Ep 38. Navigating the Rental Crisis
In this episode, Michelle chats with Sarah Elkordi from The Rent Fairy about navigating the rental crisis.
Here’s what you’ll learn from today’s episode:
Sarah discusses rental applications, and how to improve your own
What are the four D’s when it comes to finding the perfect rental property
Smart ways to navigate the rental crisis
The importance of good documentation when submitting your rental application
Speakers in today’s episode:
Michelle May - Michelle May Buyers Agents
Sarah Elkordi - The Rent Fairy
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This podcast has been produced and edited by Snappystreet Creative
Please note that any views or opinions presented in this podcast are solely those of the speakers, and do not necessarily represent those of any business. These views and opinions are general in nature, and do not take account of your personal objectives, financial situation and needs. Please consider whether it applies in your circumstances and seek professional advice wherever appropriate.
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VIEW TRANSCRIPT
Michelle May: Hi, and welcome to another episode of the Buy Your Side podcast, the property podcast to help you make smarter property buying decisions. My name is Michelle May, and I am the principal of Michelle May Buyers Agents in Sydney. Now, as you know by now, I usually talk about all the facets of buying. I'm very much a buyer's advocate and I know the property market from that perspective inside and out. I should say, I've been doing it for a long time. But, today I wanted to bring a different perspective to those who are out in the market, not to buy, but to rent. I think that the hottest subject on everybody's lips has recently been, besides the RBA interest rate increases and holds and whatever the consequences of those are, is renting. You know, how stressful it is to rent at the moment.
We've all heard the horror stories and read the horror stories in the papers, so, today I am very fortunate to have Sarah Elkordi, who is the director of The Rent Fairy, as a guest with me on the podcast.
So hello Sarah, how are you?
Sarah Elkordi: Hi, I'm well. How are you?
Michelle May: Good, good. I'm so glad to have you on the podcast because you and I have a lot in common, really haven't we? I'm an advocate for buyers in the market. And you are very much an advocate for renters and tenants.
Sarah Elkordi: Exactly. Right.
Michelle May: I'm so pleased that you're here today and, I'm just going to ask you a ton of questions if that's okay.
Sarah Elkordi: Absolutely. That's what I'm here for and I'm excited to speak with you.
Michelle May: Yeah. Well I'm glad you could fit me in actually, because I have seen your face and heard your voice on so many different programs because obviously you are the go-to person at the moment. A lot of tenants are desperately stressed out and need help. So I wanted to start with your beginnings really, and how the Rent Fairy came to be. So tell, tell us all about yourself and that.
Sarah Elkordi: So the Rent Fairy was launched in June 2020, but prior to that I was actually a property manager for about nine years. So I worked in all different areas across Sydney. I started my career in Kogarah, and when I left I actually ventured out on maternity leave and I left an agency in Erskineville.
During my time as a property manager, I'd always see that when we were processing applications and people were coming through open homes, the main focus would be to find the best fit for the landlord. There was no one that was really advocating or helping any tenants when they didn't understand how to put an application in. How to approach their application with different circumstances, like being self-employed or being a single Mum, or being a student who needs parent support. And I thought, well, when we're going through these applications, you know, you pick the best ones that have done a hundred percent, you focus on those ones.
Everybody else just gets that generic, unsuccessful email. Sorry, your application's been unsuccessful. Good luck with your search. But there's no follow up on that to say, okay, you've been rejected, these are the reasons why, this is what you need to do in order to fix your application and this is how to do it.
So I thought, I was on maternity leave, covid hit, you know, my job was a little bit unstable due to the fact that I wanted part-time being a Mum. And I thought to myself, well, I've had this idea. I sat down with my Mum and my sister and I said, I'm just gonna give it a go. You know, we're in the middle of covid. Nobody knows what's going on in life, nobody's travelling, everybody wants to move house, people were upgrading, you know. I was still across the market and I said, well, why not just launch something that helps people understand how to approach the rental market, understand how to put their best foot forward at all times and have someone in their corner.
So my mum came up with the name, The Rent Fairy. I said, perfect. We started it. We launched in June, it will almost be our third birthday in a month. We launched in June, 2020 and now, yeah, three years later, we're Australia wide.
Michelle May: Really? That's amazing. That's fantastic.
Sarah Elkordi: So we can help anybody anywhere.
Michelle May: Wow. So is it all based from New South Wales or do you have people in other states as well?
Sarah Elkordi: I have staff everywhere. I am obviously still the person, the main contact that everybody chats with. But I have very dedicated and wonderful staff members. We've got people in every state that attend out to inspections, so I'm very lucky. We've built a great team.
Yeah. We've been able to, to really help anyone.
Michelle May: Oh, Sarah, that is amazing to hear because initially I thought, oh, you were solely based in Sydney not just even New South Wales. So that's really exciting and congratulations on massive growth. My goodness.
Sarah Elkordi: Yeah. We've even moved people from Ethiopia, New York, New Zealand, South Africa, Las Vegas. We've moved them all into different parts of Australia, so you can imagine my nine to five is not a nine to five. I have to accommodate the different hours that other people are awake to give them updates, send them inspections and all those kinds of things.
So what started was an idea is now yeah, as I said, reality.
Michelle May: Hey, so you've touched a bit on how you actually help your clients. So you obviously help them complete an application form. But have you got a set structure, different kinds of services that you offer? Can you run us through that?
Sarah Elkordi: Of course. So there's different levels that you can obtain through The Rent Fairy service. So one of them is search. So we obviously go out, we provide people with properties that meet their criteria that's on the market. And we also source any off markets. However, people need to remember in this current market off markets are quite rare.
Michelle May: Oh gosh, we should have a separate conversation about what off market actually means, because that happens to me all the time. Do you find off markets? Yes, we do. But let me just provide some context.
Sarah Elkordi: Yeah. I mean, there isn't much, and again, there's so many different reasons that we can go into later on in terms of the off markets and why I feel like there isn't much out there at the moment.
But we do, we try to target off markets. We'll target recently sold properties and see if they're being sold to an investor that can convert into a rental. And then we organise clients to get out to inspect. So pretty much the best way I describe my services overall is, think about it as having a personal assistant.
And I think this will be similar to you, is a personal assistant who takes over the whole component of trying to find a rental property or a property.
Michelle May: Hold your hand.
Sarah Elkordi: Yeah. A shoulder to lean on, someone to call, someone to help you understand what you're doing and where you're going wrong or what needs to change.
And then another service, which I find is like the number one service for The Rent Fairy is the application service. So we use our expertise and our knowledge in applications in how to achieve a rental property. And we go through every client that comes through and I kind of call it a quality control now, where we'll go through and we'll touch on, okay, do they have bank statements? Do they have a tenant ledger? If they've got no rental history, where have they been living? What do they need? Do they have bank statements? Can they afford the bond? What's their affordability?
So we go through it all. And then the team and I are the ones who then put your application together and submit every application for you.
Michelle May: Yeah right, fantastic.
Sarah Elkordi: And then there's the ones that can't make it out to the open homes. They come through, we go to the open homes, we take detailed videos. We give very detailed feedback to the clients. So if we're looking out for what we call is the three D's: that damp, dirty, darkness.
I want to make sure that there's no dampness, it's not dirty and it's not dark. I drill it into my staff members. I'm like, check the three D's, because if it's dirty, damp, or dark, it's not the property. You know, because that just leads to the fourth D, which is depression. And we don't want that for our clients.
Michelle May: It's similar to what I always say. Some clients go, oh, but it's okay. The internal light's okay. I'm like, nobody wants to live in a cave. Nobody.
Sarah Elkordi: I get the occasional, paramedic or nurse or someone who's like, I want it dark because I shift work and I don't want the light on when I'm sleeping.
That's understandable, because the majority of their time when they're off is spent out. But the ones who are working from home are like, I want the light, I want the natural light. I want to be blinded by the light. So I think that's why we look at the damp, dirty, darkness.
Michelle May: Yeah, fantastic. I love that.
So clients when they come to you, they might not necessarily know how much help they need or want. So you can run them through these.
Sarah Elkordi: Yeah. So we have an initial consultation first. So everybody comes through books at the same time. We go through an initial consultation. We make sure that our services are right for you. We can't help everyone, unfortunately, you know, those that don't have enough income to cover or meet affordability. We still work with them, but we work with them in a different way, but we try and guide them on how they can meet affordability or we guide them on where they will meet affordability and where they can find properties.
Michelle May: Yeah, that's great. There's a lot of wishful thinking out there, isn't there? Like, from my perspective, when I talk to potential clients, they come with; this is what we want, say three bed, two bath, two car, and this is our budget and, and this is where we want to live. And it's like, well, one of these doesn't quite fall in line.
So, for us, it's our job very much to bring them, unfortunately, back to reality and go, okay, what something's gotta give. So we've actually got a service called a Focus Session. When they give us that information and go, okay, so what are the alternatives? Like if you increase, how much do you actually have to increase your budget to be where you wanna be to get the type of property you want?
And sometimes it's not a huge amount of difference. And it's quite still doable, because sometimes people give themself a self-imposed limit, don't they? And they go, okay, well I'm comfortable spending this, but actually they could afford it, and if they knew how much that was, they would actually spend it.
Or it's a case of, look, you've got to look in this area instead, or you've got to go from a house to a townhouse or an apartment. So that sounds very similar to what you do.
Sarah Elkordi: I call that our elimination process. So we get their criteria, we do an initial search, we give them an idea of what's available for what they say, and then we reconvene.
We go through it, we say to them, well, this what you can get in your current criteria. But if you were to up it, you know, for example, someone comes to me and says, I want a four bedroom house, but I only want to pay $500, we'll obviously go, we'll show them. But one thing that I always say to my clients is you can't get champagne on a beer budget.
So you need to be realistic. And I think what shocks a lot of people is what was once $500, you know, two years ago, a year ago, is now sitting up at $700, $800. So they need to be realistic, you know, they come to us and say, we leased a property two years ago for $500, it was in this area.
And it's like, well that's now gone up excessively, so you need to be open to other areas exactly the same way that you would do it? We have to because it's just going to waste our time if we sit there saying, yeah, your expectation is realistic, when really there's nothing going to be out there. We're not doing our job. So sometimes it's hard, but the cruel conversations are what make people understand a lot quicker, and then they appreciate that in the long run.
Michelle May: Yeah, absolutely. I think that cutting to the chase, you know the getting rid of all that wishful thinking is gonna help them in the long run and like I say to my children, no means no. Look, it's, it's a work in progress. And I think that sometimes when people, I don't know how that is with you, but when they come to me, they almost believe that I have a magical wand, which of course I'd love for people to believe that my work is magic and we pull some incredible results from time to time and at the end of the day, we still have to pay. You know, we're still in a competitive environment and we are still competing with others. And of course our clients have the professional on their side. But we're still working in a competitive market environment. But I love that, that you do that because it just shows like, you know, you are really on their side as opposed to you know, the sales agents and the management because they said, oh yeah, come and have a crack at it. But we know full well that they're never going to be successful.
Sarah Elkordi: Well when you think about it, property managers and agents, they work for the vendor or the landlord where we work for the tenant. So if you know an agent puts a price excessively high in a property, yeah, we can come back and say, look, go through and have a look at this property, but we know from our knowledge that this is overpriced.
Michelle May: Yeah, absolutely. You know?
Sarah Elkordi: Or this is underpriced or, whatever it may be that's just, we advocate for them, you know, and if, if another part of our services that we do, but we do not as often anymore, is the tenanccy dispute.
Michelle May: Yeah, I was going to ask you about that actually.
Sarah Elkordi: With tenancy disputes, they just, sometimes I'm finding at the moment a lot of the tenancy disputes are more emotional than factual. So, there's a rental increase, and in some cases it is a justified rental increase, in some cases it is excessive, but because, wages aren't following in suit in terms of increasing, people can't afford them. Which then has created a lot more of tenancy disputes in tribunal at the moment. But we guide a lot of people. And again, we have to bring them back to reality in terms of what is factual and what is not. In tribunal everything is evidence-based. So we do, we do assist with tribunal disputes.
Michelle May: I mean it's good to have a conversation with you guys anyway then if you are thinking of going down that route. Because housing is such an emotive subject, isn't it?
Like when I buy for clients, people have been saving up for years and they've been waiting to have children even and they've missed out so many times. And the same as renting because it's much more of an insecure place to be. Particularly now, when, from my perspective, I'm seeing a lot of landlords putting their properties up for sale with tenants still in place, and also I've got clients currently who are like, we have to buy now because we are getting booted out of our rental accommodation.
Sarah Elkordi: There's a lot of reasons why people are having to move at the moment and there's been, I feel like a lot of an influx of students that have come in that now need properties, which I'm finding is a lot more parental guarantor, six to 12 months rent paid up front. So it's making the market so competitive at the moment. And then there's the ones, like you said, that are selling for whatever reason that is, that then puts the tenant who is in there, quite on edge.
I get a lot of clients who will call me and say they're selling our property, we don't know when we have to be out, but we're going to move. And sometimes I have to say to them, sit tight because you're in a one bedroom unit. If that's an investor, you can sit there, they've leased out the property, just sit tight, see how it is, and then we will act swiftly on whatever the outcome is. But sometimes then they find that they move out of the property and the property's up for rent the next month. So sometimes, as much as it is tough out there at the moment, sitting tight for a little bit, having a conversation with the agent, taking the emotion out of it a little bit more will impact you positively in the long run, if you can think about it logically without emotion, and I say that I'm a very emotional person, but sometimes you just have to take the emotion out of it in order to make the right decision.
Yeah, definitely.
Michelle May: I guess you've got to remember the other person on the other side of that equation is not emotionally involved and it's just, at the end of the day, it's not really their problem, what you're going to do after.
Sarah Elkordi: No. That's just a transaction on the other end.
Michelle May: As hard as it sounds, that is the way it is.
Everybody's hot topic is the rental crisis, right? But obviously this didn't just happen overnight or did it? When did you start to see things really going south the way they are being portrayed now and the way we are hearing about it in the media?
Sarah Elkordi: I think it's probably been like this for about a year, but I think that the media wasn't covering it until the rates went up. And when there was a constant increase in rates, then it became an issue in my opinion, because then we saw more properties being sold, not enough properties for rent, and then rental increases.
I think there's been an issue on supply and demand for quite some time. I don't remember this time last year going out to open homes and having small amounts of people there. I remember, even in February last year, there were massive, massive numbers of people at open homes.
I remember I'd take my son to an open home to view for a client. It was a last minute one, and there were 89 groups through this two bedroom property in Erskineville that was $730 a week, and that was early last year. I don't think I mean obviously it's been around, in my opinion, for just over a year, but I think the media only got onto it and how bad it was not so far long ago. I think probably at the end of last year, November, December, did it start to kind of heat up, rates were going up. Then it was like, oh, now it's impacting on renters, now we do it in the story, in the media. And in saying that, Queensland's been in a rental crisis, God, since I've started, it's almost two and a half years they've been in one.
Michelle May: Oh really?
Sarah Elkordi: Yeah.
Michelle May: I live in the inner West of Sydney and you hear it all the time. And I also have people contacting me saying, hey, can you help me find a rental property? Unfortunately, that's not what we do. We've got to really focus on our core business.
But yeah, that has been going on for quite a while. So do you have, apart from taking the emotion out of it as much as you can, do you have any suggestions on offer for anybody who is currently looking to rent?
Sarah Elkordi: Suggestions in terms of how to do their application or just in general in terms of when they're searching?
Michelle May: Listen, Sarah, I'm in your hands. Let's start with your application, for example. What is the one thing, the biggest, biggest mistake that maybe potential people make or would make the biggest difference if you do it right?
Sarah Elkordi: Lack of documents and references, in my opinion.
I find that when, and this is just from my clients and like we service thousands, like there's so many of them that come through in the repetitive pattern that we find is what we're not getting enough of in the initial call in for the documents is the documents. I always say to them, give me everything that you've already been putting in for your applications.
Because again, I like to check. And then we send them a checklist of everything else that we need. What I'm finding is there's no bank statements to prove income. There's not enough updated pay slips or there's no tenant ledger. And I find that if there's no documents there, that agent is going to look through, well on the system it's going to come in that it's incomplete because they haven't submitted all the documentation in order to proceed to begin to have it processed. And then what I find is you're putting in references that aren't responsive. Just today we've had four client applications where we have made contact with the agent and we've said, what are you waiting for?
Because that's what we do on a Monday. We follow up the applications and three of them have come back and said, well, we're just waiting on one more reference. Then we get the client, get the phone, get that reference done asap because that's what's holding your application back. But if there are, you know, 50 applications, 60 applications per property, and an agent sees that a reference isn't done, but there's 10 applications where they've got full documentation of full references, yours automatically is bottom of the pile.
We don't want that here. That's where we come in. We need to make sure that the references that you are providing in your application, you've had a phone call with them, you're saying, Hey Bob, it's Sarah. I'm applying for a few properties, for example, just to let you know, I'm popping you down as a personal reference or a business reference, do you mind keeping an eye out on your email? If you get any new references, if you could just quickly fill that out for me please. Same thing for your employer or HR or whoever it may be. So crucial, and if you're self-employed, your accountant is even more crucial. They need to confirm that that income is there. That income is stable. So making sure that they're responsive to the reference centres is the top five things that you need to be able to do and documentation as well.
Michelle May: Yeah, that makes absolute sense to me and but it's amazing because it's a little bit about we have so many synchronistic really, because I always say to my clients, the market couldn't care less about you and what you need.
You've got to get on with the market. You've got to give the market what it wants and that means, you've got to pay what is fair. If we can get away with less, we will certainly do it, but, it's that you are in a situation where there's so much demand out there that you've got to do what is the minimum, bare minimum, and then some, right?
Sarah Elkordi: Yeah, exactly right.
Michelle May: That makes absolute sense.
Is there an application or a story with a client that stands out for you that, really sort of something you'll always remember helping in some way?
Sarah Elkordi: I have a few, I think the ones that always get me are the ones that are like, oh, we've been trying for six months, we can't get approved. And then I have a look over their application, we do our quality control. We see that their documents aren't up to date. We change their references, and then maybe one or two applications later they're approved. That happens quite often. I mean, there was one client, and it was probably the quickest turnaround that we'd had.
They came on board, I think it was a Tuesday. They were from the UK moving to South West Sydney. We provided them with searches on the Wednesday, went out and viewed a property Thursday morning, they were approved Thursday afternoon.
Michelle May: Wow.
Sarah Elkordi: That was one application, one open home. They had been trying, they'd had a family member attend to the inspections, but they just, the documents were just not enough.
But we got the right documents. We changed, we did like a whole, I'll call it a facelift on their application. How do I say it without saying it? We dumb it down. I say we dumb it down for the agents. We really break it down. Like we send a breakdown email, so these agents understand every single thing about this person.
Their income. Their living history, why they're coming to Australia, when their visa expires, all these kinds of things. So when they go to the owner and say, okay, we've got an application, they don't have to do the hard work. We've done it for them. Here's the breakdown, copy and paste it to the landlord or read it from your email.
And then you've given your landlord the breakdown of the application, so it's almost like we're, I hate saying dumbing it down, we're breaking it down for the agents.
Michelle May: But you're making it as easy as possible for the agent to accept the application, right? I mean, again, that is what we do as well. And I think that you must be a favourite of the agents then too, because when they see you coming through the door, they know that you and your team, that you've got a paying client who you have prepped as to what is needed.
Sarah Elkordi: Correct.
Michelle May: And therefore, when they get an application from you and your team, they go, okay, yeah, that's gonna be a good contender. Because you know exactly what hoops you have to jump through in order for it to be successful. You're not goning to half ass it, if you like.
Sarah Elkordi: Agents love it. They'll call me and be like, oh, we've got your application here. We're just going process it. Now, it doesn't necessarily mean that the other applications aren't going to get approved. They can be stronger or, you know, more suitable application for the agent. That's something that we don't have control of, unfortunately. Hopefully one day I do. We know that every single time a client's application is submitted, it's submitted to the highest standard it could ever go, you know, it could ever be submitted, which I think is something that really puts our clients at ease. They know that while their property managers are working to find the best fit for their landlord, we are making sure that we are providing them with everything that is required for them to put their best foot forward at each time.
Michelle May: Yeah. Yeah, absolutely.
Well, it's been so enlightening to listen to you speak about how you work, and how you help tenants in the marketplace because, I think a hundred percent they need help, not just now, but you know, consistently because renting in Australia isn't easy. And, you know, those people really could do with a fairy.
Sarah Elkordi: I appreciate it.
Michelle May: So is there anything you want to add? If nothing else, how to contact you and your team?
Sarah Elkordi: Yeah, look, I think I'm always open for a chat if anybody wants to call, if they've got any questions. You can literally jump online to my website. We've got an inquiry form, you can pop your details in and they get an automatic link to actually schedule a time to speak with me personally. So you can do that. There's five days a week to choose from there. Or you can give me a call. My number is on the website or send me an email info@therentfairy.com.au.
Michelle May: Thank you, Sarah. I hope the listeners, I know the listeners will have picked up a lot of great tips from you.
I really appreciate you taking the time out to speak with me. I know you're incredibly busy.
Sarah Elkordi: Thank you. I appreciate it.
Michelle May: If you have listened to this episode and you have some more questions for Sarah and myself, don't be afraid to get in touch. hello@buyyourside.com.au
Both of us are on Insta. Do you do TikTok as well, Sarah?
Sarah Elkordi: I do do TikToks.
Michelle May: Oh my gosh.
Sarah Elkordi: I'm very lighthearted and I find myself a little bit funnier on TikTok, but I do, yeah, I do do TikTok.
Michelle May: I do as well. I do. I struggle, but I give it a crack.
Sarah Elkordi: I did one with a good 100K views and I was like, oh, keep doing them. So I do a few more.
Michelle May: Oh gosh.
Sarah Elkordi: I just have a laugh with TikTok. It's the lighthearted side where I get to have a little bit of fun with it rather than the serious side, you know, Monday- Friday,
Michelle May: Well check Sarah out. The Rent Fairy, the one and only Rent Fairy. Thanks again Sarah and thank you for those of you listening.
Until next time.