[RANT] It's time of the year again, late payments :(

I don't own anything in an area with a median under 350k.

 

to be honest, id rather have a portfolio of for arguments sake
20 ips, returning $100kpa profit, porfolio value $X

vs

3 Ips, returning $70k profit, portfolio value $X

its all about ROI, yield, and it doenst matter whether you pay 20 or 3 council rates,

if the rates go up by 3%, your net council rates will go up too, all things being equal

 

What hasn't been added into this equation is your own time.
A PM is great. If you can find a decent one. That is a battle in itself!

So if i could find a PM who without fail could find me tenants with low turnover, pay rent on time, look after the place, i would go for 20 ips returning 100k.

However then reality sets in and I realise, no matter how good a PM, in a lower socio economic area, the odds are against them, in that instance, i would rather 3 IP's returning 70k.

A 30k in after tax terms in that tax bracket is $11,250 or $216 per week. I'd happily trade spending $216 less per week while holiday somewhere in exchange for not having to worry about tenants not paying rent.

People keep talking about numbers numbers.... but the one number they forget to include is their time.

 

I do . I also own property in suburbs where the median is over 1 mill .

What does that prove ?

mmmm

It proves that you're not in a position to make informed comments about the issue of buying in cheap areas ...

Cliff

 

It proves you are super human at finding deals and property managers while the rest of us are mere mortals.

 

It just means that over the years I've listened to the advice from more experienced members , I keep an open mind to other opinions outside my own and I try to add to debates based on my experience , rather than my prejudices and come up with my own conclusions . As I've benefited from listening to others on the forum , I'm prepared to spend time giving advice to those coming through who may not be as experienced , and I will question those who don't know what they're doing , or are basing their opinions / advice from a position of lack of knowledge.

I thought we were meant to be here to share and learn .

When I'm looking for deals , I keep looking until I find one .

When I'm looking for PM's I ask opinions of people who have properties in the same area , I interview potential PM's and if one turns out to be crap , we change .

It's called research and hard work . It's not super human , though it might be beyond some people.

Cliff

 

I think you have just gone off on a tangent here. No one is bashing you're methods. I just made a comment that once I decide im done I want an easier life dealing with less tenants. Doesn't matter how good you or your PM is or how good you pick areas more tenants equals more headaches and I hardly have any headaches compared to others but I want less once I am done.

That's all I said. Nothing else.

 

@See Change What would be your main criteria to find cheapies with low maintenance?

 

Don't sweat it. If you've got insurance in place, you can deposit this back into the buffer. That's the whole point of having one, because there are times when it's needed.

To be honest, we haven't had an issue at Christmas time for several years now, although we do have a lot of long term tenants and PM's who let them know their responsibilities over the festive season.

We've had a few tribunals, but it's no skin really. The PM does all the work.

We;re retired & holding much more than 10. It's no big deal really.

Yes & no. I have some really great PM's who let the tenants know, in no uncertain terms what is required of them. While a great PM can't solve all problems, I find them invaluable, and have had very few drama's considering the number of years/properties we hold.

We hold plenty!

 

Agree. I was dead set against regionals from looking at my sister's experience but by reading the forum I have opened my eyes and I see that its not all bad. Just gotta buy in the right locations and compare those possibilities to other alternative options I have...

 

Good solid properties , with sensible layouts in reasonable / good positions for the area . The reality is you need to look at a few to get a feel for the area , what's acceptable , what's not . When ever we've bought cheapies , we usually find there will be some issues that need attention , but that seems to settle down after a year or so .

Every few years , things will come up , but that's the same with most properties .

Cliff

 

Agreed 100%. It can take a while to find a good PM, AND good tenants, I have a few in less than ideal area's, and I was vacant for a while until I did find what we believed to be decent tenants. Now I have some of the best tenants I have ever seen, not to say they wont default on rent but when you talk to them during an inspection you can just tell they have their lives sorted and are unlikely to have any issues in regards to my house. I had 2 places vacant for 2 months whilst waiting, however both sets of new tenants are long term from their history, they keep the property in immaculate condition, don't have endless silly requests to the PM, so for me 2 months vacant after purchasing the house is not ideal but sure beats tenants who are late with rent and don't look after your property and cause problems. If your long term then the lack of headaches from you PM is worth the wait IMO

 

Quick update for NSW property

Court release mid-Feb. Property manager drove outside the property yesterday and she said they seems to be having a party (4 cars outside). What gives? Party all you want (keep it civil and don't damage the place), but my rent please...

She said most property vacant about 3 weeks there. So fingers crossed we have this sorted asap. This new PM (a replacement of the old PM, same agency) has been great so I'm happy on that side

 

Another update

One of the tenant finally pay up rent to date - now to chase water bills and make sure the tenant is on time, all the time

The other property is empty now and has been advertised for rent for at least 2 weeks - not good news so far

 

Good fun.
Hope it all works out for you.

 

I had a pretty good xmas/nye run. Only two tenants got behind and made it up by end of Jan. Year before was a pain.

 

I haven't had any tenants break their lease early for a while, knock on wood.

 

+1, Cheapies and rough areas=more maintenance, higher chance of problem tenants, rent arrears etc etc. You can have the best PM in the world but the problems of rent not coming in or repairs still is a headache you have to wear.

I see investors very often don't take these additional costs in both time and money into account.
Given the same/similar worth and rental return I'd ALWAYS take fewer higher quality properties over a higher number of cheapies.

 

yes they can be a pain, but, if bought right in a rezoned area for multi development, perhaps waiting to score/include the block next door, better to get an income towards mortgage from the old shack than sit vacant?

 

Having a good PM is a good idea, not managing yourself.
Finding a tenant with a job is a good start as well.