Are you a landlord or an investor? Understanding the difference between the two mindsets is crucial when it comes to your approach of your property portfolio.
A Landlord’s Duty
Landlords are part of the day-to-day management; answering tenant phone calls, organising maintenance, maintaining updated spreadsheets, dealing with rent arrears, providing viewings, reference checking, keeping updated about latest law amendments…the list goes on.
Portfolio Limited By Your Time & Ability To Manage Multiple Properties
A common drawback to self-managing is being restricted by how many properties you’re able to handle in your property portfolio. Based on time availability and stress threshold, many landlords feel they can’t handle more than 1-2 properties in their portfolio, significantly limiting their investing potential, because the key to portfolio growth is focusing on buying, improving and financing.
You’re Limited to Investing Within Specific Area
Self-managing landlords tend to only invest in their local area. The basic logic makes sense, but only investing in one area does increase location risks, and even though you like the area doesn’t necessarily mean it’ll be popular with tenants.
An Investor’s Duty
An investor doesn’t have to be a landlord. Handing over the day-to-day management to a property manager takes away time-consuming interruptions from your full-time job and free time. They do all the hard work for you, and ensure your property is compliant with law changes.
You Can Spend Time Growing Your Portfolio Faster
A hands-off approach allows complete focus on expanding your portfolio without getting distracted by the day-to-day details of management each individual property, and dealing with tenant enquiries.
It Reduces Location Risk
Hiring a property manager means you’re not limited to your local area. Live in Dunedin? Purchasing properties in growing markets like Wellington or Hamilton is now an achievable prospect. Widening your radar makes more opportunities available to you, and reduces location risk.
Your Time is Worth More
Consider how much your time is worth versus how much time you spend managing your properties. The table below says it all really.\
If you’re collecting $500 in rent weekly for example, is your time spent worth more than $1,480 annually? Plus, property management is a tax-deductible business cost, making it a practical and economical expense to help grow your portfolio faster and successfully.
Ask yourself this – do you want to focus on managing properties or growing your portfolio to its maximum potential? Do you want to be restricted to your local area? What is your time worth? By having the time to buy just one more property, will you make more in portfolio growth than the possible savings on property management. Deciding whether the landlord or investor approach is best for you and your portfolio makes all the difference.