How To Scale To A Multi-Million Dollar Property Portfolio
If you want to build a big-time property portfolio, you need to stop sweating the small stuff. b Invested founder Nathan Birch is often asked how he handles his bills, managing his tenants and so on. The short answer is that he outsources. Otherwise, how much time do you think he’d spend on admin with more than 230 investment properties? The same should go for you. If you want to scale up to a multi-million-dollar portfolio, you won’t have time to be a property manager as well.
Separate email inboxes
Nathan has set up a separate email address for his bills and related property documents to be sent to so that he doesn’t have to sift through thousands of regular emails to find them all. They are ready to go, all in one place and can be paid. He has a personal assistant to take care of that, but even if you are flying solo, you will save time with specific email inboxes.
The other tip if you really want to save some time, is to not pay your bills yourself, but have your property manager take care of them too.
Say you’ve got quarterly council, water, strata or even insurance bills, it might take you two minutes per bill to do them yourself, but it all adds up, especially when you start acquiring more properties.
Often, it’s as simple as ticking a box with your property manager and getting the bills sent to them. Everything needs to be systemised and process driven to be time and energy efficient. You’re not a handyman, accountant, or lawyer, so you don’t do those jobs yourself. Same goes with the management. Get the property manager to do it on your behalf and it will make your life a lot easier.
Working for $20 a week?
Some people work very hard trying to be their own property manager, all just to save around $20 per week. But it takes a lot to be a property manager. If you don’t have an intermediary between yourself and your tenant, they can contact you often, tie you down and take up a lot of your time.
If you’ve got five properties, saving $20 a week, and dealing with all those tenants, you’re trapping yourself and trapping your growth to try and save $100 per week.
But having a good property manager to support you will help you make sure your property portfolio is running like a business.
Equity, flow and finance
Other strategies that are important when scaling up are to make sure you use your equity well; that you’ve got the right team of professionals around you; that you have got cash flow management in play; and of course, that you set up your loans correctly and get your financing done right.
That last point is really important because a lot of people still get trapped in a corner. Their mortgage broker might get them buying new properties with 95% LVR and 5% deposit, which keeps them tied to that one bank and therefore without the flexibility to move.
Or they’ve been advised to fix interest rates and they’re now stuck with that broker. If you don’t have the right team around you, it can cost you dearly in the future.
Remember when you’re dealing with the everyday ins and outs of property investing, it’s important not to lose sight of your overall strategy. When Nathan starts out on any journey, whether it be his property portfolio, or building out a business, he will look at the end first, then look at where he’s at, work out what hurdles he will face and then work out a process of how to get to his end goals.
He then breaks down the journey into KPIs or milestones he needs to achieve and what processes he can put in place to minimise potential risks. Focusing on the big picture will be easier when you have the daily grind taken care of by your team of professionals.