For Alison Dougherty, being a landlord was always a two-way street.
“The tenants depended on me and I depended on the tenants,” she said.
“So it was always important to me to look after the tenants and no request unless it was unreasonable was ever knocked back.
“And if I had a great tenant, which I often did, I wouldn’t raise the rent.”
But after more than a decade as an investment property owner, Ms Dougherty joined what industry groups warn is an exodus of landlords selling up.
Rising taxes, changing tenancy laws and biting interest rates are some of the reasons, according to one recent industry survey, that property investors are exiting the market in droves.
“Many are selling their properties. Many are selling all of their properties,” Nicola McDougall from the Property Investment Professionals of Australia (PIPA) said.
“And what our survey also showed — a significant percentage have actually said they will never be an investor ever again.”
The strength of the link between pro-renter regulations and property divestment has been questioned by one research body, which added that a booming market had offered property owners another strong incentive to sell.
“There’s been good capital return for people who have the inclination to sell at this time,” Michael Fotheringham from the Australian Housing and Urban Research Institute said.
But both research groups have warned the sale of homes that usually house a booming population of renters is having poor outcomes for tenants.
These landlords all contacted the ABC after it covered problems in the rental sector in recent months, wanting to tell their side of the story.
Loss of control a key theme for landlords
When Ms Dougherty returned from a stint living overseas about 15 years ago, she couldn’t afford a house in Melbourne.
Piecing together a retirement plan, she bought a rundown house — what she called “the worst house in the best street” — in Bendigo, and began contributing rental returns to a self-managed super fund after she renovated and rented it.
A second Bendigo property followed, then good returns when the property market boomed.
They were still generating income when she decided a changing regulatory playing field meant the money could be invested elsewhere with less risk — and sold both.
The changes enacted in 2021 included new minimum standards, changes to rules around pets in rentals and mandatory regular inspections of things like gas appliances and smoke alarms.
“I was finding it was getting quite complicated with the new changes and, increasingly, there were more costs being put on the owner,” she said.
“[The tenants] could do things without even asking me and in the longer term, it felt like I didn’t have control over my property anymore.”
Its recent survey found increased property taxes and fees, then tenancy legislation and rising loan repayment costs, in that order, were the factors pushing landlords to sell up.
The September survey of more than 1,700 investors found the exodus was particularly pronounced in Melbourne, where a quarter of property investors who responded sold at least one rental home in the past year.
‘You can vote with your feet’
The wall of Dean Campion’s home office is decorated with the framed listings of properties in his investment portfolio, which once spanned nine properties in four states.
These days, he sees property investment as a kind of hobby. But when he started out, it was a vessel for social mobility out of his working-class upbringing.
“My dad was always stressing on me about not ending up working in the factory,” he said.
In the late 1980s, as a 24-year-old university graduate, he put down a $15,000 deposit on a three-bedroom, “fairly rough” flat beside a highway in Cheltenham.
The value of the $51,000 property rose by the price of the deposit in the space of 12 months, he said, and the capital gains allowed him to buy a house in Brunswick.
His portfolio grew to include three homes in Mt Gambier, one in Tasmania, one in Albury and three in Traralgon, where he would usually buy cheaper properties and use the income to offset the mortgage.
He acknowledges landlords “get a bad wrap” and that this kind of wealth-creating opportunity no longer exists for people like his daughter, 25, who has a large HECs debt and pays more rent than he used to.
But he says some states are more landlord-friendly than others, and Victoria isn’t one of them.
He said he decided to sell his Traralgon properties after their value rose during a wave of COVID-era seachangers at the same time as the regular inspection requirements were slimming his rental returns.
“That was going to be at least $1200 per property. I thought it’s getting too much,” he said.
“The government can change the rules, but they can’t force you to keep being a landlord.
“You can vote with your feet and that’s what I’ve done.”
Rising rents, land tax changes among pressures on landlords
For Branko Kovac the property industry is less like a hobby and more like a game of Monopoly.
It started when he bought a second property in Sunbury for $54,000 with his wife in the late 1980s.
“When I had the equity in the other place, that let me, basically, play like Monopoly,” he said.
“I was buying one house up against the next house, the next house up against the next house, and so forth.”
He said he had owned about eight properties along his property journey, which was helped by a $40,000 lottery dividend early on and hindered when rising interest rates put him in “danger of nearly losing everything” later in the 1990s.
Today, he owns a rental property, a holiday home and a farm in Sunbury.
At the rental home — a four-bedroom house leased to a single mother — he recently increased the rent from $345 to $400 per week, which he said was the first rent rise over her seven-year tenancy.
Pointing to rising rates and the upcoming lowering of the land tax threshold, introduced so the state can pay off its COVID-era debt, he said a second increase was on the table, even though he makes some income off the property because it’s paid off.
Is it unfair for someone who owns property to increase the rent of someone who doesn’t?
When asked this question, Mr Kovac said he empathised with people locked out of property ownership.
“At the same time, we’re giving them a house to live in,” he said.
“Unfortunately the government of the day has made things so difficult that the tenant has to absorb the costs.
“I like to try to be a good person and not a bad person, but the government is pushing me to become a person I’m not happy to [be].”
Property churn ‘unsettling for tenants’
What happens when those investors sell up?
Pointing to survey statistics, PIPA says fewer properties are being bought by fellow investors year-on-year.
“We can safely assume that those properties have been removed from the rental market,” Nicola McDougall said.
This position is backed by the Real Estate Institute of Victoria, which says a historically high number of new sale listings are likely to have been rental properties.
AHURI’s Michael Fotheringham said it was “simplistic” to assume the properties are passing from investors to owner-occupiers, given home ownership remains out of reach for many.
However, he warned of a “range of ways in which property churn is unsettling for tenants” even as properties are sold from one investor to the next.
That could include tenants being evicted as properties are sold, rents being raised as new leases begin, or homes being let on the short-term rental market, which reduces rental stock without increasing home ownership.
Dr Fotheringham said good policy would strike a balance between quality of life for tenants without being cost-prohibitive for landlords.
“This is the main game here — trying to find a balance of rental reforms that benefit the tenants without being punitive to landlords, and actually find outcomes that are good for both groups,” he said.