potential home business ... feedback please

[lizzie]

i was going to revive the "home business" thread - but it had gotten a bit off topic in sections and died a natural death ... so ... i was racking my brains for a business that i can run from home, in the times that suit me, be my own boss (to some degree), employ others to take up any excess who can also work from home under the same situation as i wish to, yet still work in an associated industry that i enjoy (property investing), and a business that has potential to grow.

my pm has just lost her assistant and is covering the excess herself - to great stress - and i have put the feelers out there for a part time job, but on second thoughts i'm not wanting to work weekends, out of school hours, i want to still be available to do my own property investing as required and go to school for juniors' "special" activities.

so, to throw a thought out there (and don't anyone in newcastle pinch it!) i was orginally thinking of setting up a pm business ... but then thinking further about the concept i realised that perhaps setting up a business doing only one specialised factor of pm-ing might be the go - primarily property inspections as these are time consuming for the pm, have to be done regularly yet are not really income productive (asides from making sure the property is being looked after).

the train of thought (which is still very young) is that the pm's i contract to would send me a list of inspections required over the following month, i would send out the letter (on their letterhead) advising tenant of date of inspection - i'd co-ordinate areas/agents to be time and travel efficient, pick up the keys from the pm the previous day for inspections and return the keys the day of the inspection. unless there was an irregularity (such as major damage or something requiring immediate attention) all agents would receive written reports each friday via email attachments. fee would be a set rate - yet to be determined, but would have to be reasonably low to make it viable for the pm. i'd make easy money on the easy/close inspections, which would cover for some of the more difficult/longer/distant inspections.

basically i'd do inspections monday to thursday (as required) and spend friday doing up reports.

all i would need is a computer (have), printer (have) and efficient car (have).

if demand outstripped supply, i could always outsource to other mum's who wanted to work in similar family friendly circumstances.

thoughts?

i wanted to get a bit of feedback before taking my pm to lunch and running it past her for her opinion.

another option would be to take over maintenance issue for several pm's - getting quotes and arranging repairs - as this is also very time consuming for pm's. but i do prefer the inspection option.

 

[tubs]

Sounds like a good idea personally. I imagine that inspections would be a real pain for the agents. So much mucking around organising times, writing up the reports etc.

 

[sue78]

sounds like a good idea in theory....speak to your pm. although rentals are managed by pms, they usually still have a boss...the owners. so you would need to get the owners onboard with your outsourcing idea.

most landlords want a personalised service, when agents start outsourcing it can get a bit inefficient when there are too many people to go though for things to get done and questions to be answered.

 

[Belu]

i guess it depends on the pricing structure, what rate are you thinking?

lets assume:

1 hr inspection time (including driving time)
30 min time in arranging the inspection and picking up keys
30 min report writing and delivering
15min of attributed admin time

comes to 2 hrs 15min all up per inspection. $100 per inspection is pretty much $40 +GST an hour.

Is this a viable time frame?
Is this a viable rate?

2.25 hours = about 10 inspections a week given your availability so a possible $1,000 +GST a week in revenue. (petrol and car running costs would increase though)

 

[Property WA]

Hey lizzie,

I've often thought - why on earth is there not some company like a 'We-find-work-for-mums' recruitment agency given the extreme shortage of employees and large amount of mums who wouldn't mind working a few hours each day during school hours.

Anyway - hope this idea works for ya.

One thing I might add...

I've read quite a few of your posts and based on that, you come across as a rather astute property investor - why not sell that as part of your offer to PM's. I.e. they might be able to use it in in their adverts/promos to prospective home owners as a 'value add'. Like 'your property will be inspected by a professional investor who doesn't just talk the talk but walks the walk. You get an investors eye and opinion''

In that way - you can sell it to a PM on 'save time, hassles and headaches' plus a 'point of difference and way to increase figures'.

Just a thought but I think the more you can be seen to save and benefit them, the better.

 

[skater]

Using the above numbers, then the costs to the R/E could be too high, unless they are grossly understaffed. If they have plenty of available staff, then it would be a simple job to let a junior do the inspections at a greatly reduced cost to them.

Talk to your PM ( and maybe a few others) & get a feel of what their opinions are on the subject.

 

[marg4000]

As an owner I would not be keen on this idea. When we get an inspection report, if there is something of concern or interest I like to speak to the person who actually saw the property. I also often contact the agency just after an inspection to get a "feel" of how the property is going, and to talk about any improvements or maintenance that may be needed in the future. I am not sure how having another person involved would work out - it would be no point in discussing the property with our PM if they had no knowledge of what was going on. I prefer to deal with one person.
Marg

 

[Belu]

what about just being a PM? with little to no overheads you could charge quite a competitive rate. Say 5% + 1 week for letting? get 50 homes and let one a week with an average of $250 rent/week it comes to $875/week?

 

[JoannaK]

as a landlord I don't like the idea. I like to be invited to the inspection so I can have a look around too. that would also mean that my fees would probably increase as generally inspections are included in the management fees.

as a r/e agency owner, I don't like the idea. security is an issue, ie handing out keys. there is an issue in that a PM's job is to know the property and all it's little idiosyncracies and i believe that the only way to do that is by the PM doing their own inspections and engaging with the tenant.

 

[softmonkey]

also PMs already outsource its called the junior agent or trainee, sending the new kid to the easy inspections to learn the ropes. not saying it not a good idea but they are the things you will be competing against.

 

[Debt Junkie]

It wouldn't bother me if my PMs were to outsource inspections, as long as it was to a reputable person, with appropriate skills.

Another job suggestion - you might want to consider consulting with investors and/or home owners on quick reno's that could add value to their properties?

Lastly, re the billing, you mention being time efficient in your post? So I would assume you'd line up a series of inspection to do back to back, that are geographically close to each other, saving time etc, and costing less per inspection.

I still don't know how the cost will compare to an agency completing inspections with in house staff, but if you were developing an argument to put to a PM on why they should hire you, I'd definitely including the savings to the agency through their reduced overheads. ie, it's not just staff salary that would be being saved - it's telecom, electricity, stationery, an extra pc, reduced payroll tax, whatever - all the bits and pieces that go with supporting their current in-house staff.

Good luck! Love to hear what you decide to do!

DJ

 

[Belu]

what about maintaining gardens on more up-market rentals? would be something that can be done in spare time, dont need keys to the place and will be a value add that will be worked into the rental on those properties?

 

[Rainshadow]

I agree with Jo Anna, as an investor and also as a PM. I like to inspect properties myself so when owners call up I know exactly what I am talking about. I don't think the Agency will go for it as the costs don't add up.
HOWEVER what about doing Property Conditon Reports? Quite a few agencies outsource these I know. And they charge more for these than just a regular inspection, so more likely to be able to afford to outsource it.

 

[lizzie]

thanks for all the great feedback folks. it is still an idea i'm tossing around as i don't know if i will yet have the "time" to work outside the home next year - we've got a development going to council next week that i hope will be progressing early next year, some serious reno's at home and i want to get a lot fitter than i am now (which means more walking with the dog!)

i do like the idea tho - and the property condition report is a great option.

i was thinking in terms of around $30/inspection as, as pointed out, i would work them back to back for specific areas. some will be 10 minute jobs and others could be half an hour onsite - lose on the overpass make up on the roundabout, as long as there are more roundabouts than overpasses!

still tossing - and could be a good idea for others out there. i don't want to do the full pm thing atm as i don't really want weekend and night time calls/panics to advise the plumbing has gone ...

gardening could be good - i love to garden. i'll run it pass my pm when she's not so busy ...

 

[Belu]

have you thought about being a buyers advocate? possibly a good set rate rather than a %? You obviously know what to look for and what to look out for in a property, why not use all your studying and so forth to help others and get paid for your knowledge?

All the research of properties and so forth can be done in your own time as well.

Food for thought.

 

[lizzie]

still going ... i ran it past my pm today and she was hesitant as first for the very reason noted above (not having finger on the pulse etc), but then she realised that some agencies are already "contracting" out by having their inspections all done by one of the franchise group in the area, instead of spreading over several of the franchise. when i explained the potential process in full she then started to warm to the idea, and then got very excited when i mentioned condition reports.

i'll do some more behind the scenes work before the end of the year - need to work out the processes, download computer programs, standard forms etc.

i had thought of buyers agent, and discussed it at length with a property investing girlfriend, who is in a similar situation as myself, only last week - but neither of us felt comfortable with putting ourselves "out there" in regards to financial decisions for someone else. just a personal thing. thanks for the thought anyhow.

now for some more brain churning ...