By Ben York
Rental Services Manager – Stockdale & Leggo
Koo Wee Rup – Phillip Island – Hastings
THE path to becoming a professional investor doesn’t end with buying an investment property and engaging the services of a local property manager, yet this is precisely where most investors stop, with one rental property, often in the same area as their home, so they can keep a good eye on it.
Professional investors, on the other hand, tend to take a more commercial approach to things and consider many more factors in their investment decisions.
Some of the important considerations for professional investors include rental vacancy rates by suburb (i.e., demand for rentals), rental yields as a percentage of purchase price, affordability and access to finance, likely direction and timing of future interest rate movements, applicable depreciation and other tax offsetting benefits as well as how the particular property will help them achieve their longer-term financial objectives.
One trend we notice regularly in the property management space is that of investors focusing almost exclusively on the day-to-day management of their rental property and not enough on what they need to do to get into a position to add another property to the portfolio.
It’s important to point out that I don’t blame an investor for thinking like this, it’s only natural when most of the communication you receive from your property
manager revolves around the day-to-day management, that you will focus on exactly that.
Traditionally, a lot of property managers have shied away from helping investors to grow their portfolios in favour of dealing exclusively with rent collection, maintenance, inspections and letting. The traditional real estate agency model supports this too, so it’s no surprise this trend continues.
The best-selling personal finance book in history, Robert Kiyosaki’s ‘Rich Dad Poor Dad’ repeatedly makes the point that to be a great investor you need a great team and that is where I think more property managers have an opportunity to step outside the increasingly commoditised property management space into a key role in the investment team of their clients.
Who could be better placed to advise investors on suburb trends, vacancy rates, current rental demand and myriad other factors that all need to be considered when deciding on the optimal timing for adding another investment property to their portfolio?
All of this is to say that my motivation for taking up a full-time role in an agency was not at all driven by a desire to manage inspections, rent collection, maintenance and letting as much, as I might enjoy it. Instead, my motivation is to help people move towards their financial goals through property investment.