One-third of Australian rentals now managed without agents as self-managing trend accelerates

HouGarden Australia, 21 September — RentBetter, which operates an online platform allowing landlords to find tenants, track expenses and arrange repairs, says the self-managing trend is accelerating as the rental market tightens following the federal government's May budget announcements on negative gearing and capital gains tax.

The platform has raised $5 million from Australian venture capital firm EVP. The fundraising comes as landlords look to reduce outlays, including the agent management fees that real estate comparison site LocalAgentFinder says typically run between 5 per cent and 9 per cent of rent collected.

RentBetter founder and chief executive Jeremy Goldschmidt said investors had concluded that real estate agents were not delivering value for money. Real estate agents are consistently ranked among the least trusted professions in Australia, including in a 2023 survey by research firm Roy Morgan.

Goldschmidt founded the company in 2018 after deciding the agent managing his own investment property was not worth the cost. He argued that property owners have a stronger personal incentive to care for their asset than an agent does. 'I think if you spoke to real estate agents, a lot of them would say that the value of the rental book is often to produce leads for the sale,' he said.

Cutting out agents and property managers can save a landlord an average of $2,400 to $5,000 in annual costs per property, RentBetter estimates. The company acknowledges, however, that there is no guarantee those savings will be passed on to tenants.

'The landlord will certainly be able to save on a chunk of fees that they're paying out, particularly in a tighter environment,' Goldschmidt said. 'I think where the relationship is strong with the tenant, it means that they can have more sensible discussions about what's going on in the tenancy, and naturally, one would believe that that's a better outcome for everyone.'

The backdrop is a market where sale prices and rental prices are moving in opposite directions. Median house prices have fallen since the federal government unveiled changes to negative gearing and capital gains tax in May — dropping 5.3 per cent in Sydney since January and 5.1 per cent in Melbourne since November, on a median-price basis.

At the same time, a report from property portal Domain for the June quarter recorded Sydney rents rising almost 8 per cent year on year in the three months to June 30, in part as landlords raised rents to offset lower-than-expected capital gains.

Real Estate Institute of NSW chief executive Tim McKibbin said the ability to select the right tenant was a key service that agents provided. He said he had seen no evidence that owners who manage properties themselves pass on any savings to their tenants. 'I can't see why a landlord would say, well, I'm saving on the agents' commissions, I'll share it with the renter. I may be wrong, maybe some people will do that, but I think they would be in the minority,' McKibbin said.

Tenants' Union of NSW chief executive Leo Patterson Ross said some landlords managing their own properties might feel less external pressure to push rents higher. 'Some landlords may feel less pressure to increase rents where they don't have an agent encouraging them to increase it,' he said. Even so, Patterson Ross noted that new rents are generally set by what a tenant can afford to pay, not by the landlord's cost structure. 'We would be pleasantly surprised to see owners passing on savings, but we will believe it when we see it,' he said.

The self-managing trend in Australia is distinct from regulatory and market conditions in New Zealand, where the rental landscape operates under different rules. New Zealand's rental market has also seen a growth in landlords choosing to manage properties directly, though local data on the scale of that shift remains limited.