@Japon - you are not clearly reading what I'm writing - you are reading it as you WANT to interpret it.
Let's be clear - The ABS stats agree to the total property numbers reported by RNT. What I'm saying is that the total is not relevant. For properties managed by agents, it is NOT the number of properties that is most relevant, it is the number of agents.
I agree that there are about 3m residential rental properties. I also agree that there are 2m taxpayers who own rental properties. MOST of those taxpayers use real estate agents to manage the property. Again - we know the revenue model for RNT for those real estate agents.
It is the OTHER real estate investors that we are talking about. Public housing is irrelevant to RNT. Corporate housing is irrelevant to RNT. Community housing is irrelevant to RNT. Defence Housing is irrelevant to RNT. Someone who rents a property to their family is irrelevant to RNT (I have friends who own a property and their children pay them rent, and I have friends who own property and their parents pay them rent). None of these advertise for tenants. They will never pay RNT a single dollar.
So the people who own a rental property AND manage it themselves are who is relevant for RNT. And from all my research, this number is smaller than RNT has portrayed in its presentation.
There is no need to consider adding properties owned by trusts/companies. They are already included in the housing stock figures.
The 1m transactions from rent bond authorities also suggests the average tenancy is much longer than the 12 months that RNT suggests it is. Again this says the the revenue potential from the market is smaller.
(And as an aside, the taxpayers who have rental income in the ATO data also include those people who own commercial property generating rental income, not just residential. So you can't assume those numbers just translate for your calculations).
What I've been trying to do, is backwards calc the revenue potentials. Others have done so here. I've been a bit more scientific about it and independently verified a number of the key assumptions for the total market potential. In this situation the total constraint is the size of market because we aren't creating a new product/service that doesn't exist.
My key concern is that whilst I think RNT has a chance at building a business, I think it will take much longer (and will be smaller) than a lot of people here do. Obviously I look for other things in my investment criteria.
At this stage, personally for me, I'm highly unlikely to buy at this price level. Unless something happens from left field (which is always a possibility) I think there is greater likelihood of seeing a lower share price than a higher one. If it decreases, there is a point where it becomes a buy in my opinion. For me, it isn't there yet.
Cheers
Marv
