The Real Estate Institute of Australia (REIA) says that small investors are an ‘untapped’ resource when it comes to Australians in social housing making the transition to the private rental market.
“Except in Western Australia, there is no assistance to social housing tenants with good tenancy records and stable incomes to make the transition to the private rental market and whilst the National Rental Affordability Scheme (NRAS) utilises private sector funding, by its nature it excludes small scale investors,” says REIA president, Peter Bushby.
He says that, as part of REIA’s election policies 2013, the organisation has proposed that investors could buy a new or existing property for rental purposes, which would be subject to broad guidelines provided by the appropriate state government agency/department regarding location, size, number of bedrooms and value.
“The owner would go to the agency with details of the property and a rental market valuation for endorsement for transitional housing. A tenant would be selected from the department’s list of eligible clients and a real estate agent would manage the property.”
Bushby says that, under the proposed legislation, governments would need to guarantee the rental payment for the term of the arrangement and depending on the extent of the rental subsidy, may need to consider other assistance to the owner to achieve the equivalent net yield if the property was rented in the private market.
“The managing agent and owner would attend to routine maintenance matters as occurs in the private rental market alleviating the need for government involvement. Social housing tenants, just like private housing tenants, would be required to meet responsibilities of caring for the property and leaving it in good condition at the end of a tenancy,” he says.
“Social housing is provided by governments to low income households and those people who are unable to find appropriate accommodation in the private rental market. Governments can’t keep up with demand, so surely this is a win-win concept.”