How many IP's do you have?
- Thread starter crc_error
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Good question GoAnna,
We fit into that boat. I think it's mainly leaning towards your # 2 reason.
I suppose it's also a historical thing, combined with the effects of X-Coll.
Start out small, leave it a bit to grow, use what you have as a 20% deposit on the next thing....ergo the next thing can be up to 5x as big as previous one....leave a while...repeat as necessary. Snowball effect here we come.
After a decade or more, your purchases are 100's of times bigger than what you started out with. We've now found one purchase takes us out of the picture for a year or two.
The best thing about the strategy is that the tenants get big and professional, and because of the low number of 'em, the PM side of things becomes almost non-existent. The load actually reverses....or so we've found. Does that make any sense ??
#4 I am just beginning my journey (2 units, 3 houses).
but also RE #1:
I wouldn't want to manage any. Never have, and don't plan to.
Looking forward to having hundreds.
I have 4 IPs 
Cheers,
e
I actually want more. Just haven't gotten there yet.
Would actually prefer this. Maybe someday...
Yes. Working hard to get the next deposit ready.
Yep. Still see myself at just the beginning of a long investment journey.
Already have. If I didn't I'd probably would have more IPs but I prefer to learn about other investment types as well. I figure the best way to learn something is to actually be involved in it.
Nope. Motivation has never been a problem for me
Nah. Maybe 200 and writing a book would be scary!
Want to build my share portfolio to the same (gross) size as the property portfolio so it will probably take a while before I get to 10+.
Cheers,
e
Sorry not to be clearer but I was not meaning "self property manangment" purely the overall management because in the end you are still "mananging" each property however you like to look at it. For eg having 10 ips might mean dealing with 10 PMs
I shudder at the thought of managing 10 PMs. I am struggling with 5. Jumping into Dazzling's pond is getting more tempting every day...
Sunshine
One ip does not have to equal one PM of course.
We have 2 PMs for 24 ips (others self managed)
2 for 24 sounds good. Unfortunately mine are spread too far and wide. I have 5 for 10, half with 1 PM. Researching the pros and cons with self managing one of the ones closer.
Unsure at this stage if it is a case of the more I know the more I expect, or if the service is actually getting slacker especially considering their fees are getting higher Time will tell I guess.
Sunshine
Unsure at this stage if it is a case of the more I know the more I expect, or if the service is actually getting slacker especially considering their fees are getting higher Time will tell I guess.
Sunshine
Ouch! So far I've got one great PM, with all of the properties.
Soon I will branch to Sydney and Melbourne and I would hope in the long run that I wouldn't have more than 2 PMs in each capital city. I'm only buying close to CBDs so it's probably easier to get 1 PM to manage a lot. I imagine that if I had properties in remote areas (eg. Macleay Island), I'd need a PM for each one, simply because it wouldn't be worth it for the inner-city agencies to go out there.
Actually I once asked an agent from Metropole about the situation where you just have too many properties for one PM to manage and she said basically that PM would then delegate to other agents within the organization, but still be the one that is ultimately responsible for your portfolio, so you still only have 1 contact that you go through, even with hundreds of properties being managed. I imagine Pro Rentals (where I am now) would do the same thing.
Good luck with the PM search in Syd. I hate generalisation but here goes:
Save your 7.5% and get a forumite or relo to do it for you. Better still, fly out here and run it yourself. These days if you have an IP within 10km of CBD, all the 20 year old PM (prob still at TAFE) will do is show up 20mins late for the inspection when 30 potential applicants have been queing outside for the last hour, bring only half a dozen application forms and pretend to be interested when answering questions about the property. Then on Mon/Tues, take the first 3 applications to the landlord to decide, a couple of quick checks and move on to the next. Too easy! But what about the other 30 potential applicants? What? No follow up calls, waiting out the lease period, a bit more investigation perhaps?
A lot of out of town investors have no idea how bad their PMs actually are. These young PMs are simply doing their time for the much sought after sales position where the comms are considerably greater than running the rent roll. Where average unit sells for $500k+ and homes for $1M+, who wouldn't want to get into sales??
They work the PMs like dogs, some managing over 100 IPs. How would you expect to receive an adequate level of service? Contrast that to open homes where potential buyers are serviced by the main appointed agent, 1 or 2 assistants and sometimes even the principal present, all dressed up in their shmick suits, provided by us property owners, with their BMWs parked out the front. Makes me want to puke!
Thanks, but let's take a step back for a second... I said I was "looking forward to having hundreds". I doubt any relo is going to cut it, and I'm certainly not managing them myself, especially that I don't live there. I try not to sound like an ad for pro rentals or metropole, but if neither of those two companies can recommend a good PM then I don't think there's much hope for anyone. Pro rentals is only brisbane at the moment, but when the time comes to buy in Sydney, I'm certainly going to ask their opinions of Sydney agencies.
I suspect if you have more than, say 10 to 20 IPs, then the looking after the IPs will actually taking over your life, and doesn't leave much time for other more enjoyable things such as spending time with your family.
Well managed it doesn't need to take much time at all....with or without PMs
I disagree, but if you're worried about it I guess you could always trade up to another commercial building every time you reached 10 houses. Unfortunately that'd go against the do-not-sell mantra.
What about a PMM to manage all your PMs so you only deal with 1 or 2 people? I'm sure that must be possible (Even if you simply advertise the position as a 'personal assistant' and then in the interview ascertain how much they know about property investing and keeping records).
It's all smoke and mirrors - most agents are making the average wage or less.
They get an advance on commission as a retainer - and it's pathetic - something like $350 per week from memory, then they have to repay that retainer back out of their sales commission. Some get nothing other than the commissions.
If the agent is both the selling agent and the listing agent, he/she will receive around 75% of the commission; the rest goes to the Agency.
If there is a different agent who sells the property to the listing agent, then they split the 75% commission.
So, on a $500k house, at 2% commission, they will split $7,500 = $3,750 each.
The average agent would sell 1-2 houses per month.
I know an agent in Frankston who was selling 2 houses per week a couple of years ago, but they were all properties around the $150k - $300k range. Lots of work for bugger-all money.
Yeah, careful - some of those cows are moochers!!
sorry, was waiting for Geoff to jump in
Yeah, careful - some of those cows are moochers!!
sorry, was waiting for Geoff to jump in
No Bull?!
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