Landlord experience - in Tenant years

[Deltaberry]

Interesting topic. Not sure if that's the right way to look at it. Worked out to be 68 years in 3 years.

I'd agree the true measure should be how much $ you made in how many years. What's the point of managing say 10 properties for example and they all lose money...

 

[Dazz]

Dazz, wouldn't Tenant Dollar Years be more appropriate?

....for what, being a knowledgable experienced Landlord ?? No, I don't think so, although it could be argued both ways.

Having say 3 expensive houses gifted to you when your parent dies, then shuffling them all off to PMs for 30 years, with no involvement from you....would not make you an experienced knowledgable Landlord, IMO.

They may have made bucket loads more than say a hard grafter out in the 'burbs, who in the same timeframe managed to scrape together 10 or 12 units from nothing. They would need to know almost every trick in the book to survive and hold what they have.

 

[Dazz]

the true measure should be how much $ you made in how many years.

...can't argue with that....but then, that has been done to death so many times on this forum no-one would respond, and it's far more confronting.

One must remember, this game we all play is socially unacceptable to speak of. Most things about it are frowned upon, especially in tall poppy cutter Oz.....but none more so than the actual results achieved.

Probably best we stick to time, rather than $.....you've seen what sidetracks have occurred just restricting the conversation to time. Heaven's to Betsy, dare to introduce dollars into the mix and all hell will break loose.

 

[Piston Broke]

Obviously the question was your experience as a Landlord, not a PM. Being a Landlord starts the day you purchase an IP and only stops when you sell it.
Outsourcing the PM duties is only one of the tasks a Landlord needs to accomplish, if they choose to do so.
You cannot possibly outsource being a Landlord. You either are or you're not. You either own the property or you don't. You only need to read the fine print in any Management agency contract to realise you cannot outsource the responsibility of being a Landlord....and all that that entails.

Well there is a difference between the experience of owning a RE investment and the experience of being a land lord.
Yes you can contract out most of work type experience, but I agree not all of it.

Having a good Tenant doesn't mean you stop being a Landlord and gaining valuable experience.
Managing useless and/or useful PMs also doesn't relieve you of the task of being a Landlord.

Agreed, but it does make the experience much closer to an investment experience rather than a land lord experience.
If I purchase an RE investment (and never set foot in it), earn a good net ROI, then sell after 6 yrs without ever seeing it or dealing with tenant issues other than an initial contract, then does this give 6 years land lord experience or 6 yrs RE investor experience?
This is not a hypothetical. I actually forgot about it for almost a year until the accountant asked "did you sell XYZ?" and I noticed 25k in the account. It was my most bizarre (and awesome) moment as an RE owner, and one I hope to repeat soon.
It's not really such a simple question.

 

[MIW]

Interesting!
Mine is 557 in 12 years (I hope I calculated it right)....
Like most had issues but nothing major as such....and paying for all someone else to do it.

By the way do we add any properties we sold? I didn't add these....

 

[alplant]

Interesting, only 22 years here, which I noticed is the second highest group.

We were slow starters, well into our 40's, both starting again from failed marriages. We bought our first property 14 years ago for a song. It has been very good to us. Bought one more six years later, and it's been good to us too, looked at a few others but one thing or another stopped us from actually buying. We probably won't buy any more now, getting too close to retirement. Well I'm already retired, hubby will be soon.

Over that 14 years we have dealt with four or five different real estate companies, and God knows how many property managers. Tenants changed on average every 18 months or so, some more, some considerably less. I've lost count now, but we have had a variety of tenants, from young people sharing a house to families to retired couples, with no major dramas, never been to the tribunal - yet.

 

[skater]

Interesting!
Mine is 557 in 12 years (I hope I calculated it right)....
Like most had issues but nothing major as such....and paying for all someone else to do it.

By the way do we add any properties we sold? I didn't add these....

I don't think you've done the calculation correctly, or maybe I'm missing something.

After reading your interview (good job, btw) it seems that you have 14 properties. If you had held all of those 14 properties for the entire 12 years, then you would have 168 (14 x 12). If, on the other hand, you built your portfolio as you went then the first property would count for 12 years, the second for, maybe 11 years, the third for perhaps 9 years, etc. Then you would add the total for each property to get your combined total.

This is not a critisism, as you have done very well. Or, like I said, maybe there's a huge amount that I missed that needs to be added into the total.

 

[laurencei]

If you had held all of those 14 properties for the entire 12 years, then you would have 168 (14 x 12).

No - it would be 1260 years (1x12, 2x12, 3x12, 4x12... 13x12, 14x12)

 

[wobbycarly]

No - it would be 1260 years (1x12, 2x12, 3x12, 4x12... 13x12, 14x12)

Disagree - (1x1 + 2x1 + 3x1 + 4x1 + .... + 13x1 + 14x1) = 105 if purchasing 1 IP per year, for 14 years, which wasn't actually the case. 14 properties for 12 years = 14x12 = 168. So the 'real' number is probably something between 105 and 168, unless there were multi-tenant properties, which MIW hasn't mentioned.

 

[handyandy]

No - it would be 1260 years (1x12, 2x12, 3x12, 4x12... 13x12, 14x12)

Hi Laurencei

You might just want to recheck your earlier posted number of years as you have a major error in your calc. Seems the calc you used is a probability calc - maybe you were trying to work out the probability of a tenant being a good tenant - its a big number.

 

[Dazz]

No - it would be 1260 years (1x12, 2x12, 3x12, 4x12... 13x12, 14x12)

Please refer to the initial post ;

How to work it out ;

If you bought your first investment property in 1982, your second (a duplex) in 1992 and your third property (a quadraplex) in say 2006....your experience would be calculated as follows ;

(1 x 30) + (2 x 20) + (4 x 6) = 94 years.

Please note the plus signs in the equation. Wobbycarly is correct.

 

[INVSTOR]

I think you should get 20 bonus points/years if you can work out the calculation correctly.

 

[Dazz]

Note well : If this level of Yr 7 / 8 Maths intimidates or confuses anyone, please don't attempt to be a serious Landlord.

You are going to need stronger maths skills than that to successfully go up against your contractual opponents like big Tenants and big Bankers.

 

[laurencei]

Note well : If this level of Yr 7 / 8 Maths intimidates or confuses anyone, please don't attempt to be a serious Landlord.

Please refer to the initial post ;
Please note the plus signs in the equation. Wobbycarly is correct.

The issue isnt the plus signs - its the example. It looked to me like Dazz was saying the number of properties is weighted against the years you own it.

So I thought the formula was (Property Number x Years)+(Property Number x Years)....

your experience would be calculated as follows ;

(1 x 30) + (2 x 20) + (4 x 6) = 94 years.

But now I see the formula is (Property "duplex" x years)+(Property "duplex" x years)...

personally I like my formula better - gives credit to people that hold alot of properties for a longer period of time

 

[Dazz]

personally I like my formula better

Hmmm,

Unfortunately, your formula breaks every internationally agreed maths convention of BIMDAS.

Your formula ignores the importance of the brackets, which must be recognised as the first operation to take place, before any other calculation can take place. Hence the 'B' at the front of BIMDAS.

If you choose to ignore the brackets and start making your own maths laws up by calculating some other step first, you obviously end up with nonsense figures such as you have produced.

They teach BIMDAS in grade 3 or 4 I believe.

If you're happy with breaking maths laws, excellent, go for your life.

As they say, ignorance is bliss.

 

[laurencei]

Hmmm,

Unfortunately, your formula breaks every internationally agreed maths convention of BIMDAS.

Your formula ignores the importance of the brackets, which must be recognised as the first operation to take place, before any other calculation can take place. Hence the 'B' at the front of BIMDAS.

If you choose to ignore the brackets and start making your own maths laws up by calculating some other step first, you obviously end up with nonsense figures such as you have produced.

They teach BIMDAS in grade 3 or 4 I believe.

If you're happy with breaking maths laws, excellent, go for your life.

As they say, ignorance is bliss.

sigh - re-read my post and my formulas/calculations again.

The maths + operations I used is right, I just used a different value for what you called "duplex". It has nothing to do with brackets.

I assumed the first number was the property number.

i.e. I own 6 properties, so my formula is something like:
1x10, 2x7, 3x6, 4x5, 5x2, 6x1 = 78

but they are all single houses/units, so under your formula it is:
1x10, 1x7, 1x6, 1x5, 1x2, 1x1 = 31

Hence my statement of "my FORMULA is different"...

edit: at the end of the day - I got it wrong - but not due to my maths, just due to mis-reading your initial example and using a different formula.

edit 2: I still like my formula better - it does give credit to people who own multiple properties for longer periods of time...

 

[JIT]

69 years for me in residential over 7 years.

 

[jaycee]

Note well : If this level of Yr 7 / 8 Maths intimidates or confuses anyone, please don't attempt to be a serious Landlord.

You are going to need stronger maths skills than that to successfully go up against your contractual opponents like big Tenants and big Bankers.

Is that advice a piece of advice or an insult ?



Does one have to sign up to the insult part of the forum, or are insults given free to everybody ?

 

[Dazz]

I own 6 properties, so my formula is something like:
1x10, 2x7, 3x6, 4x5, 5x2, 6x1 = 78

but they are all single houses/units, so under your formula it is:
1x10, 1x7, 1x6, 1x5, 1x2, 1x1 = 31

...can't you see that the bottom method makes sense and the top formula doesn't ??


Your first property that you've clearly owned for 10 years and is a single Tenancy, accounts for 10 Tenant years. That's taken care of by the 1x10 first term.

If you use your top formula, you count it for 10 Tenant years in the first term, then double it up and count it for a further 7 Tenant years, then triple it up and count it for another 6 years, then lump it in again and count it for a further 5 years, then lump it in again for a further 2 years and then again for a further 1 year.

So your one Tenancy held for 10 years gets counted with your method for ( 10 + 7 + 6 + 5 + 2 + 1 ) = 31 Tenant years which is not correct.

That is why your total is 31 Tenant years.

In contrast, someone who owned a simple block of four flats for 8 years and nothing else would have 32 Tenant years of experience. Cumulatively, they would have dealt with a larger number of Tenants over a longer period of time, hence their larger number, despite them having 8 time years of experience and you having 10, and despite them only having had 4 Tenants and you 6.

You graph would look similar to a staircase profile. Theirs would look like a fat block. Tenant years is simply the total area of the shape.

 

[laurencei]

...can't you see that the bottom method makes sense and the top formula doesn't ??

...

You graph would look similar to a staircase profile. Theirs would look like a fat block. Tenant years is simply the total area of the shape.

I guess your topic is "landlord experience".

If the topic was "property investment experience" - then perhaps mine would be more relevant, as it gives credit for people owning multiple properties for longer periods of time, and weights multiple properties higher.

But if we go with 'landlord experience' - wouldnt it be fair/needed to weight people who self manage vs those who have property managers?

i.e. I've never self-managed. So how can my "31 tenant years" compare to a landlord who has self-managed that entire time - their "31 tenant years" would be 10 times what mine is?