Investor Rita has successfully created a seven-property portfolio with assets spread across Queensland, Victoria and South Australia. How does she handle the management of these properties from her home in New South Wales?
For starters, Ms Rita engaged property managers for each of her properties to handle common tenant concerns and other management processes.
The involvement of property managers has helped her maintain a hands-on approach even if she’s living and working full-time hours away from her chosen investment suburbs.
According to the investor: “Having a property manager that knows the area, that knows their tradesmen, that knows the ins and outs of managing a property is definitely a positive for us.”
“Without them, we wouldn't be able to do it. Working full-time and needing to grow our portfolio, not having that support, we definitely wouldn't be where we are today,” she added.
However, having to take care of her properties and her tenants from miles away is far from being the biggest management hurdle for Ms Rita.
For the investor, the biggest headache that she got throughout her three-year investment journey was accomplishing all the paperwork necessary to ‘keep up with the numbers’.
While the first year was a breeze, the struggle became especially magnified when tax time approached, according to her.
Thankfully, she had the assistance of her accountant in ‘trying to get it all together’ and making sense of all the numbers that make up her seven-property portfolio.
She said: “I felt sorry for the accountant, but he was very patient so I'm very lucky with that.”
“You just really need to keep on top of your numbers and it's just really important that you know what's happening with all your properties,” the investor added.
Her advice to fellow investors: Track your data actively.
While it’s easy to set and forget until you have to lay it all down come tax time, it is advisable to keep everything up to date consistently.
In order to have an organised way of collating all the numbers, the investor keeps a spreadsheet that details everything about her portfolio—from purchase price and loan amount to loan-to-value ratio, interest rates and rental returns.
This may seem overwhelming, but you don’t have to do it all by yourself, she said.
Aside from accountants, you can also continue engaging property managers to help in keeping your numbers up to date taking care of bills and payments.
Ms Rita explained: “If anything changes, from the rent perspective, interest rates, repairs, bills, you keep that up to date. One thing that we learned to do early on was to actually move all the payments of bills to the property managers. That's been a great help.”
“Obviously, you don't get the benefits of cash flow because you have to pay professional fees, but for the sake of ease of administration and empowering yourself to focus on more important things, it's a really good point,” the investor added.
While there’s no hard-and-fast rule about portfolio management, Ms Rita believes that any process can be refined if the investor is willing to dedicate time to it.
Even if there are professionals who can help you keep track of all the data involved in your investments, it is strongly encouraged that you understand how the processes work.
After all, as your portfolio grows, your ways of management also have to evolve.
According to her: “Time is the main thing, really dedicating time. I like to make time for administration whenever I get my statements from the property managers after the bills have been paid. It's either fortnightly or monthly.”
“When I do have the time, I block it out and focus on that,” she added.
Being able to manage her portfolio well and keep track of her progress eases her concerns about the unpredictability of property markets.
“At the end of the day, you just have to be able to say, ‘Okay, everything up to date. I have accounted for everything,’” the investor concluded.
Tune in to Ms Rita’s episode on The Smart Property Investment Show to find out how she intends to keep growing her portfolio in the next 10 years.