Forum Replies Created
1. Yes, that’s important.
2. Not really, I’m happy with the posted statements.
3. Yes, but I expect the monthly and annual reports will be included in the management agreement
4. Yes and no, I look for best value, not necessarily lowest cost. I will pay a little more for reliability and service.
5. My goodness yes. I have been badly burnt by staff turnover.
6. Yes, this ties in with #1I have had experiences with a brilliant and a dreadful property manager.
The awful manager managed to ignore all the maintenance requests from our tenants without telling us over a 6 month period – but all the while blaming us for no repairs being done. Then when our wonderful long-term tenants gave notice to leave (they’d been in the house 7 years) we weren’t even told until AFTER they had vacated the premises. She was only 19 and I think was overwhelmed with the amount of properties to look after so her solution was to sweep the “too hard” work under the carpet. The only redeeming fact for us was that she forgot to deduct their management costs from the rental income before paying us. Of course, when we found out the tenants had already left and we fired the company she initially refused to hand over the keys until we paid the “outstanding” $4000 in back fees. Yeah, that’s not happening. I was furious, but considered it lesson learnt to take more interest in the property management.I also have another property manager I cannot rate more highly. He runs a small boutique agency focussing on property management, is always available and knows who we are when we call (that means a lot), and has a pool of dedicated tenants that tend to stay with him wherever possible. He is reliable and manages all the work, but it’s the communication that really sells it for me.
Thanks for your response Kinetic.
I feel a bit silly, but there’s still something fundamental that I’m missing in the concept of using equity to purchase a home. In using equity in lieu of a cash deposit you are in essence still using your own money for a deposit on a house, you’re just “borrowing” from the increased value in your current home to do so.
If that’s the case, how is it possible to amass a portfolio of properties given that borrowing capacity is still limited by the income you earn – which is a finite resource. If I’ve borrowed to my maximum borrowing capacity, then build equity through time or renovations, how can I use that increased equity to purchase another if my income has not increased? I still need to be able to service the debt. My medium term goal over the next 5-7 years is to have a passive income stream that is enough to cover all the mortgages including my PPOR, and to enable me to work because I want to, not because I’m dependent on the next paycheck coming in. My long term goal is to be able to retire at 55 and live off the rental income.
Thinking logically, I would guess that finding positively geared properties would help with cash flow and affordability, but they’re not easy to find and that’s not the best way to get good long term wealth. From all the reading I have done the best way to do so is to find a property with good capital gain prospects in a major city, but these are almost always negatively geared, or to find undervalued properties and renovate for profit. Given the large transaction costs associated with property (and my complete inexperience in any tradie work) I am not at present interested in flipping properties. I would like the warren buffet approach: to never sell (unless presented with an offer too good to pass up, but I’m not counting on that happening).
I guess the bit that I don’t understand is how to build a portfolio of properties without increasing your income or selling up to realise some cash profit.
