Property investor says landlords not to blame

A property investor with a staggering $85million portfolio says landlords should not be blamed for soaring 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 more than a decade building 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 core of the problem. 

‘I get why people would be frustrated. Our first media article was in 2016 and I got death threats, people telling me that I was the reason they can’t afford houses where they live, that I was a capitalist pig,’ he said. 

‘Nothing changes, it’s the same every year. It’ll be here in 10 years time. It’s just a natural human response, people need a scapegoat.

‘And property investors are often a scapegoat.’

Mr O’Neill said some investors were greedy and didn’t do the right thing by their tenants, while others subsidised the rent for long-term tenants. 

Click here to resize this module

He blamed the reams of red tape that were stopping rental properties from being built for the anti-landlord sentiment that’s rife in Australia. 

‘There’s a reason that the market’s so tight, we have 600,000 extra 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, they’re just the infrastructure.’

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

‘Rents will keep going up, prices will keep going up. Eventually the rates will drop and the prices will go up even further,’ he said. 

‘The government’s got to create supply ASAP and if they don’t, there will be lifelong renters for sure.’

How Scott brought his first property

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

‘I did McDonald’s, I cleaned cars on the weekends and professional cleaning type things, multiple jobs while I was studying,’ he said. 

‘I’ve been bartending, dealing poker machines and I was forever working. You might be only saving a few hundred a week over the years but it does add up. 

‘I was 23 when I bought my first property and it was done with a minimal deposit required, so I did a 90 per cent lend. There was a saving on stamp duty at the time. 

‘It allowed us to get into the property market with $60,000 cash at the time. And you’ve got to remember $60,000 in 2010 would be almost like $100,000 now.’ 

Mr O’Neill said the nerve-wracking thing about making that first investment was ensuring he could cover the interest.

‘Savings was the monotonous, slow, boring part of it, which took years, and it felt like the market was always kind of getting ahead of me, to be honest,’ he said. 

‘But eventually we got there and it was a stretch, and it was the most stressful purchase I’ve ever made by an absolute mile. The first is always the worst.

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

‘We still hold that property today and it’s gone up more than three times its value.’

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

Mr O’Neill is confident 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 need to live in the home 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 it every day.

‘If you’re a pure investor, go where the good deals are and that might take you a bit further out. But you’ll get a bigger house with a better yield, and that will help you with serviceability long-term.’

He said it was a ‘fact’ that it was harder to buy a home now than it was 10 years ago. 

‘Any baby boomer that says “Young people don’t work hard”, look at the math, the average income to the average house price is a lot further out than it used to be.

‘I see it almost daily where I’ve got younger clients purchasing homes in different parts of the country, you know, sub $600,000 freehold houses.

‘Places that I see good sub $600,000 might be north and south of Perth, you can also go to regional Queensland – places like Cairns, Ipswich, Townsville.

‘If you want to stick to New South Wales, you might have to look at units.’