I've finally figured out what business I wanna do.
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01-02-2013, 07:55 PM
I've finally figured out what business I wanna do.
It's taken two fucking years but I have FINALLY figured out what business I wanna start.
I've had ideas in the past, been keen on a few things, but they've never really.. I dunno, I don't think I was really into those ideas. That and they weren't practical.
I've had an ideal business check list for quite some time but nothing has ticked all the boxes.

So this business I stumbled across (because I had to use it) came along and it got me thinking instantly, it started off checking a few of the boxes, and the more I thought about it it checked off more and more of the boxes until they were all checked off.

So I've been sitting on this ideal business type for the last 3 weeks doing a bit of research and to be absolutely sure.

But now I am, I am 100% sure that this is the business I want to, and will, start.

So what is it? Property Management.
Managing rental property for people too lazy to do it themselves.

It's something I can start this year on a small scale while I'm at university and once I finish university I can take my client base and small business to the bank and present it to get a loan to grow it, hire some staff etc..
I can do it from home, all I need is a website, landline and a cellphone. No need for expensive office space or even worst, retail space.
It matches my major, commercial law. Property law is only a stones throw away.
I charge say 5% weekly commision which means I pay the property owner, only when I get paid. I get a steady weekly revenue stream.
Property managagers also hold the bond. This is key (and the clincher) as I can take the bond at the start of the lease and use that money to invest into other projects (because I don't have to pay it out till the end of the lease), other businesses, expand this business etc...
ie: So say someone rents a room, they pay $500 bond. If they pay $200 in rent a week, I take 5%, so $10 or $520 a year. If they're on a 12 month contract that means if I spend their $500 bond straight away on other money generating things, they will pay me $520 over the year in commision, so I can just put that aside and by the time their contract is up I can use the commision off their rent to pay their bond back.
It's basically like taking an interest free loan.

Now I'm not saying that is what I will do, but I'm saying that this bank account with everyone's bonds in it is a huge asset that I could use to pay for future projects/businesses.
Warren Buffet earned his money by starting an insurance company and using the money that would be used if someone lost their house or w/e, that huge reserve money fund thing, to pay for his future businesses. It's the same deal, but less risk (because they pay their bond back through their commission).

Forgetting the bond thing for a moment, it'll be a steady weekly revenue. The product (the house) isn't mine, so if the building burns down I don't have to pay out. And the only time I pay out any money is when I get money myself (rent).

It's perfect.

AND it's a business that can easily be expanded into different cities/Australia/US/China etc.. AND expanding into selling real estate is only a stones throw away too. And rental properties are a grow industry as mortgages rise.

It's perfect.

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02-02-2013, 08:25 AM
RE: I've finally figured out what business I wanna do.
I once hired a property management firm when I moved away from my income property and couldn't care for it on a regular basis. (Nothing to do with "lazy property owners", most of your clients will be absentee owners, unless you land someone with more properties than they can take care of themselves).
I expected and got:
Complaint management
Instant repairs (shit happens - a lot, tenants can call in for plugged up toilets and what have you and most places have laws about how fast you have to fix))
Collection of rent
First and last rent deposit in an escrow account (shoots down your capital idea)
Immediate cleanup when renter leaves
Staging for showing property, new paint etc.
Immediate listing of property for rent
Showing property to prospective renters
Regular property inspections (so we catch someone who is going to ruin the place before it gets too expensive)
Management of rental agreements
The agency was responsible for any cost ccurring because of delayed service to the renter
The agency handles all book keeping and generates monthy reports.
Managing properties is a lot of work. You need to know the law, construction and repairs, sales, and prompt and curteous customer service for renters. There is a ton of book keeping and reports. When the property is empty, you work twice as hard as you are responsible for finding good renters and need to present a pristinely clean property in perfect repair. And you're not making money then.
Wouldn't be my choice for sure. It's labor intensive and has a ton of unexpected headaches associated with it. Screening renters is everything, be sloppy with that and there will be nothing but trouble and empty properties.

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02-02-2013, 04:39 PM
RE: I've finally figured out what business I wanna do.
Thanks for the advice.

I had thought of the majority of that, I do know what it entails. I'm not hoesntly sure of the law relating to bond whether I have to keep that in an untouchable account sort of thing but I haven't looked into that yet.

In regards to repairs and new paint etc.. would that not be at the expense of the property owner? Afterall it is their asset and a new coat of paint is increasing the value of that asset.

And yeah I figured it would require a lot of money management and phone calling (to tradesmen). But that was a top the agender, speaking of tradesmen, to get some ready on call firms that would be willing to come out straight away (afterall, I'd be offering regular repeat business).

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03-02-2013, 03:13 PM
RE: I've finally figured out what business I wanna do.
(01-02-2013 07:55 PM)earmuffs Wrote:  So what is it? Property Management.
Managing rental property for people too lazy to do it themselves.

Muffs, This is a topic I know something about and Dom brought up many good points. Forget the "too lazy to do it themselves". As Dom pointed out you will be mostly dealing with out of town owners. Why are they out of town? Because they can be. In other words many of the landlords I know own income properties over large geographical areas because they buy wherever there is a good deal. These people are sharp businessmen/businesswomen and there is nothing lazy about them so get that out of your head.

(01-02-2013 07:55 PM)earmuffs Wrote:  I charge say 5% weekly commision which means I pay the property owner, only when I get paid. I get a steady weekly revenue stream.

The standard rate for large property managers is between 8-12% of gross revenue. For smaller companies 5-7%.
http://www.naahq.org/Pages/welcome.aspx good info here


(01-02-2013 07:55 PM)earmuffs Wrote:  Property managagers also hold the bond. This is key (and the clincher) as I can take the bond at the start of the lease and use that money to invest into other projects (because I don't have to pay it out till the end of the lease), other businesses, expand this business etc... ie: So say someone rents a room, they pay $500 bond. If they pay $200 in rent a week, I take 5%, so $10 or $520 a year. If they're on a 12 month contract that means if I spend their $500 bond straight away on other money generating things, they will pay me $520 over the year in commision, so I can just put that aside and by the time their contract is up I can use the commision off their rent to pay their bond back. It's basically like taking an interest free loan.

I'm wondering if this bond you are referring to is the escrow deposit. If it is, by law, it must be held in a secure and separate account and may not be touched. I have mine in such an account and non-interest bearing to avoid the complexity. If you were my PM you would be depositing the escrow deposits into my company's escrow account and you certainly would not have carte blanche access to it. You would be sending me a tracking report of what has been deposited and paid out monthly and I would be able to see the bank balances on a continuous basis. There simply have been too many mismanaged accounts where this money has dissappeared.

(01-02-2013 07:55 PM)earmuffs Wrote:  Forgetting the bond thing for a moment, it'll be a steady weekly revenue. The product (the house) isn't mine, so if the building burns down I don't have to pay out. And the only time I pay out any money is when I get money myself (rent).

It's perfect.

AND it's a business that can easily be expanded into different cities/Australia/US/China etc.. AND expanding into selling real estate is only a stones throw away too. And rental properties are a grow industry as mortgages rise.

It's perfect.


What is better than managing other people's properties is owning and managing your own. Trust me on this, its my business. You would do well by starting out small and getting your feet wet. PM's have a great responsibility and their job is no piece of cake.

“I suppose our capacity for self-delusion is boundless."
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“I am quite sure now that often, very often, in matters concerning religion and politics a man's reasoning powers are not above the monkey's." - Mark Twain in Eruption
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20-07-2013, 07:13 AM
RE: I've finally figured out what business I wanna do.
(01-02-2013 07:55 PM)earmuffs Wrote:  It's taken two fucking years but I have FINALLY figured out what business I wanna start.
I've had ideas in the past, been keen on a few things, but they've never really.. I dunno, I don't think I was really into those ideas. That and they weren't practical.
I've had an ideal business check list for quite some time but nothing has ticked all the boxes.

So this business I stumbled across (because I had to use it) came along and it got me thinking instantly, it started off checking a few of the boxes, and the more I thought about it it checked off more and more of the boxes until they were all checked off.

So I've been sitting on this ideal business type for the last 3 weeks doing a bit of research and to be absolutely sure.

But now I am, I am 100% sure that this is the business I want to, and will, start.

So what is it? Property Management.
Managing rental property for people too lazy to do it themselves.

It's something I can start this year on a small scale while I'm at university and once I finish university I can take my client base and small business to the bank and present it to get a loan to grow it, hire some staff etc..
I can do it from home, all I need is a website, landline and a cellphone. No need for expensive office space or even worst, retail space.
It matches my major, commercial law. Property law is only a stones throw away.
I charge say 5% weekly commision which means I pay the property owner, only when I get paid. I get a steady weekly revenue stream.
Property managagers also hold the bond. This is key (and the clincher) as I can take the bond at the start of the lease and use that money to invest into other projects (because I don't have to pay it out till the end of the lease), other businesses, expand this business etc...
ie: So say someone rents a room, they pay $500 bond. If they pay $200 in rent a week, I take 5%, so $10 or $520 a year. If they're on a 12 month contract that means if I spend their $500 bond straight away on other money generating things, they will pay me $520 over the year in commision, so I can just put that aside and by the time their contract is up I can use the commision off their rent to pay their bond back.
It's basically like taking an interest free loan.

Now I'm not saying that is what I will do, but I'm saying that this bank account with everyone's bonds in it is a huge asset that I could use to pay for future projects/businesses.
Warren Buffet earned his money by starting an insurance company and using the money that would be used if someone lost their house or w/e, that huge reserve money fund thing, to pay for his future businesses. It's the same deal, but less risk (because they pay their bond back through their commission).

Forgetting the bond thing for a moment, it'll be a steady weekly revenue. The product (the house) isn't mine, so if the building burns down I don't have to pay out. And the only time I pay out any money is when I get money myself (rent).

It's perfect.

AND it's a business that can easily be expanded into different cities/Australia/US/China etc.. AND expanding into selling real estate is only a stones throw away too. And rental properties are a grow industry as mortgages rise.

It's perfect.

I like that you're saying its perfect. However, it will only be that way if everything goes as perfectly and smooth as you planned it. As the first comment said, things probably won't go the way you expect them to.

Just be prepared and open minded for your entrance into this business.

I hope everything goes as perfect as planned. It sounds like you have everything set up great.

Is God willing to prevent evil, but not able? Then he is not omnipotent. Is he able, but not willing? Then he is malevolent. Is he both able and willing? Then whence cometh evil? Is he neither able nor willing? Then why call him God? -Epicurus
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