the changes to stamp duty provisions in July last year. And of course, the macroprudential measures to curb investment lending and interest-only features, etc. has seen that decline. So yes, we’re seeing a complementary balance point.
Kevin: Are we seeing a few people move away from the big four banks?
Siobhan: We’re definitely seeing that in HashChing, particularly off the back end of some of the press articles last year around some of the cultural points of banks’ behavior. I think people are realizing that their commitment to a particular brand as an individual is not really paying them dividends. What would you call it? Their bank loyalty doesn’t seem to pay any returns these days.
Kevin: We’re seeing a softening in house prices as well. It’s led to increased home loan activity for owner-occupiers and investors.
Siobhan: For first-home owners, absolutely. That’s what we’re seeing, definitely. We did a survey in February of 780 home loan repayers – 58% of them were first time owners – and found some different trends, particularly their concern around the value of homes and seeing that shift and change in New South Wales and Victoria, but also around the challenge of actually getting the loan and finding the right deal, which doesn’t surprise us. There’s so much on the Internet about property prices and deals, it’s all very confusing.
Kevin: Siobhan, just before we leave this topic, what did you learn about stress in your survey?
Siobhan: We identified that a large proportion of people are quite stressed currently, even though we have historically low interest rates, which is quite concerning. All economic indicators suggest that the cash rate won’t increase until probably early 2019. However, if people are already making sacrifices – which is what we found – to make sure that they can make their mortgage repayments, obviously any movement… We found that nearly 18%, even a $50 to $59 per week increase would be considered unaffordable.
Kevin: Wow, that’s very marginal, isn’t it?
Siobhan: It is.
Kevin: Is that a reflection on the banks not doing their due diligence and maybe protecting the borrower more?
Siobhan: We also found – which is obviously a normal correlation – the higher the interest rate currently being paid by a mortgage repayer, the more likely they are to obviously be contributing more of their income, which makes perfect sense. But we also found it’s very common for male applicants to take a secondary income stream through the shared economy – like Uber driving or such things or Airbnb – to income to complement their income to pay their mortgage.
Kevin: Nothing wrong with that, but nothing worse than having to be in a situation where you have to do that. What would be your advice to borrowers in terms of trying to anticipate what they may be able to afford in the future?
Siobhan: I think it’s interesting that people aren’t across the current rate and aren’t passionate about making sure that they have a competitive rate. If you have a loan for a long period of time – 25 or 30 years – there’s no point paying 1% interest higher than you need to be for that period. That’s a huge cost to you as a family.
So, making sure that you know where you’re at… Whether you need to change is another story, but knowing your position is absolutely paramount.
Kevin: Yes. With things like comparison rates, that’s fairly easy. It used to be really complicated and difficult to make that change, but that’s no longer the case, is it?
Siobhan: It’s not. Whether you would think to go into your local branch or whether you think to talk to a mortgage broker – which nearly 60% of consumers do today – everyone tends to start on the Internet, and I think that that’s where things get very confusing.
There’s lots of information, it’s not always clear, some rates are discounted, some rates are not, some are introducer models – which do little to no inquiry into your financial position – so consumers are a bit overwhelmed, I think, and our survey definitely found that they find the paperwork particularly very challenging, and finding the right deal extraordinary challenging.
Kevin: Almost threatening to think that you’re going to change your bank, because people still have a fear of banks, don’t they? That they wield this big stick, and “I just don’t want to upset my bank.”
Siobhan: Definitely. We’ve had customers through HashChing particularly who have gone to their bank, asked to have their loan reviewed and their interest rate reconsidered, particularly when they see advertising from their own bank for new loans at a cheaper rate – which is obviously very confusing for consumers – and they’ve not been able to get any joy from that experience.
So, definitely having a partner working with you that is across multiple lenders is definitely the way to go, and that’s obviously the mortgage broking proposition.
Kevin: I know this is probably a rhetorical question, but in the event that you were to go to a broker and you did have your best deal, you’d hope that your broker would tell you that’s the case.
Siobhan: Definitely. And the broker has to work in the best interests of their client. There’s a lot of understood work to get a loan. You do have to put your financial position together. No one wants to go through that process if they’re not going to get a better outcome at the end of the day.
So, understanding that there are a number of points of information – your income, your expenses – all of those things need to be considered and reviewed, and then you can be provided with a more accurate view of what interest rate is possible.
Kevin: If you’ve been fired up and you want to have a look into this, the best place to go is HashChing, and you’ll get all the details there.
Siobhan Hayden from HashChing. Thanks for your time, Siobhan.
Siobhan: No worries. Have a great day.
The Mentor steps in – Stephanie Wimpenny
Kevin: I wonder if you’ve been following The Mentor with Mark Bouris. It’s only just started on Channel 7. The very first episode when it aired talked about a real estate agency on the north side of Brisbane, and in the promos, Mark Bouris suggested that it may just be the worst real estate agency in Australia.
My guest now is one of the owners of what was then known as Ubiquitous Realty on Deception Bay. It now has a brand new name and a brand new image. Stephanie Wimpenny joins me.
Good day, Stephanie. How are you doing?
Stephanie: Hi. I’m really well, thank you. How are you?
Kevin: Great, thank you. There must have been a bit of hurt involved in all of this, because it’s the family business. Let’s describe it. The business is yourself, your brother, and your mother and your father. There would have been a lot of pride in that name Ubiquitous Realty as well. How did the original name come about?
Stephanie: It actually took us months to come up with our name and our logo. I think most young businesses actually go through a very similar thing, because you’re trying to be clever, you’re trying to be different and say something about who you are. For us, it took a really long time. But I ended up watching – I think it was – Sunrise one morning, and one of the news presenters used the word “ubiquitous,” and I thought, “Oh, that’s an interesting name. That sounds pretty unique.”
I had no idea what the word “ubiquitous” meant, so I just Googled it and found out it meant “found everywhere and to be omnipresent,” and I thought, “You know what? That’s actually not a bad name for real estate.”
So, I asked mom who’s the principal licensee what she thought of the name. She said she liked it, and away we went.
Kevin: Just the mere fact that you had to look it up, that you didn’t know what it meant, surely there should have been alarm bells going off then.
Stephanie: Yes, you’d think so. But what we liked was that it became a really good conversation starter in our business because people didn’t really know what it meant. You’d occasionally get the odd person who did know, but because people didn’t know what it meant, they asked us “Did you make that name up? Or what does it mean?” And so, it was a really nice way to break the ice with people.
Kevin: Tell me, how did you feel when you first saw the promo where he called you potentially the worst real estate agents in Australia?
Stephanie: I just knew that that was a bit rubbish, because we’re definitely not the worst real estate agents in Australia.
Kevin: No, of course not.
Stephanie: But I thought, “You know what? If that’s what they need to do to promote the show, then okay.” There’s nothing you can do about it. Once it’s already out there, you can’t really change it. So, there’s no point in whinging about it; you just continue on.
Kevin: It’s a great way to look at it, Stephanie. Congratulations on that. And tell me, when it first happened, did you get a lot of local support? Did they rally around you?
Stephanie: We had so many of our clients, our friends, and our family, even agents from the local community telling us that that was all rubbish and that they were very hurt for us and they can’t believe that someone can get out there and label us the worst real estate agents in Australia so unfairly like that when we’re not like that.
We have clients who love us and who become lifelong friends with us. If you were the worst real estate agents in Australia, I guarantee you, you would not have clients like that.
Kevin: It doesn’t really matter what your name is; at the end of the day it’s the service you give and how you operate as a business, of course.
Stephanie: That’s right.
Kevin: But the name does help. There’s a positive turn to all this. It was obviously a very worthwhile experience because you went through a name change, and you’re now known as Morton Bay Realty. Was Mark Bouris behind that change? And did you resist it?
Stephanie: I did resist it a little bit, because obviously, for us, being a family business, our name is our identity. It’s who we’ve chosen to be. So, when someone challenges your entire identity, it can hurt a bit.
So, I did challenge him a little bit on it, and I said to him… Because his biggest argument was no one knows what it is and they can’t search it, so it’s a rubbish name. I think his word actually was “crap.”
I just said to him, “Well, what was Apple before Apple was something? What was Google?” And I even said to him “What was Wizard and Yellow Brick Road?” I said “You made your name something. It’s what your brand stands for.”
So, that was the kind of theory that we had with the name, that we would create our own meaning to it.
Kevin: Just remembering, I think you had some fairly grandiose targets for the business when you first opened, and in that first year of operation, if my memory serves me correctly, you made 10 sales. Is that right?
Stephanie: Good question. I think it was 12.
Kevin: 10 to 12 sales –obviously below what you wanted. How has it been since The Mentor program? How has your business progressed?
Stephanie: It’s progressing really well. We’re working a lot better as a team, and I think that for me was the most important thing about it. I really did struggle in the beginning without having a leader in the business, a strong leader.
So, for me, it’s really lovely to have mom stepping into that leadership position and telling us what to do, because I needed that. I needed someone to rope me in every now and then, because I don’t know everything. I’m still new to a completely different industry to the one that I was in before.
Kevin: One of the things we found out about real estate is that it’s the young, enthusiastic operators like yourself who are pushing us to all new levels. I think your mom was the only experienced real estate agent in the business. Is that correct?
Kevin: You’ve now gathered experience, you now have a lot more knowledge about it. Do you see the business growing from being a family business to being anything bigger? Will you put more people on?
Stephanie: I think down the track, we would look at doing something like that, maybe bringing a property management wing into the business as well. But at this stage, we just want to focus on sales, we want to focus on making sure that we got one thing right at a time. But I think in the future, we would like to be bringing on employees.
Kevin: Now, part of the journey with Mark Bouris was where you obviously came into contact with Matt Lancashire from Ray White New Farm, who is a great agent. We’ve interviewed him on a number of occasions. I believe he’s working with you or you’re working with him now.
Is that the follow-up plan?
Stephanie: Yes. Matt has been absolutely amazing for us, and he just basically said to us, “Come along to any of the trainings that we do at Ray White.” So, now every Monday, we drive for about an hour in the traffic to get down to Ray White at New Farm to do some training routine, which has just been absolutely amazing.
For me, I just love being around a team of highly motivated, high performing agents. And just to be in that sort of environment is to me absolutely amazing. I just love it.
Kevin: When you originally decided to open the business, you wanted to set it up as an independent brand, you remain as an independent brand. Was there ever a thought that you’d probably go with a group like Ray White?
Stephanie: No. And that did come from Sharon, mom, because she has worked for so many of the larger agencies before. She and us as a collective whole, we didn’t want to be bound to any brand and their structure and their systems and their processes.
Not that there’s anything wrong with them; it’s just that we really wanted to challenge the status quo of real estate a little bit and change people’s perceptions of what is actually possible for a real estate agent and an agency.
So, we wanted to up levels of customer service and just do it our own way. I think we’re fiercely independent.
Kevin: You look at businesses like Matt’s for example, Ray White New Farm, that’s a highly successful business, they do have great systems in place.
Kevin: They offer, obviously, really good service, otherwise they wouldn’t be as successful as they are. So surely, it doesn’t come down to just the brand. When you get into a brand like a Ray White or a Raine & Horne or an LJ Hooker, they actually come with the system.
So, what’s so wrong with that? Why wouldn’t you go with that?
Stephanie: I think it’s just that where there are things that mom didn’t necessarily agree with, you can’t really change it because it’s such a big, heavy machine to sort of turn around and get change in. I think that’s what her theory is.
And because mom and dad have owned businesses all their lives and they’ve always been their own businesses, I think it just comes down to that sense of ownership more so than anything else, like you being in complete control and you being completely and totally responsible for your business and how it works.
Kevin: Okay, so where to from here? Just more of the same, the business is growing?
Stephanie: Yes. We’ll continue to train with Matt for as long as he’ll have us. And yes, the business is growing, so we’re bringing on new listings at the moment, which is very exciting. We have properties about to settle as well, so yes, we’re moving onwards and upwards.
I think in real estate, though, the biggest thing is that it is a long game. So, you can’t just come into a business and rebrand it and call it something, and then all of a sudden, have an influx of clients lining up and wanting to work with you. It doesn’t work like that.
As you said before, it’s not about a name; it’s about a reputation, it’s about building trust, and it’s about building a relationship with people. So, for us, the biggest thing that we’re working on is trying to build that trust and relationship with our local community.
Kevin: Before I let you go, Stephanie, would you do it again?
Stephanie: Definitely. In a heartbeat.
Kevin: It was worthwhile?
Kevin: How was Mark as a mentor?
Stephanie: He was a bit strong, I guess, but we needed that. You need tough love. That’s why you have mentors. You need people who are not afraid to turn around and say “Look, this is what’s wrong.” So, I quite enjoy that.
I’ve always liked criticism and feedback, because I think it’s the only way that you can genuinely improve. So, yes, I have a great deal of respect for Mark. I think he’s firm when he needs to be.
Kevin: Great talking to you, Stephanie. I appreciate you giving us your time and being so honest, as you were in that episode with Mark Bouris as well, The Mentor. Thank you. Every success in your journey, and I want to thank Matt Lancashire too, who’s been very instrumental in helping us put this together. Matt Lancashire, of course, from Ray White New Farm.
I’ve been talking to Stephanie Wimpenny, who is from what’s now know as Morton Bay Realty, appeared in the first episode of The Mentor with Mark Bouris when they were then known as Ubiquitous Realty in Deception Bay on Brisbane’s north side.
Stephanie, thank you so much for your time, and all the success. I want to maybe catch up with you in another year’s time and see how you’re progressing.
Stephanie: That would be amazing. Thank you so much, Kevin.