Having bought the first investment property there may be a tendency to do things the good old fashioned DIY Kiwi way. Maybe a bit of painting or other
DIY, finding a tenant by advertising the property, conducting an initial inspection, being familiar enough with the legislation throughout the whole
process to be safe (tenancy application, tenancy agreement, bonds, what landlord and tenant obligations are) collecting the rent, checking that the
rent has been paid, routine inspections, dealing with emergencies, maintenance, daily rent reconciliations, monthly reconciliations, disputes, mediations,
and the list goes on.
As investors, it is very easy to think we can do everything ourselves and in the process lose sight of the big picture. Smart investors see their time
as a cost and that delegating the daily management of their investment property to a specialist is not only tax deductible but takes away some of the
risk. In this regard, most insurance companies require inspections to take place as outlined under their policies. If one of them is missed as a result
of the investor just being too busy and an issue occurred, there could be a disagreement regarding a claim.
Smart investors have realised that their time is best utilised at what they specialise in. Their time is better spent looking for the next opportunity
or if a property has been purchased with some blue-sky factor such a sub-divisible section; working the numbers and possibly developing the site.
How many DIY investors have actually calculated the cost of their time in property management? Consider $550 per week property with a professional property
management company whom charge, for example, 8.5% plus GST on all rents collected. That’s $2431 per year the investor pays before any tax...
