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James sits down with Tiger Malan from Ray White Broadbeach to talk about current market trends, property innovations, issues acquiring finance and much more.
In this interview James and Tiger chat about:
- The role of a business development manager
- The Gold Coast rental market hot spots and vacancy rates
- The up and coming Gold Coast suburbs
- Challenges acquiring finance
- The state of the property industry nationally
- Innovations in the property industry
- Permanent renting vs Air Bnb
- Key factors to keep in mind when selling and buying property
- Plus so much more!
Read on below for the full transcription of our interview:
– G’day everybody, James from mrkts.com.au here, and today it is our privilege to talk with a Mr Tiger Malan. He is the Director of Business Development at Ray White Broadbeach, Broadbeach Waters and Mermaid Waters. Tiger’s been an active member of the industry for the past 10 years, experienced in all aspects of the real estate business and achieving the mantle of premier level agent in a very short time. Along with a bachelor degree in property development and real estate, Tiger has also achieved his MBA. So a very well rounded individual. Thank you very much for your time, Tiger, and thanks for coming to talk to us.
– Thanks for having me.
– So, we like to do, even though I’ve stolen a bit of your thunder, it’s better to hear from you a little bit about yourself. Give us your CV in under about a minute.
– Sure, that was a better speech than I could give I think. But okay, so, in short, I started as a PA. Moved into leasing consultant for a rent role. I then became a BDO. I then became, or moved from BDO into sales. From sales I went back to university, did my MBA, and then when I came back, came back as a director for three of the businesses we have in the Gold Coast.
– Okay.
– BDO, so business development manager.
– Okay understood. So then, as a role, can you explain that for some people may not be aware of what that is. What is your role then specifically?
– Okay, so a business development manager, essentially, is the sales arm of a rent roll. So when a company, almost all of the good real estate companies also manage a certain amount of property, the BDM is the person who goes and sells that to the market.
– Okay, understood. So the rent role, also for people at home, is a list of landlords and then people that are tenanting those listings. Or what is a rent roll?
– So the properties that that businesses manages.
– Okay, excellent. So you package it up and you keep an eye on the market place, and then you try and do your best for the landlord.
– That’s about right.
– Excellent. Rental specific, if we try and drill down to the Gold Coast market. What are you noticing in the rentals in terms of, what are a couple of the hot spots?
– There seems to be a bit of a shift south. So what was traditionally the central suburbs, as in Surfers Paradise and a little bit behind it. The shine has come off that a little bit and more of the attention seems to be along the light rail path. So the southern suburbs, Burleigh, Palm Beach, any of the lifestyle suburbs, seem to be getting a lot more attention, but that’s actually shifted both ways. So there seems to be a southern shift, and a northern shift. Two separate different markets are now emerging, as the Gold Coast gets a little bit bigger. Our focus is central and southern, so I won’t talk much about north,
– Okay.
– I don’t know enough about it.
– Okay.
– But the southern stuff and the central is definitely starting to hum.
– Okay, and what kind of vacancy rates are you experiencing?
– That’s an interesting one. I had a look at that just before we came here.
– Oh good man.
– Our businesses manage,
– Well researched.
– we manage just over about 1200 rental properties, and out of our rental properties, our vacancy rate is just under 1%.
– That’s fantastic.
– Yep.
– Okay, so, vacancy, I was having this conversation with Tracy in the office before. Vacancy rates are, essentially, the percentage of properties on the market that are vacant, versus ones that are occupied. So an occupancy rate is something you’d talk about in the short-term, I assume.
– Correct.
– And then the vacancy rates are beneficial to people who wanna know if that suburb got room to move or can I put people, is there a high demand for that suburb.
– Sure.
– Would that be correct?
– Are you essentially gonna get a few tenants to compete for your property, that’ll result in a better rental.
– Okay.
– And better people.
– So it’s a statistic for competition. Okay, excellent. And so up and coming then. I assume, if we’re looking at up and coming areas, would you then probably start to direct people south.
– I would.
– From a landlord perspective. So if they’re looking to purchase property, and investment is their focus, you’d say okay, this is what we’re seeing.
– They tend to mimic the sales. So renters will follow lifestyle suburbs. So you look at the same metrics in terms of whether property’s increasing in value, and that tends to be matched into the rental market. So if you look at your days on market price increases, very similar, that’ll flow through into tenancies. It’s normally the suburbs that people want to live in. On the Gold Coast, that’s pretty obvious. You wanna be near the beach.
– Yeah, correct. You’re here for a reason, normally.
– That’s it.
– And are there people coming, have you heard from your agents if there are people that are coming up that are from Sydney and from Melbourne, that are out of town, that are resettling here on the coast and renting.
– Absolutely. Yeah, that’s always a big part of our market. So we’ve seen, probably, the biggest amount of domestic migration. So all of the big cities coming to the Gold Coast. Who knows the reasons for that, I’m not an economist so I won’t delve into that, but we’re definitely seeing a lot of it. And they tend to move to the beach side suburbs.
– Okay.
– So we get a half and half. So what you do, what we’re seeing a lot of, is people moving here for three or six months, to take a rental, to decide where they want to live on the Gold Coast, and then they’ll purchase a house or build a house in the suburb that they choose.
– So they’re settling in. They’re getting their feel for it. They ride their bicycle up and down the coastline and then they go okay, this is where I wanna be.
– Just deciding what they like.
– Excellent. Okay, well lifestyle is what’s key here, so. I was thinking, the state of the market, from a sales perspective, I know that you’re not specializing in that side, but you’re obviously involved in the entirety of the business. So what are you hearing from a hotspot point of view, for people purchasing at the moment.
– It tends to match the rental stuff, as I’ve mentioned. So we’ve got a few hotspots, I think, forming south. A lot of buzz around Burleigh and Palm Beach at the moment. It seems to be ahead of the light rail.
– Interesting.
– Well that’s what all the talk is about at the moment.
– Yeah.
– There seems to still be good value south. Whether it stays good value, as everyone jumps on the bandwagon so to speak, that’ll be interesting.
– Yeah, I’m gonna try and catch Tiger out ’cause I know that he does a couple of small renovations, as well, in his life, because he’s not busy enough obviously. But we’ll touch on that a little bit later, but I thought I’d just throw a warning shot now so he knows, and then we might touch on that because we’re giving, as you know, we’re doing a rejuvenation on our motel on the highway there.
– I know, yeah.
– And we’re doing videos, and keeping people up to date on what type of work’s being done.
– Sounds good.
– So it’s good to get another opinion on if renovation’s the idea, but we’ll get into that after. So finance.
– Yes.
– Sort of the blood of what we do. It’s what keeps people alive and if they can buy things or they can’t. Have you noticed, is it a challenge at the moment or is it getting simpler for people to acquire finance to purchase?
– It’s a challenge.
– Okay.
– So our business, obviously, well the three businesses, we trade a lot of property. We had, over the Christmas period, the biggest amount of finance follows we’ve ever had.
– Wow. Okay. Causes, what do you think?
– Banking regulations.
– Okay.
– Simple as that. I mean, obviously, from a ground level, we don’t get too much in depth insight into why these things are happening. But we see the flow down effects. So, I mean, all we can really say is do your homework at the front. So rather than going and buying a property you think you can afford, make sure you can afford it before you go do the shopping.
– Yeah.
– Simple as that.
– And then that leaves everybody not disappointed.
– Makes it a much simpler process. If you can get pre-approved for finance, you can negotiate better, you can pick what you want, you know that the contracts are gonna go through. It’s better for everyone.
– Fantastic advice. So then, that would, I assume, lean on the industry nationally, and I know that at Ray White, you guys have access to a huge amount of research across the nation.
– Sure.
– Not just in specific areas that you’re working in. So is that same report card being given across the other capitals?
– Yeah, from everyone we’ve been talking to it is. I mean obviously we like to focus on our market particularly. I think the Gold Coast is diverting a little bit from Australia as a whole. Right, I mean we’re quickly becoming our own market. So what we do is separate to everyone else. But we’re definitely hearing from all the other agents that we talk to, that that is pressure on the market and I think downward pressure on prices too.
– But would that be, then, if we try and forward think and put our thinking caps on. People down south are finding it difficult to purchase, even at those price points, then maybe they’ll be coming up here. So the sooner you get in on an area like the Gold Coast, which is technically regional, that’s going to move into a major city, I think, very very soon, if not we already are,
– In the process, I think.
– the sixth largest. That would probably be a word of advice maybe that,
– Sure.
– then keep an eye on areas like this that are up and coming.
– I mean, obviously we’ve got a vested interest in that, right, so.
– Correct.
– In short, I believe that’s a good choice. I think people should be buying property here ’cause I do think we’re in for a boom. I think Queensland and the Gold Coast and a lot of the infrastructure spending that the government is doing here, locally, is gonna make a huge difference. As we transition from a quiet regional town into a hub, property prices rise.
– Yes.
– Simple as that.
– Yeah.
– So we’re lucky enough to now have a mix of lifestyle and business. So you can make your money and live here while you do it.
– Yeah. And when you say infrastructure, it’s a very good point. I’ve heard 43 billion, roughly, from state funds, is coming into infrastructure in Queensland. We’re gonna get about 13 of that, is my understanding.
– Sounds good.
– So.
– A few the highways, yeah.
– The more we get the better I think,
– Exactly.
– and try and free up a little bit of the congestion but our congestion compared to congestion elsewhere is a completely different conversation.
– Not too bad.
– Correct. So, then, the innovation side of the industry.
– Sure.
– We see, I know online, we’ve even been considered, at mrkts, something as an innovator, but I wouldn’t go that far. We’re just an educator. What are you seeing in there that’s impacting on your business? Are there innovations that are making a difference for landlords? Are they making a difference for yourselves as operators?
– Sure. I think real estate, as a whole, is actually quite slow on the uptake, in terms of innovation. Most of the people operating at a good level are quite entrenched in the way that they do business. So we’re seeing a lot of the younger guys, the younger agents come through, with all the good ideas. Most of the innovation is digital, as with most of the businesses. I would say you guys are innovators in terms of how you’re educating your market. So that’s really the biggest transition. We’re seeing some of the agents change how they market themselves to the public. Rather than being the protectors of information, they’re becoming the people who give the information out. The people who educate their market the best become the trusted face, and the trusted face are the people getting the business.
– Okay.
– So it’s about transparency. It changes, I think it’s changing how people perceive our role in the market.
– That’s a very good point. I think that that is now across all industries.
– Yeah.
– And people aren’t being able to escape that. So keeping those secrets are not necessarily the game anymore.
– I would agree.
– Now real estate, how many agents are there on the coast. I assume there’s thousands.
– I wouldn’t know off the top of my head. Yeah thousands, thousands.
– So there’s a lot of them and, essentially, those newer ones that are coming in, you’re noticing that they’re getting these fresher ideas. Does that mean that people should aim for a younger agent or is it more they should just speak to more than one and get a good feel?
– If they were selling?
– Selling, correct.
– So what I would do, if I was selling, and, I mean, I have sold before, so this is what I’ve done. In the area that I sell my property, there’s always a few agents who are operating the best in that industry. Right, like every suburb is almost its own section. So find someone who is in that suburb writing, or selling, lots of product like yours, and then interview all of those. You’ll find one that you click with. That person, the person that you can have open and clear communication with, use them.
– Beautiful. That is succinct and very good advice. So then. I just wanted to touch on, then, Airbnb. Seeing as you’re in the rental side of the business, and we were talking about innovation, this would somewhat tie in. So the rise of Airbnb and those kinds of platforms, what’s you’re perspective on those.
– Sure. I probably should’ve touched on this actually. It’s kind of an obvious one with innovation.
– That’s okay.
– So, out of our business we’ve actually started a portion of our rent roll that is strictly Airbnb.
– Yeah.
– So we’ve got a holiday let management company within our business. Which I head up as well. With the rise of those platforms we’re seeing a change of yields. There’s an opportunity in that most of the market have not come to terms with the fact that you can actually increase your yield for your property. Not all properties but some properties. Savvy investors who do their homework well at the start, can buy something that yields more money than it should. Or it has in the past. So there’s opportunity.
– Yeah. So location would be one of the key–
– Location, right. I mean, location for real estate’s always an obvious one. Airbnb is enforced by council, right, so there are a lot of rules around what you can and can’t do, according to council.
– Okay, what can you do–
– So do your homework into that.
– Okay, okay.
– Sure.
– Where would they find that kind of information?
– Town planner, or from council directly.
– Okay.
– What you’ll find is there’s certain suburbs that council have approved this to happen. If you’re in those suburbs and operating in those suburbs, you’ll be fine. In some of the other suburbs, council are actively trying to discourage it.
– Okay.
– Right. You don’t want party houses in the middle of the suburbs.
– Correct, I agree.
– Which I understand.
– Yep, yep, yep.
– So to purchase a property for Airbnb specific, do your homework first.
– Great.
– Make sure council will approve it.
– Yeah, okay. And then what about a mixture. Are there landlords out there that would think, okay, I’d like a permanent tenant ’cause I want the security, but then I want those booster deals. Can we work with the tenant to maybe do a half and half? Have you found, are tenants ever eager to do things like that?
– Yeah, so, I mean tenants always are but that gets complicated, right, around subletting, the clauses around the contracts that you have to have with those people. So we are dabbling a little bit with owners, currently, where we do a bit of a half and half. So half permanent in the quiet months, half holiday in the summer months. We’ve actually had some pretty good, some success with that, to be honest. But we’re still playing around with what months are best to do what. Obviously you have low shoulders and high seasons. Summer on the Gold Coast is very busy and you can make a lot of money. Winter can be completely dead. So you’ve just gotta find your middle ground with that. Some properties, absolutely appropriate just for Airbnb. We’ve had quite a few owners that have drastically improved their returns just from that. Some properties are just permanent appropriate. So.
– So. When doing your numbers, make sure that you factor in the additional costs. So you get a higher return if you’re doing holiday but there are additional costs. So you have to weigh that up. And then it’s sort of a set and forget with permanent, sometimes, but then if the property comes into disrepair there are obvious landlord responsibilities and things like that, and your agent is the best person to assist you with that. That’s fantastic advice. Talking about the innovation side, still, and touching on the Airbnb, what are the hotspots that you’ve noticed for people, say they’re starting to do their research. Where would you point the finger for them to start at the moment?
– So beach side suburbs directly. In our experience, so what we will manage now, from a holiday perspective, is beach side suburbs from Surfers Paradise down to Palm Beach.
– Okay. Interesting. So starting in the center, move down south into Palm Beach, and that’s for people to then get from the airport, that’s not that far.
– Correct.
– If you need to go further north then it’s starting to get a bit more complicated. It’s more cost. But just to get on the Gold Coast highway and head up. It’s pretty simple.
– Super simple, yeah.
– Excellent. So let’s talk about key factors then for members to think about.
– Sure.
– Sort of, we like to stick it to three. If you’ve got three, use three. If you’ve got more, that would be ideal. But what are the key factors members should keep in mind when approaching the purchase of a new home.
– Okay. So I have done a little bit of house flipping, all right, so this is pretty close to home. So there’s three things that I think you should always consider, when purchasing a house. The first one is timing. Obviously timing in the market. If you buy at the peak it’s gonna hurt later. If you buy at the trough, you’re gonna make money. Super simple. To do that, it also flows into the second point, right, and that’s to be emotionless. So make your decisions at the start, exactly what you think you want, in which price point, in which suburb, and then go shopping, but don’t change from that because you like the color scheme, you like the furniture, you like the neighbors. We see that quite a lot and it’s something that, as sales agents, we’d leverage, to get the most price out of buyers. Yeah.
– Interesting.
– The third point, then, is to be prepared. Do your homework. Look at the suburb, look at the stats. Know exactly why you’re trying to buy what you’re trying to buy. That’ll make it easier to stick to that when you go and do it.
– And then that will also assist you with the no emotion because you can build that list of what you want, what you don’t want, and it’ll hopefully help with your timing, so you can pick where the market is and where it isn’t.
– Exactly.
– It’s not a quick return game though is it.
– No it’s not.
– Specifically ’cause of that timing side of things.
– That’s right. I mean, property is the long-term play. So there are some people who can play in terms of the renovations and the flipping. But that’s quite a complicated game. Most people that we deal with are creating wealth through long-term property investing.
– Right.
– Length in the market. Time in the market is what makes money.
– Yeah. Very good advice. So then what would be the key factors for members if they want to then sell their home.
– Sure. Okay, so two of those are actually the same. Obviously timing is important, right.
– Naturally.
– So selling at the peak of the market can make a huge difference. I have done both, actually. I’ve sold a house at the peak and I’ve sold a house at the trough. The peak is much more fun.
– I can imagine.
– Emotionless, same thing, right. What do you think other buyers will like or not like about your home, and then try and mitigate those things. What’s not nice about your house? Find those things, try and fix them if you can. The third one that plays into that quite well, is presentation. Do everything you can to make it look its best.
– Okay.
– Obviously you might be working to a budget, that’s fine. That doesn’t mean it can’t be clean and tidy when you do it.
– So, and then, even spending that little bit extra might get you that additional purchase price dollar or figure that you want.
– Within reason, yeah.
– Of course.
– With that, you can spend money in the wrong areas, so talk to your agent. Get some advice around that. There’s always a few little things that you can do that can make a big difference, and there’s always a few things that you can spend money that won’t generate the return that you need. But don’t be scared to have that conversation with the agent at the time of listing, or even throughout the process. At any given week, there’s a new person walking through your open house. So if you’re getting feedback on the first week that someone doesn’t like this or doesn’t like that, and it’s fixable, just keep improving as you go through the process.
– Okay, that’s fantastic. Now if you’re looking at days on market and you’re going to sell your property, I think that there’s normally a correlation between the numbers of days that’s spent on market and the price in which the owner wants to get. I think this touches on the emotion side.
– Yes.
– So by saying no emotion, it’s understandable that maybe the kids have grown up there in the house and that’s where you fell over and you’ve got that memory or that’s where your grandmother came and visited and you’ve got that memory.
– Sure.
– Sometimes you have to try and put those to the side and then assess the market place. Would that be a fair thing to do, because you’re not gonna get another person with the same sentiment that you have.
– Exactly right. So, I mean, that’s the advice we can try and impart. Obviously that’s hard to put those emotions aside, right, but it’s something you’ve gotta do if you really want the maximum price.
– Yeah. And that’s the goal.
– That’s the goal.
– Fantastic! What would be a couple of lessons that you’ve learned? If we can try and get three, what would be key lessons you’ve learned in the flipping side of the game, and what people should probably be aware of, when they get started.
– So the first one’s probably it’s not as easy as it seems. All right. Everything’s easy until you start.
– Yeah.
– So never underestimate the costs of the renovation. Always put in a contingency. There’s always something you didn’t factor in that you have to change. The second point would be there’s a few easy things to do that have the most effect. For example, you’ll be amazed what a lick of paint can do to a property, right. It’s the smallest thing to change and can make some of the biggest difference.
– So identify those little changes if you can and then speak to someone who knows what they’re talking about.
– Go and have a look at a property in your market that’s better than yours, right. So find a house that’s beautifully renovated or find something that’s just down the road from you, that looks really good, and then see if you can copy it.
– That’s great. Yeah. That’s really good advice. No one said that before.
– Just do your research. Don’t reinvent the wheel, right. There’s always something better out there. If you can mimic that cheaper you’ll make money.
– That’s wonderful. Thank you very much Tiger. It’s been an absolute pleasure talking to you. If you have any questions, please make sure you comment on the video below. In the group there’ll be a whole lot of conversation about this hopefully, and please look up Tiger if you have any needs for things that are specific to what he’s discussed. Thank you very much for your time and we hope to talk to you soon, and Tiger,
– Thank you.
– we will hopefully talk to you very soon.
– Cheers.
– Thanks mate.
– Thanks.
