I have 8 properties, including my PPOR, and it doesn't seem like a hassle at all. Manage the cashflow and risks and most of the problems go away. I was originally shooting for 10, but have since realised that $$ cashflow targets make more sense than simply number of IPs. I may not buy any more IPs at all (or maybe I will).
when you have more than, say 5 properties ......
- Thread starter on the move
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When I started numbers were the focus, something to aim for, helps in the initial stages build a portfolio.
However if you focus on the numbers do you buy 8 properties for $100k just to get the numbers up or buy the "best" investment property you can afford regardless of the price? Should be the best in my opinion.
I now focus primarily on net equity and the income that can be generated off that equity in other investments.
For me numbers can help you get the ball rolling but should not be the main focus long term. My first 9 properties cost on average $90k and my last 5 $600k as my focus has changed.
As for having multiple properties and a life I think it is pretty easy. After you have a few just outsource it, i have a bookkeeper do mine and i have not paid a bill or spoken to a property manager in years. Yes it costs more but I hate that stuff and it would slow my progress if I was dealing with that rubbish!
However if you focus on the numbers do you buy 8 properties for $100k just to get the numbers up or buy the "best" investment property you can afford regardless of the price? Should be the best in my opinion.
I now focus primarily on net equity and the income that can be generated off that equity in other investments.
For me numbers can help you get the ball rolling but should not be the main focus long term. My first 9 properties cost on average $90k and my last 5 $600k as my focus has changed.
As for having multiple properties and a life I think it is pretty easy. After you have a few just outsource it, i have a bookkeeper do mine and i have not paid a bill or spoken to a property manager in years. Yes it costs more but I hate that stuff and it would slow my progress if I was dealing with that rubbish!
If you will have 50 IP, you sure can afford your own personal book keeper etc, to house keep all the records whilst you drinking tequila on a sandy beach. Just a thought...
I think you need to get your head around it a bit better Biggles ...for your sanity and lifestyle.
Yes, there is a lot of mail. Yes it is multiplied x whatever numbers of IPs you have. I have one of those wire rack file thingys sitting on my desk, OK it IS a BIG desk but with one file for every IP, every bit of mail gets opened and thrown in its file, never to see the light of day until the Accountant opens it and EOFY. Oh, of course I don;t self manage either, I just manage a couple of PMs - via email.
Yes, it can be a pain when all the rates come in at once, but I was thinking some time back that:
1. Problems don't go away just because you get wealthy
2. It is better to have the problems of the wealthy and try to find a few $K's every 3 months to pay the rates, than it is to wonder about where you are going to find $2K for little Johnny's dental work when you were poor.
QUOTE]
We have a few properties in Canada, and have found if we divide the yearly amount owing into monthly chunks, it is much easier to manage. Maybe you can do something similar? Even if you can't directly, can you pay bills online..with automatic monthly payments?
Our property taxes are due once/twice a year but they withdraw monthly from my bank...same with water,electric and oil bills.
Yikes! Based on many comments above, some people seem to make it a lot harder than it needs to be!
Properties really don't have to be that time consuming or troubling. You don't want the hassles then let the PM's handle it all for a tax deductible fee.
- No dealing with tenants.
- No maintenance runs at 5pm on Sunday arvo.
- No multiple lots of council rates arriving at all times and due dates.
- No multiple water rates arriving at all times and due dates.
Pretty easy:
- Occasional call from a PM regarding maintenance which involves a 60 sec conversation either giving them the go ahead or sending one of my guys around. 60sec x 3 - add an additional 60 secs if I have to make a follow up phone call to handle it.
- Once a year (or many years none at all) having a conversation with PM about prospective new tenants. 5 mins x 1.
- Monitor market rents every few months to make sure PM doesn't fall behind on increases. 2 mins x 4.
- One statement per year for land tax. 2 mins x 1 (and that's 2mins for all properties combined).
- One statement per year for ESL. 2 mins x 1 (and that's 2mins for all properties combined).
- Water and council rates handled by PM. 0 mins.
So that's a cumulative 21 mins, but let's exaggerate that to a very generous 90 mins per property including say end of year financial summary for the accountant per year? Not really that hard a task for the increase in your wealth surely? Or am I the only one who spends SFA time on his property portfolio once they're controlled?
Properties really don't have to be that time consuming or troubling. You don't want the hassles then let the PM's handle it all for a tax deductible fee.
- No dealing with tenants.
- No maintenance runs at 5pm on Sunday arvo.
- No multiple lots of council rates arriving at all times and due dates.
- No multiple water rates arriving at all times and due dates.
Pretty easy:
- Occasional call from a PM regarding maintenance which involves a 60 sec conversation either giving them the go ahead or sending one of my guys around. 60sec x 3 - add an additional 60 secs if I have to make a follow up phone call to handle it.
- Once a year (or many years none at all) having a conversation with PM about prospective new tenants. 5 mins x 1.
- Monitor market rents every few months to make sure PM doesn't fall behind on increases. 2 mins x 4.
- One statement per year for land tax. 2 mins x 1 (and that's 2mins for all properties combined).
- One statement per year for ESL. 2 mins x 1 (and that's 2mins for all properties combined).
- Water and council rates handled by PM. 0 mins.
So that's a cumulative 21 mins, but let's exaggerate that to a very generous 90 mins per property including say end of year financial summary for the accountant per year? Not really that hard a task for the increase in your wealth surely? Or am I the only one who spends SFA time on his property portfolio once they're controlled?
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I completely agree. We have several more than the quoted 5 properties and there is no real problem at all. I don't get it!
I'm fairly new too they property game too, only this year really we have gone from 0 ip's to 3 and we find it fine too deal with. We let the PM do most of the work, we take care of the bills just like any other, we have $100 maintanace no questions limit on each IP that the PM can play with. So yeah all good.
I'm still refining my finances, bank accounts etc to make it easier but its not that bad. I keep a diary and reminder for due dates etc, all payable from the same place i type this! Easy.
Hardest thing is doing the renos, as i do them myself mostly
Wandered slightly off topic I know
I'm still refining my finances, bank accounts etc to make it easier but its not that bad. I keep a diary and reminder for due dates etc, all payable from the same place i type this! Easy.
Hardest thing is doing the renos, as i do them myself mostly
Wandered slightly off topic I know
And what POINT or BENEFIT is there in acheiving this ?
Or is "beating" evryone else the acheivement in itself ?
What's the beef?
Just making an observation to put things in perspective.
The point is to hopefully show the original poster of the thread - and any newbs that are thinking they are not doing too well, that if you've got a few IP's and not more than 5, you are still doin' ok.
It's a bit of a self esteem builder I suppose; not really important, but it actually is to a lot of folk.
As for beating everyone else; I have no delusions that I'm even close to the best we have here.
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Yikes! Based on many comments above, some people seem to make it a lot harder than it needs to be!
Properties really don't have to be that time consuming or troubling. You don't want the hassles then let the PM's handle it all for a tax deductible fee.
- No dealing with tenants.
- No maintenance runs at 5pm on Sunday arvo.
- No multiple lots of council rates arriving at all times and due dates.
- No multiple water rates arriving at all times and due dates.
Pretty easy:
- Occasional call from a PM regarding maintenance which involves a 60 sec conversation either giving them the go ahead or sending one of my guys around. 60sec x 3 - add an additional 60 secs if I have to make a follow up phone call to handle it.
- Once a year (or many years none at all) having a conversation with PM about prospective new tenants. 5 mins x 1.
- Monitor market rents every few months to make sure PM doesn't fall behind on increases. 2 mins x 4.
- One statement per year for land tax. 2 mins x 1 (and that's 2mins for all properties combined).
- One statement per year for ESL. 2 mins x 1 (and that's 2mins for all properties combined).
- Water and council rates handled by PM. 0 mins.
So that's a cumulative 21 mins, but let's exaggerate that to a very generous 90 mins per property including say end of year financial summary for the accountant per year? Not really that hard a task for the increase in your wealth surely? Or am I the only one who spends SFA time on his property portfolio once they're controlled?
This is true,but many investors may not have the equity or cash flow to permit paying for a PM to charge for all of this, and would appreciate to know how others deal with it.
Every cent you pay a PM comes from your profit.It is also not just the regular fees the PM charges, you also have to consider when a PM contacts for maintenance/repairs to be made.
I would imagine there is nothing under $100 that a PM would charge the Investor. Changing a lightbulb would require paying someone a service fee plus the lighbulb.
Of course there is also issues with incompetant PM. How would the Investor know, if they weren't involved?
Being an Investor may mean delegating ...but you should also have a good idea what it entails.
I don't know exactly how to file my income taxes, but I do when my tax preparer has missed something. For years I did my personal taxes, but delegated the task of IP returns.
I got:
- My House
- The Outhouse
- The Treehouse
- The Cubbyhouse
- And I spent last night in the Doghouse
That's Five
In the game, Try and avoid:
- The Jailhouse
- The Poorhouse
Most defintiley ! If you're not concsious to what's going on.. your unconscious/subconciously doing it 0 not the best wya to be taking full responsibility for yourself as we claim.
Hopefully though, should I get to 5 or 5+ IP's, I hope to have a handle on twhat goes on and be in a position to monitor what I've delegated rather than have to do it myself for 5 resi ip's... however this is me thinking about tthe future, God knows how it will actually turn out, I may certainly beelive the opposite come the time and this could be wishful thikning and naiivety speaking.
The more you get the more management it is, but like anything the people who earn $1mill a year have more work at hand aswell.
For me the properties serve a purpose, and a section of fun therefore all good. I never look at buying a property for the sake of it thats were many come unstuck and lose money.
As long as you are hitting your own goals this is the main thing whether it be 1 property or 100 properties, the only people you should be comparing your results to are yourself. - Well I take this statement back there needs to be aspirations etc, but not point running a race with your head turned around looking who is behind you or looking ahead counting the ones in front because you will lose concerntration with where your game is at.
For me the properties serve a purpose, and a section of fun therefore all good. I never look at buying a property for the sake of it thats were many come unstuck and lose money.
As long as you are hitting your own goals this is the main thing whether it be 1 property or 100 properties, the only people you should be comparing your results to are yourself. - Well I take this statement back there needs to be aspirations etc, but not point running a race with your head turned around looking who is behind you or looking ahead counting the ones in front because you will lose concerntration with where your game is at.