If you’re the type of person who buys washing powder in the cardboard packaging over the plastic-wrapped option, or who supports the small cafe down the block rather than the Starbucks next door, you’re not alone. There appears to be a growing trend towards people putting their money where their mouth is when it comes to their personal ethics. But what about putting your investment property where your mouth is?
Can property investors and property managers come together to help solve some of society’s most pervasive problems without dinting their returns? That’s exactly what’s happening in Queensland's capital.
At the heart of one of Brisbane’s most desirable suburbs lies Alford Street - a quiet, tree-lined avenue just off the idyllic New Farm Park. Beyond simply blissful, the community is set to house an incredibly important project. Alford Street, New Farm is home to an 11-unit complex that will soon provide housing for one of the community’s most at-risk groups. In doing so, it will also host what could be a first-of-its-kind arrangement between charity and real estate agency.
Enter Project 55 - a new initiative launched by ‘profit-for-purpose’ full service real estate agency, Elevate Residential - which calls for 55 property investors to sign up to Elevate’s property management service. The management fees paid by these 55 landlords will help fund targeted rental subsidies and personalised support for women aged 55 and over at risk of homelessness in the Alford Street complex.
As of late October, it's a quarter of the way to achieving its goal.
Elevate Residential looks after properties and tenants across much of South East Queensland and every dollar it makes helps Brisbane Housing Company (BHC) - one of Queensland’s leading community housing providers - support those in need of housing. It’s also never lost a client due to dissatisfaction.
“It's testimony to how we look after people,” Elevate Residential principal licensee Chris Meadmore told Your Investment Property Magazine.
“We're a market-based real estate agency and we have to compete with everyone else, it's just a bonus that our profits go towards a charitable cause.
“We're obviously very focused on the dual mission of doing really well with real estate but also making a positive impact on the community.”
Elevate is calling for 55 property investors to sign on to its services between now and May 2024, with 100% of the profits from their commissions providing rental subsidies and support services for women accommodated by Project 55.
Thanks to the funding provided by Elevate, many programs have been brought to life that otherwise would’ve fallen by the wayside, said Rebecca Oelkers, CEO of BHC.
BHC has developed almost 2,000 homes for people at risk of homelessness or in need of housing assistance since its establishment in 2002, and its services have never seen more demand than they do today. Homelessness in Queensland rose 20% over the four years to 2021-2022 compared to 8% nationally, while private rents have outpaced those in all other states and territories, a landmark report from the Queensland Council of Social Services (QCOSS) and The Town of Nowhere campaign revealed earlier this year.
Next on the housing provider’s list of priorities is Project 55. As far as BHC is aware, Project 55 is a first-of-its-kind.
“We know from the work we do every day that many older women are finding themselves suddenly at risk of homelessness and that, for most of these women, it’s a situation they had never contemplated,” Ms Oelkers said.
“These women have been working, raising children, looking after family members, and contributing to their communities for many years. Then, all of a sudden, through life circumstances such as job loss, divorce or illness, or simply rental increases that are unaffordable, they are on the brink of homelessness.
“Some end up couch surfing between family members, unsure where their next night is going to be spent, others are sleeping in their cars. Few know how to, or feel comfortable accessing emergency shelters or temporary accommodation, and while the statistics show this group to be one of the fastest-growing cohorts of homeless persons, many older women in need are actually hidden from these statistics because they simply don’t present to homelessness services for assistance. They fall through the gaps.
“We spoke to Elevate Residential about joining forces on a campaign that will raise funds to sponsor the women and they were immediately on board.”
Image: Brisbane Housing Company CEO Rebecca Oelkers
“We jumped at the chance,” Mr Meadmore said. For the women turning to the project, it offers far more than just subsidised rental accommodation. Project 55 will also provide a welcoming community and personalised support to help older women find their feet once more. Such support could come in the form of a furniture package or connection with employment opportunities, Mr Meadmore noted.
“It doesn’t cost property owners any more to choose Elevate Residential, so they get a win-win of great property results, plus knowing they are making Brisbane better for people in need,” Ms Oelkers said.
The idea of an Australian profit-for-purpose real estate agency emerged a number of years ago. The first appears to have been born in Melbourne in 2014.
“HomeGround began as the growing need for affordable housing was identified,” HomeGround manager Samantha Gatherum-Goss told Your Investment Property Magazine. It charges similar property management fees to other boutique agencies in Melbourne, but the profits it raises go towards Melbourne’s largest housing and homelessness support provider, Launch Housing. In the years since its birth, HomeGround has spread to manage properties in Sydney and Canberra as well.
“By simply moving the management of their investment property to HomeGround, we have more management fees to contribute to Launch Housing’s work,” Ms Gatherum-Goss said.
“However, if an owner is in the position to offer their property at a reduced rate, this will have a double impact both financially for Launch Housing and an opportunity for someone on a lower income to live without being under rental stress.”
Many other profit-for-purpose real estate agencies have popped up along Australia's East Coast in recent years, including EchoRealty in Melbourne, Sydney, and Canberra, Key2 Realty on NSW’s Central Coast and Purpose Real Estate on the Sunshine Coast, to name a few. They all aim to tackle the housing crisis in some way or another by handing any and all profits over to dedicated local organisations.
In the meantime, the nation has continued to demand more roofs than it has access to. It goes without saying that various political movements have placed some of the blame for the current housing crisis on landlords’ shoulders in recent times. However, according to Domain, the reality is that up to 70,000 new rentals are needed in the market in order for demand to be met – the equivalent of a city the size of Newcastle. The true blame seemingly lies in a lack of development and a throng of investors leaving the market, whether that be a result of rising interest rates or shifting legislation.
While we’re probably not going to find a solution to ease the housing crisis overnight, by switching to a profit-for-purpose real estate agency, investors could help provide some much-needed support for some of the most vulnerable members of their community. And doing so needn’t dint their returns. As Ms Oelkers says: “It’s a no-brainer!”
Profit-for-purpose real estate agencies
Images supplied by Elevate
