Since Lenny Bellinger and Michelle Stephens assumed control of OBrien Real Estate’s Carrum Downs and Langwarrin branches in February 2024, they avoided acquiring the existing rental portfolio. Opting instead to launch property management from the ground up, they took a non-traditional approach for a firm already well-established in its market. Neither considered themselves rental specialists, so they prioritized gradual development over inheriting hundreds of properties upfront. As Bellinger noted, “We were happy to start from scratch and learn as we went because we weren’t rentals experts,” emphasizing that early mistakes with fewer properties carried less financial risk than scaling too quickly.
Lenny said neither he nor Michelle considered themselves rental experts at the time, and they preferred to build the department gradually, learning what worked as the portfolio grew. “We were happy to start from scratch and learn as we went because we weren’t rentals experts,” he said.
A little over two-and-a-half years later, the portfolio had reached over 350 properties, while the sales side of the operation had continued to perform strongly. The office became OBrien’s number one sales office and recorded just over $6.2 million in the previous financial year.
Building a Rental Department
Rather than trying to build property management as a separate operation, Lenny said the original plan was to use the strength of the sales business to create opportunities for the rental department. Michelle, the office’s lead sales agent, could have between 20 and 30 open homes on a Saturday, putting the team in front of between 100 and 150 people and giving it regular contact with investors who could potentially become property management clients.
Lenny said the team brought across many of the practices it already used when selling a property to the rental department. This included considering what the team genuinely believed a property could achieve in the rental market, presenting it accordingly, and running rental open homes with the same level of engagement it expected at a sales inspection.
“We would run an open home like it was a sales open home. We would actually talk to people,” Lenny said. This approach allowed the team to make sure it got really good quality tenants, while also getting the right dollar figure for the homes.
The team pushed rental pricing strongly during its first 12 months, and those results began generating business beyond the referrals coming from the sales department. Landlords saw what properties had leased for and contacted the agency to find out what it might be able to achieve for them.
A Sales Mindset for Rentals
One of the key decisions was to build the new department around someone who already understood how the sales business operated. Jae Lukey had spent years working within Michelle’s sales team before moving across to establish the rental division. Lenny attributed much of the department’s growth to her willingness to take on something new and adapt as the business expanded.
Lenny said the team’s approach to rentals was essentially the same as its approach to sales. “If you strive to get the absolute best result for your vendor, present the home in its best possible light, actually interact with people and get the best result, the results will lead to more results,” he said.
The team’s focus on service and relationships has been key to its success. Lenny said the business sees the rental department as a way to continue looking after investors between transactions and maintain those relationships until they are ready to sell again.
For Lenny, focusing too heavily on extracting a profit from a management can become counterproductive if an owner receives poor service and takes the eventual sales listing somewhere else. “It’s not a matter of going, well, you know, we made a little bit of money out of rentals over the two or three years we managed it, but lost a $25,000 commission on the other end because they actually weren’t happy,” he said.
The business has also made hiring decisions that prioritize culture and fit. Lenny said maintaining that culture as the team expanded has required adjustments, and the business has made decisions that did not always work. However, he believes keeping someone who does not fit the culture simply because the business needs another person creates a larger problem.
Lenny said the agency’s location in Carrum Downs, Langwarrin, Skye, Sandhurst, and Seaford has been a factor in its success. The surrounding area is relatively affordable and well-positioned between Melbourne and the Mornington Peninsula, with infrastructure and government spending attracting first-home buyers, families, downsizers, and interstate investors.
The local housing market’s characteristics will continue to create opportunities, particularly through new development and sites capable of accommodating more than one dwelling. Lenny pointed to the availability of land and blocks suitable for dual-occupancy and three-dwelling projects as areas where investors could continue adding new rental stock.
Future Growth
Lenny expects the investor market to slow somewhat, but believes the local housing market’s characteristics will continue to create opportunities. The business is well-positioned to take advantage of these opportunities, with its strong sales and property management teams working together to provide a high level of service to clients.
