Has your property investment warped into a property management business?
As an investor with a property portfolio, you view the world differently. Whereas most people look at a house and see a home. You see a box that makes you money. An asset that offers the benefits of leverage and a return on investment that stock market investors would die for. When a new build apartment block is built, what you see is a business opportunity.
You’re interested in different things to the run-of-the-mill landlord. Your concerns are the return on investment, tax reduction, and, of course, lifestyle. The last thing you want to happen is your property portfolio to turn into a full-time property management job. For many people in your position, that’s just what happens. Instead of being a business owner, they become the entire business; and that business becomes property management instead of property investment.
Here are three reasons why your property portfolio might be the full-time job you never expected it to be:
You’re still acting like a startup
When people first start out in business, they tend to do everything themselves. It is only natural. After all, money is tight, and it’s important to keep a grip on the purse strings.
Property investment is the same: at first; you might want to do everything yourself. From researching a property investment opportunity, through directing the legal side, and then on to finding and vetting tenants, you’ll do it all. With the first tenants in place, you move into property management, too, and you discover that the income and capital growth are worth all that initial effort.
The problem is that as your property portfolio grows, you carry on doing all the day–to-day work of the business – the property management side. Eventually, the business owns you and because you spend so much time on the property management, you start to miss investment opportunities.
And with one nightmare tenant, suddenly you become embroiled in the legal side of evicting bad tenants − a situation that could take months to resolve.
If you’re still acting like a startup, you’ve given yourself a full-time job you never expected to have.
You’re not confident you made a good property investment
When you get into this position, while you still have the ambition to grow your property portfolio, you have less time to commit to researching the best opportunities and conducting full due diligence. One poor investment convinces you that you have to spend more time, not less, on the property management side of the business. After all, it couldn’t be that it was simply an investment that went wrong – there has to be more to it than that, right?
This lack of confidence lashes with the results of previous success and combines to put more pressure on you. That manifests itself in chasing property investment and making increasingly less profitable decisions while trying to correct mistakes by spending even more time on property management.
You don’t trust others with the management of your property portfolio
A trait of businesspeople that get so far show tremendous promise and potential but never make that final leap. They find it hard to trust others to do as good a job as themselves.
We’re all better at some things than others, and in most things we’re happy to give responsibility over to others. I’d never build my home, for example, although I’d be glad to project manage the build. Leaving the bricklaying, electrics, plumbing, and decorating to professionals who know their trade inside out.
Your property portfolio should be working for you. If it isn’t and your property investment has turned into a full-time job. Discover the reason why and take action to turn it into what you promised yourself it would be when you first started out: a box that makes money.
Please feel free to contact us by phone +44 1522 503 717 for information about our services.
Yours in effortless property management,
Brett Alegre-Wood MARLA MNAEA