too many IPs

Evening SS'ers, just wondering if others have found a critical point of IPs where it becomes too hard to manage with a full time job. I am not talking about personally managing the IPs just managing the managers ?

I started thinking about my future goals and have been trying to work out when critical mass will occur.

Thanks

Logan
 
Personally I found that doing my tax returns was the biggest headache.

I wouldn't want to have more than a dozen IP's but the actual number would depend on my investment strategy and not on what I prefer.
 
When the properties start to get old, lots of repairs needed, upgrades, land tax being payable, loans low value compared to the value, yields low and yourself getting older then that is the time to consider slowly selling and investing in higher yielding EFTs with franked dividends.
 
Change your exposure - move to assets with higher risk, greater returns and fewer of them. Eg 15 x $300k properties or 5 x $900k offices/shops
 
When the properties start to get old, lots of repairs needed, upgrades, land tax being payable, loans low value compared to the value, yields low and yourself getting older then that is the time to consider slowly selling and investing in higher yielding EFTs with franked dividends.
I agree very much with this, never thought I would sell IP's but have sold a few the last couple of years. Have put funds into small business start ups and expanding existing small businesses rather than EFT's but the reasons for selling were similar combined with believing some markets were close to the top.

I have have a bookkeeper who manages my managers but it does get draining when you get requests 2-3 times a week for something or other.

If the property(s) have done their job and you can invest the funds in other opportunities that would have been previously unattainable then why not diversify the assets.
 
When the properties start to get old, lots of repairs needed, upgrades, land tax being payable, loans low value compared to the value, yields low and yourself getting older then that is the time to consider slowly selling and investing in higher yielding EFTs with franked dividends.
Yes I agree.
Or liquidating some residential properties and purchasing commercial properties with little debt (and higher yields obviously).
Thus having smaller number of properties but ones that return well to fund your retirement, no longer chasing the huge CG as in your residential acquisition and hold phase.
 
I have a substantial size portfolio spread across many states.

I dont find it time consuming at all. About 30 minutes per month and that's for data entry (of PM & bank statements) into my property management accountancy program. At the end of the financial year I run off a report and email it to the accountant.

I could completely outsource that too but elect not to because it allows me keep a finger on the pulse.

PM's takes care of all the day to operations and I oversee the PM's. It allows you to work on your portfolio not in it.

I've created systems for it all to basically run on auto-pilot. Building a portfolio is about leveraging my time as well as capital to build wealth.

The last thing I wanted to do was become a slave to my portfolio which defeats the purpose why I started investing in the first instance.

I hope this helps.
 
Building a portfolio is about leveraging my time as well as capital to build wealth.

The last thing I wanted to do was become a slave to my portfolio which defeats the purpose why I started investing in the first instance.
Well said Rix and it's also in the investor's best interests for a host of reasons, some of which you just outlined.
 
Yes starting the long process of selling now , reno one by one and selling .
Lucky enough to have bought many back in the early 90's.
@45 years of age there is more important things to do than accumulate when
you have enough to live very comfortably the rest of your life.
 
Loan application time would be fun if still working full time. My low end properties can be a bit labour intensive. Rent arrears, stupid requests, repairs. If I didn't have these properties then the passive investments wouldn't be time consuming at all
 
Loan application time would be fun if still working full time. My low end properties can be a bit labour intensive. Rent arrears, stupid requests, repairs. If I didn't have these properties then the passive investments wouldn't be time consuming at all



I agree with that, get rid of them, they have done there job, make life easier and stop having to deal with the tenants who occupy these type of properties.

Have the same asset base but not as many individual assets.
 
Evening SS'ers, just wondering if others have found a critical point of IPs where it becomes too hard to manage with a full time job. I am not talking about personally managing the IPs just managing the managers ?

I started thinking about my future goals and have been trying to work out when critical mass will occur.

Thanks

Logan
Hi,
I think this is a personal choice and preference, so in my case I do re-evaluate the portfolio and may decide to do some changes.
Yes, I actually decided to offload 2 bad eggs IPs, those I consider less performing, and are with separate agents and in different one common structure. This will permit to simplify things, but I do hire a bookkeeper to do the necessary paperwork, and I just deal with agents.
I use MYOB software for that purpose.
However, I would not make that a priority if coming across a great deal or great investment.
Similar approach could be used when dealing with number of properties too.
I suppose once you have a process and system in place it will become easier as yiu just manage the managers, others manage the paperwork.
 
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