I’ve just finished reading “0-130 properties”, & of course the idea of replacing my income with passive income from positively geared properties sounds great! I’m just worried that I may end up replacing one job with another (ie managing a property portfolio) albeit possibly a more rewarding & flexible one. Can anyone that has successfully bought enough investment properties to provide a passive income to support them let me know how much time you need to dedicate to keeping it all running smoothly, & what is your end goal? I’m just wondering if finding new properties & managing them becomes a new consuming passion, or whether the end goal is to eventually sell the properties & live off the proceeds or do you have to keep managing them indefinately? I realise everyone’s goal is different, but I just wonder how ‘passive’ the income really is when there is such a high level of risk & responsibility attached.
FM001
With all my IPs, I only manage the tenancy myself if I know the person involved (but this is probably asking for trouble). If you were going to acquire property in order to replace income, I would definitely use a Property Manager. This may reduce your profits, but if you select a good PM, then your can let them do all the hard work and the income you get will be passive.
Hi FM001,
A lot of investors have found the best way to streamline the process is to use the services of property managers etc.
There’ll always be the occasional management issue, but from here on in, it’s largely a matter of filing paperwork, and keeping the books up to date (something a book-keeper could do for a day or three once a month for example).
You might also find that there’s economies of scale – for example, it may take you (say) one hour a month to manage one property but probably wouldn’t take 130 hours (or over 3 weeks of your month) to manage 130 properties.
Brent
Looking after an IP yourself can be as time consuming as chaseing up a poor property manager from my experience. If you select the right property which requires little maintenance and is easy to rent out, then the hard work is done. However one bad tenant can do a lot of damage, that is why landlord protection insurance may eliminate some worry. I personaly beleve it is a state of mind as to how we approch investing for the long term (positive attiude or poor attitude).The rest just falls into place with good planning and hard work.[thumbsupanim]
JPD
Hi FM001,
Managing a tenancy yourself can be a rewarding experience and a great big learning curve. However, if your career goal is not to be a property manager then leave it to the experts.When your portfolio becomes sizeable enough you will learn to treat it as a business. You employ the relevant staff and/or professionals to do the day to day work for you while you concentrate on doing the deals.
Periodically you will need to reassess your goals to see if they are being achieved and whether or not you wish to create new goals or begin to consolidate.
eg when you accumulate 130 properties you may begin to take you profits and reinvest in fewer, but larger commercial properties. The theory being, fewer tenants then fewer hassles without affecting income.
In answer to your question, you can put as much time and effort into your properties and investments as you want in order to achieve your goals and within your personal comfort zone.
For me property has become a consuming passion and I will continue to shift the goal posts while I continue enjoying what I do. Time wise – a couple of days a month managing but 24/7 looking for new deals.
Cheers
JeffI would highly recommend you read Steve’s second book, “$1,000,000 in Property in One Year. I just finished it and highly recommend it. Given the change in the realestate market, you will get some great tips and stretching of the mind.
Regards
Tiger
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