Housing crisis Australia: Property investor says landlords not to blame

A property investor with a portfolio worth as much as $85 million says landlords should not be blamed for rising rents across Australia.

Scott O’Neill, 28, is the CEO of Rethink Investing in Sydney’s eastern suburbs.

The father of two has worked tirelessly with his wife Mina for over a decade to build their portfolio of residential and commercial properties.

Mr O’Neill said he could understand why landlords were being blamed for the rental crisis, but said a lack of housing supply was at the heart of the problem.

“I understand why people would be frustrated. Our first media article was in 2016 and I received death threats. People told me I was the reason they couldn’t afford houses where they live, that I was a capitalist pig,” he said.

‘Nothing changes, it’s the same every year. It will be there in ten years. It’s just a natural human reaction: people need a scapegoat.

‘And real estate investors are often a scapegoat.’

Mr O’Neill said some investors were greedy and did not do the right thing by their tenants, while others subsidized rents for long-term tenants.

He blamed the massive red tape holding up rental housing construction for the anti-landlord sentiment that is widespread in Australia.

“There’s a reason the market is so tight: we have 600,000 more people in this country this year compared to last year,” he explained.

“These are the big problems and a landlord who just owns a property is not the scapegoat, he is just the infrastructure.”

Mr O’Neill also shared his dire predictions for the future of the rental market.

“Rents will continue to rise, prices will continue to rise. Ultimately, rates will come down and prices will rise even further,” he said.

‘The government needs to create supply as quickly as possible and if it doesn’t, there will certainly be lifelong tenants.’

How Scott brought his first property

Mr. O’Neill said he prioritized work for most of his early 20s, sometimes skipping classes for his engineering degree to pick up an extra shift.

“I’ve worked at McDonald’s, cleaned cars and professionally cleaned things on the weekends, and had multiple jobs while I was in college,” he said.

“I bartended, dealt poker machines and was always working. You may only save a few hundred a week over the years, but it adds up.

‘I was 23 when I bought my first property and it was with a minimum down payment, so I took out a 90 per cent loan. At the time, savings were made on stamp duty.

“It allowed us to enter the real estate market with $60,000 cash at the time. And you have to remember that $60,000 in 2010 would be almost $100,000 today.”

Mr O’Neill said the nerve-wracking part of making that first investment meant he could cover the interest.

“Savings was the monotonous, slow and boring part of it that took years, and honestly it felt like the market was always a little bit ahead of me,” he said.

“But we finally got there and it was a lot of work, and it was by far the most stressful purchase I’ve ever made. The first is always the worst.

‘The first house had a granny flat so it had two incomes, so it was a little better than if it was a standard house.

“We still own that property and it has more than tripled in price.”

Scott’s message for young Aussies trying to get on the property ladder – and why boomers are wrong

Mr O’Neill believes home ownership is still possible for young Australians – as long as they can generate equity, be ‘location agnostic’ and do their research.

“You don’t have to live in the house if it’s an investment property,” he said.

“You’re not going to buy Commonwealth Bank shares just because their head office is close to you so you can walk past them every day.

‘If you are a pure investor, go to the places where the good deals can be found and that may take you a step further. But you do get a larger house with a better return, and that improves usability in the longer term.’

He said it was a “fact” that it is harder to buy a house now than it was ten years ago.

“Any baby boomers who say, ‘Young people don’t work hard,’ look at the math: the average income relative to the average home price is much further away than it used to be.

“I see it almost every day with younger clients buying homes in different parts of the country, homes under $600,000.

“Places that I think are good for under $600,000 might be north and south of Perth, but you can also go to regional Queensland – places like Cairns, Ipswich, Townsville.

“If you want to stay with New South Wales you might have to look at units.”