By Frank Lockhart

You will guess from my name that I am related to Nick and Katrina and, to save you the anguish of wondering, I will confess up front to being Nick’s father.

A few who are aware of this sympathise with me however, the majority of those who know us both, do tend to sympathise with Nick.

You may well imagine that this is going to be one of those articles praising MRD to the skies and eulogising on the exemplary conduct of Nick, Katrina and their staff in the conduct of their business. In fact it is not, although that is what I know and believe to be true. I will not bore you with a parent’s lengthy bias.. rather, I shall endeavour to help you better understand how you can help yourself, as an investor, and create greater value in your property.

So What Is An Investor?

Simplistically, it is a person who places their funds in a vehicle designed to increase their wealth beyond the intrinsic value of their investment. Why? Because they know that the intrinsic value will depreciate over time through normal future events. The vehicle used could be an interest bearing deposit, shares, a retail business, a service business or any other activity devised for the same purpose. ie: To increase the intrinsic value of an investment.

Although our prime interest today is the investment in property, I have listed a few of the many methods of investing in order to make one critical point. That is… regardless of how you decide to invest you must always bear in mind you are running a business.

You Are Running A Business

When investing in property you are running a business. A property investment business and, as with any business, there are certain expenses associated with it that cannot be avoided. These include land rates, water rates, strata fees, insurance repairs and maintenance and even land tax if you own sufficient properties in the same State to warrant it.

Additionally, there are other expenses that can be avoided if you are able, and have the time, to do the work involved yourself. These include some maintenance, rent collection and general management of the property and perhaps joining the strata committee so you can have a say (vote) in decisions made on the management if the property is a strata unit.

In general however, I find it preferable to have others do all the work for me. WHY?

1. My time is more valuable by using it in pursuing other sources of income or having free time to enjoy with my family.
2. Those others, who do the work, are more qualified to do it than I am. (I also have someone else to blame if anything goes wrong).
3. Qualified experts can often save you money due to their specialised knowledge.

In essence, these “others” are your business staff and they are paid on results rather than by wages. Part of their job is to attend to the needs of the tenant who is your customer.

If you accept this then you, as the managing director of your business, have the responsibility to:

• Ensure that your staff carry out their jobs properly.
• Treat your staff with the respect that you expect from them and,
• Ensure that your customers are kept happy and satisfied with the service they are paying for.

Which all leads me to the subject of this article, How to be a good landlord. Perhaps I can best explain this by citing my own attention to these matters.

#01 If a repair is needed, have it done immediately.

#02 If a tenant (your customer) has a complaint have it attended to immediately

#03 Show the tenant (your customer) that you appreciate their tenancy.
(each Christmas I like to send my tenants a hamper as a gift)

All of this can create a slightly higher immediate cost but, in the long run it can pay high dividends. Tenants can stay longer and will want to better care for your property in appreciation.

NB: See also “Property Investing As A Home Based Business” and “Property Investing Is A Business – How Do I Manage My Business In The Current Economic Climate?”

Real Examples

One tenant has been with us for 3 years and, a short time ago, advised our manager they would not be renewing their lease. I sent them a letter thanking them for being a wonderful tenant and wishing them the best in the future. The letter was written as a reference and told them to use our name in the future if they needed a verbal reference. They asked to stay for an extra 3 or 4 weeks after the lease expired and I gave permission for that. In the end they decided not to go and are still occupying the property. I don’t know the reason for their not leaving but I was certainly happy for them to stay on.

In another property the tenant had only been there for 3 months and was overwhelmed when they received our gift and best wishes for Christmas. A happy new customer.

The above examples do not provide any guarantees but having a happy tenant is of utmost importance and only you can contribute to this by adhering to the 3 principles shown above.

Rents

Before concluding I would make brief mention of my business outlook on rental income.

You are told the current rent of your property should be, say, $440 a week. Shortly after your manager calls and says he has a tenant but they only want to pay $420 a week. I would immediately tell the manager to accept and secure a tenant.

In relation to the above, let’s do a little maths.

A loss of $20 a week for 26 weeks is $520. If you waited for a week to get the $440 you have lost a weeks rent of $440 instead of $520, an apparent saving of $80 over 26 weeks.

However, if you have to wait 2 weeks before you have a tenant, then you’ve lost $880, less the original loss of $520 means you have made an extra loss of $360 plus a further $440 for every extra week you may have to wait for your tenant.

Have you ever heard the expression “A bird in the hand is worth two in the bush” ?

Additionally, you have a happy tenant who now knows they have a landlord who cares rather than one hungry for all they can get (and you will make sure they know that. Won’t you? See #03 above).

Conclusion

There is much to learn with property investing and I did find great help from MRD. I know I am related but I have seen ample proof that their attention to me was no different than that to other clients.

I have also been helped by my past experience in business where I learned the value and importance of having reliable and competent people looking after your interests and of treating your customers like the important people they are to your future income and success.

That’s all for now.

Frank Lockhart
http://www.vegebuddies.com.au

Thanks Dad!

Like most people I have learned much from my dad, most of all was a value system that is today the very core of my business. Thanks dad, I love you.

The real reason any of us invest in property (or any other asset class) is because we desire an outcome (not a property). Your investment decisions should lead to a better tomorrow where you have more ownership of your time and more money to spend doing those things that are important to you.

To this end, mrd provides a safe environment where you can engage, ask questions and learn… assured that we will never interpret your desire for knowledge as a license to sell you something. Our services are both complimentary and without obligation; I encourage you to put us to the test!

Our Complimentary, No Obligation Offer

Are you just starting out or someway advanced on your property investment journey? Perhaps you would like to further discuss with us those outcomes you hope a property portfolio would deliver you. Whatever your need, our property mentors are committed to supporting you in the pursuit of your financial goals. With the support of our propriety software and an mrd property mentor running many “what if” scenarios we can help you to take much of the guess work out of your planning and decision making.

To explore the possible alternatives available to you… or to seek help to develop your own tailored investment plan; just ask! Our offer of support is both complimentary and without obligation; that’s an unconditional promise!

YES PLEASE!

I would like an mrd property mentor to make contact with me to assist me in creating a plan for my financial future >>>more

I would like mrd to assess my borrowing capacity >>>more

Happy Investing,

Nick Lockhart
mrd Customer Care Program… because investing is personal

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