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Thursday, April 15, 2021

Why Canberra money coach Serina Bird rents out her investment below market value

Writer and money coach Serina Bird – aka ‘The Joyful Frugalista’ – has been a landlord for over 15 years and, until this year, always found tenants for her investment properties via a mainstream real estate agency.

In January, Ms Bird and her husband, Neil, took the opportunity to make a change by leasing one of their houses for 75% of its rental market value.

The local couple switched to YWCA’s Rentwell property management service, which provides affordable housing for people and families priced out of Canberra’s mainstream rental market.

Rentwell prioritises allocating homes to older women at risk of homelessness and women with children, but men and families in need are also eligible to participate.  

Ms Bird learned that an older woman escaping domestic violence moved into their property a matter of days after it became available, which she said was particularly meaningful to her as a domestic violence survivor.

“It’s beautiful,” she said.

Financial resilience is a key focus of Ms Bird’s work in the media; she’s passionate about helping women achieve a level of security that would allow them to quickly escape a dangerous situation at home, if required.

“I talk about this problem a lot, and it feels good to do something about it as well.”

She believes private landlords have been filling the gap created by a lack of government investment in affordable housing for years.

“I’m actually proud to be a landlord, because I know I do provide housing to people who need it. I don’t feel like I’m ripping off any of my tenants.”

Building an investment portfolio wasn’t an easy road, and Ms Bird doesn’t match the ‘wealthy landlord’ trope – she and her previous husband hosted homestay students for six years to make ends meet.

“You know, private landlords, they’re usually average people, average mum and dads.

“Other people from work would be TGIF – out for drinks on a Friday night – and we’d be hotfooting it home to cook for the students.

“We didn’t have much of a social life for about six years.”

A money coach crunches the numbers

Now Ms Bird has achieved the financial resilience she wishes for others and, for the time being, her family is sacrificing income by leasing through Rentwell.

Property management fees are less expensive with Rentwell, the rent is guaranteed by YWCA, and landlords signed up for the program are eligible for a land tax exemption through the ACT Revenue Office.

Once those factors are accounted for, Ms Bird would earn about 10% more leasing in the private market.

But she is confident Rentwell will be better value in the long run, because the difference between what she would be earning with a private lease and what she earns via Rentwell can be claimed as a tax-deductible gift to YWCA.

Although Ms Bird isn’t eligible for a sizeable tax deduction yet, she plans to be.

“I’ve recently left work to be in the start-up for writing and podcasting and a few other things, so I’m not currently earning enough to be at the high tax bracket.

“But you know, it could be a year or two and hopefully I will be!”

Demand for affordable housing far outweighs Rentwell supply

Rentwell manages 40 houses across Canberra, all of which are currently leased, and YWCA CEO Frances Crimmins hopes to double that number by July.  

“Our goal for the end of the 2020-21 financial year is to have 80 properties,” she said.

Although this will require significant effort in the coming months, the Rentwell team is optimistic about meeting its goal.

Newly listed Rentwell properties are tenanted within 48 hours of having an open home.

Ms Crimmins said the need for affordable housing became even more apparent during the COVID-19 crisis, due to rising unemployment and underemployment pricing even more people out of the Canberra private rental market.

“This is exacerbated by Canberra having the most expensive rents of any city in Australia.”

When applying for a property, tenants must meet eligibility criteria such as proving their earnings and rental history.

“Our property manager assesses their fit for the property and prioritises applications based on an assessment of their need,” Ms Crimmins said.

Ms Bird said leasing her property with Rentwell was a “very personable experience” and Rentwell staff were clearly invested in good outcomes for landlords and tenants.

“I feel like I have committed to doing the right thing.”

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