While it has been widely speculated that rent bidding, if implemented, would negatively affect tenants, an agency says it’s landlords who will be worse off.
Research by property agency National Property Buyers shows there is no incentive for property managers to roll out rental bidding as this would have a negative impact on the residential rental market.
The research showed rent bidding apps will result in more work for property owners, prompting them to personally manage their investment properties.
For example, using rent bidding apps will mean landlords will be required to upload property details, organise and attend open house inspection, and assess applications, putting themselves in constant communication with potential tenants to field questions, as well as rejecting unsuccessful applicants. According to National Property Buyers, “many landlords would not feel comfortable with [rejecting applicants]”.
National Property Buyers senior advocate Robert Di Vita said all this is too much for a property owner to do.
“I’ve purchased properties in the west of Melbourne for clients who reside in the east. I can’t imagine they would want to drive across town to open their property for an inspection, on top of reviewing applications for the property. That’s what they hire a good property manager to do” Mr Di Vita said.
National Property Buyers’ research also revealed property owners using rent bidding apps will not have access to support and expertise when dealing with tenancy issues. In extreme cases, National Property Buyers predicted property owners will have to represent themselves in front of an administrative tribunal, which “very few property owners would have the time or knowledge on how to prepare themselves for this process”.
National Property Buyers senior property manager Ivonne Di Perna said she could not see the positives of using a rent bidding app outweighing the utility of a property manager.
“For all the work that would be involved to get the property tenanted, let alone having no experience in dealing with serious tenancy issues, I don’t know why you wouldn’t use a property manager and have that peace of mind they’re being looked after, otherwise there is a high risk things can go wrong,” Ms Di Perna said.
“They really have to ask what their time is worth.”
National Property Buyers’ research also revealed that relying on these apps can reduce an investor’s ability to deduct expenses from their property.
One app costs $14 per month to manage their property, which Mr Di Vita said results in less opportunities to make deductions.
“Investors can obviously make more deductions going through a professional property manager. An investor might save a small amount of money in management costs but they miss out on deducting all of those expenses and having an expert on their side who knows all of the state based property management legislation,” he said.