Management Consultants are first taught one crucial thing: be clear about which numbers matter and which ones don’t. This was certainly my first experience while working for McKinsey.
‘What’s a big number and what’s a small number? Let’s fix the big ones first.’ And so, while we will all be prudent about minding every cent, it is important to see where the biggest impact lies, enabling us to focus our greatest attention there.
Let’s imagine you have an investment property worth $600,000 and are getting $500 pw rent – a fairly regular situation. Here are some typical numbers in your financial equation that you should consider.
What can we learn from this quick summary? Two things are immediately apparent:
1. The single most important decision you can make is to buy the right property, in the right location, with the right land content, to maximise your capital gain; and
2. Once having made the purchase decision, the next most important decisions are made by your Property Manager: ‘Managing to minimise vacancy and maintenance costs’ (typical total $3,000 – 7,000 p.a.).
That’s why focusing on the price your Property Management Agency charges -each 1% of fees is only worth $310 in this example- is FAR LESS IMPORTANT than choosing a good Property Manager – which is worth 10 – 20 times as much to you.
And that’s why we offer a Guaranteed Rent product, to smooth out your vacancy costs – typically your single greatest cost in a year. No other Property Manager offers this. Contact Andrew Drake on 0428 064 846 for more information.