Rolex Mindset
New Contributor
I'm a 22 year old from New Zealand. Since I turned 18, I derived my income solely from reselling used items. My goal for 2023 has been to change my lifestyle. I've tried to pursue a frugal lifestyle and put money aside to do leanFIRE. Weakness with reselling and my belief that retiring early wouldn't suit my needs has been cause for reevaluation. While reselling is an excellent income that I will likely always do, it isn't something I can solely rely upon for the rest of my life. Ultimately, I need need to diversify and establish a more recurring source of income that offers greater scalability.
I spent a while studying the different businesses I could potentially get into. You see lots of junk online like selling merchandise or dropshipping. I studied the different job opportunities on job classifieds to see the different types of categories available, I looked into the businesses that are available for franchise, as well as the White Pages. Yes, flicking through the White Pages inspired me to pursue property management.
For context: I've always had an absolute fascination for property. I grew up in a small town, where before COVID inflation, it was possible to buy a house with a 10% yield under $100,000. I thought when I turned 18 that it'd just be as simple as getting 20% deposits and then accumulating some awesome cash-flowing houses. Unfortunately, my town experienced tremendous growth (50% capital growth for a few years) which has changed the dynamic for investment. It represents poor value rather than a hidden gem now. All the research I did in anticipation of thinking that I would be able to buy houses has given me an understanding of the broad property market dynamics, legalities of property, politics regarding housing, and the tangibles like the actual structure of the property itself. While I've never owned a house, I certainly believe I've accumulated decent research over the years to understand more than most managers off the bat.
From there, I've established a Word document and began brainstorming the different segments of property management and researching to understand it better. Fundamentally, it is a simple business with very low expenses - you could theoretically get away with doing everything on your phone. I'm attracted to this type of business. I hate the idea of investing a great sum with the potential for profit in a decade but having to subsidise in the meantime. While few businesses succeed with that model, if most businesses don't become self-sustainable soon I consider them to lack any real basis. Property management offers a high rate of profit and promise of paying off the startup capital in a timely fashion.
The bare essentials of the business exist. Social media has been setup as well as a website. However, this is clearly not enough. While I have "small business experience" reselling, this is a completely different ballgame for the requirements of advertising and presence. What currently have is: no network, no brand recognition, no history in the business working for anyone else, no real experience, heck I don't even know anyone where I currently live (moved well away from family/friends to do this in a city). Despite the disadvantages against me, I absolutely know that should I continuously pursue this (and not mere mental masturbation), results will be achieved.
Giving myself clarity is the crux of this thread. I can conceptualise what the business will look like in my mind. The journey needs to be given realistic consideration and planning. The segment I have trouble with, as well as many other businesses would, is advertising from nothing. Seeing the challenge in front of me has made me appreciate about how little the actual business matters and how much marketing does. The Pareto principle certainly applies.
How will I then advertise this property management business? Looking competing property businesses out there, and there are many, they have great budgets to advertise in a multifaceted way. They have:
I spent a while studying the different businesses I could potentially get into. You see lots of junk online like selling merchandise or dropshipping. I studied the different job opportunities on job classifieds to see the different types of categories available, I looked into the businesses that are available for franchise, as well as the White Pages. Yes, flicking through the White Pages inspired me to pursue property management.
For context: I've always had an absolute fascination for property. I grew up in a small town, where before COVID inflation, it was possible to buy a house with a 10% yield under $100,000. I thought when I turned 18 that it'd just be as simple as getting 20% deposits and then accumulating some awesome cash-flowing houses. Unfortunately, my town experienced tremendous growth (50% capital growth for a few years) which has changed the dynamic for investment. It represents poor value rather than a hidden gem now. All the research I did in anticipation of thinking that I would be able to buy houses has given me an understanding of the broad property market dynamics, legalities of property, politics regarding housing, and the tangibles like the actual structure of the property itself. While I've never owned a house, I certainly believe I've accumulated decent research over the years to understand more than most managers off the bat.
From there, I've established a Word document and began brainstorming the different segments of property management and researching to understand it better. Fundamentally, it is a simple business with very low expenses - you could theoretically get away with doing everything on your phone. I'm attracted to this type of business. I hate the idea of investing a great sum with the potential for profit in a decade but having to subsidise in the meantime. While few businesses succeed with that model, if most businesses don't become self-sustainable soon I consider them to lack any real basis. Property management offers a high rate of profit and promise of paying off the startup capital in a timely fashion.
The bare essentials of the business exist. Social media has been setup as well as a website. However, this is clearly not enough. While I have "small business experience" reselling, this is a completely different ballgame for the requirements of advertising and presence. What currently have is: no network, no brand recognition, no history in the business working for anyone else, no real experience, heck I don't even know anyone where I currently live (moved well away from family/friends to do this in a city). Despite the disadvantages against me, I absolutely know that should I continuously pursue this (and not mere mental masturbation), results will be achieved.
Giving myself clarity is the crux of this thread. I can conceptualise what the business will look like in my mind. The journey needs to be given realistic consideration and planning. The segment I have trouble with, as well as many other businesses would, is advertising from nothing. Seeing the challenge in front of me has made me appreciate about how little the actual business matters and how much marketing does. The Pareto principle certainly applies.
How will I then advertise this property management business? Looking competing property businesses out there, and there are many, they have great budgets to advertise in a multifaceted way. They have:
- Retail locations
- Branded cars
- Radio advertising
- TV advertising
- Billboards
- Signage
- Rental listings
- Mail advertising
- Newspaper inserts
- Sponsorships
- Social media
- Google SEO
- Word of mouth
- Workers actively getting their business out there
In comparison, I have nothing, and no campaigns across different mediums that would be funded simultaneously. Did I yet mention that I am bootstrapping this business?
I am absolutely terrible at advertising, yet understanding it is essential for the business to succeed. I spent a few quid on advertising on Facebook to try attract landlords... to no avail. I've also tried delivering mail straight to people's mailboxes to let them know of my services. From that, I gained one like on Facebook and 15 website views by loosely targeting 500 homes.
What I want to try:
- Cold calling
- Windscreen flyers
- Networking with contractors (need to get some business cards first)
- Networking with other independent property managers in other regions for referrals
- Attending landlord networking events
- Newspaper classifieds advertising
- Giveaways (when I have enough social media attention)
What's recommended by most blogs simply doesn't yet work at my stage. It's difficult to leverage a social media presence of two likes. While it's recommended to make quality content, there isn't any inherent reason for the algorithm to push it without there first being positive engagement on it. Getting more likes and attention to my page is imperative at this stage.
Referrals are an interesting idea, but without any network there isn't anyway it can yet work.
There are great deal of things recommended by websites to help grow the business that wouldn't suit my demographics or result in any business. There's the mainstream recommendations of creating a podcast and a YouTube channel. Landlords with three properties, aged 40+ are going to YouTube to find recommendations for property managers. Could always be wrong though!
In the future, I can imagine my business gaining clients (landlords) on its own. This will be when I'm able to post signage advertising vacancies. On rental websites, people will notice my business advertising properties. It's my intention to get to know neighbours and known in the community. Perhaps I could even receive local newspaper attention. Essentially, the business will have enough recognition on its own for people to naturally levitate towards it.
The immediate issue is simply building that name recognition in the most basic of ways. It's definitely possible as I see beauticians advertise their own home businesses and gain regular business. It's not as if they are savvy advertisers or minds either. If they can do it, so can I.
Gaining name recognition in the short-term is the key goal here. I am going to make a mess of getting there. I will have absolutely no clue how I will get the first 100 likes on Facebook. After that, it will get easier as I am able to refine and see what advertising methods are working for me.
As previously mentioned, my innate ability to do SEO and online advertising outside of online platforms similar to eBay is abysmal. Yet, I know the demographic I am looking for:
I am absolutely terrible at advertising, yet understanding it is essential for the business to succeed. I spent a few quid on advertising on Facebook to try attract landlords... to no avail. I've also tried delivering mail straight to people's mailboxes to let them know of my services. From that, I gained one like on Facebook and 15 website views by loosely targeting 500 homes.
What I want to try:
- Cold calling
- Windscreen flyers
- Networking with contractors (need to get some business cards first)
- Networking with other independent property managers in other regions for referrals
- Attending landlord networking events
- Newspaper classifieds advertising
- Giveaways (when I have enough social media attention)
What's recommended by most blogs simply doesn't yet work at my stage. It's difficult to leverage a social media presence of two likes. While it's recommended to make quality content, there isn't any inherent reason for the algorithm to push it without there first being positive engagement on it. Getting more likes and attention to my page is imperative at this stage.
Referrals are an interesting idea, but without any network there isn't anyway it can yet work.
There are great deal of things recommended by websites to help grow the business that wouldn't suit my demographics or result in any business. There's the mainstream recommendations of creating a podcast and a YouTube channel. Landlords with three properties, aged 40+ are going to YouTube to find recommendations for property managers. Could always be wrong though!
In the future, I can imagine my business gaining clients (landlords) on its own. This will be when I'm able to post signage advertising vacancies. On rental websites, people will notice my business advertising properties. It's my intention to get to know neighbours and known in the community. Perhaps I could even receive local newspaper attention. Essentially, the business will have enough recognition on its own for people to naturally levitate towards it.
The immediate issue is simply building that name recognition in the most basic of ways. It's definitely possible as I see beauticians advertise their own home businesses and gain regular business. It's not as if they are savvy advertisers or minds either. If they can do it, so can I.
Gaining name recognition in the short-term is the key goal here. I am going to make a mess of getting there. I will have absolutely no clue how I will get the first 100 likes on Facebook. After that, it will get easier as I am able to refine and see what advertising methods are working for me.
As previously mentioned, my innate ability to do SEO and online advertising outside of online platforms similar to eBay is abysmal. Yet, I know the demographic I am looking for:
- Auckland-based (1.7 million people)
- Aged 40 to 69 (592,570 people in Auckland)
- People who engage with real estate-related content who are hopefully landlords (low tens of thousands?)
Efforts made by myself is in pursuit of that established demographic. Due to high interest rates and envious populist tax changes (the removal of interest deductibility against rental income) there aren't new investors. Landlords who are in have been so for years. My promise to them is to offer quality management services (I offer agility that most managers don't) at a mid-line price point. I have to convince people who are either self-managing or with another property management firm (more likely as self-managers are stingy) to trust their property in me.
I have multiple objectives I want to achieve with this business. These are different stages and won't be an overnight endeavour.
Immediate-term, I want to manage one property. Just one. This is a monumental step for the business. It would mean that I have reached a decent amount of landlords (though the specific ratio would be unclear). If the property is vacant, that allows me to tick the box of advertising. Landlords and other agents doing comps will see my name advertising that property, which within itself could represent opportunities.
Mid-term, I want to manage 25 properties. The more I get, the more information I have to refine my advertising strategy and gain more properties under my control - a snowball if you will. This would represent an income of $50,000 approximately.
Long-term, I want a minimum of 50 properties under my management. This would represent an income of approximately $100,000. I would be happy with this sum. In theory, I'm sure that I could manage 120 properties (this seems to be the average for those employed in the business) but that would require severe dedication and energy. While I could, it would be far more detrimental than beneficial and result in burn out. Perhaps I could get to this stage, realise it's easier than I thought, and expand into employment? That being said, the idea of being independent, running something how I like specifically (even if wrong), not having to manage staff, and running a nimble, budget business that can pivot as required appeals to my personality.
I am exploring a few different ideas. They fundamentally have any benefit for my business yet I'll explore them anyway. They don't help propagate my name nor do they have any guarantees any more than being an independent operator.
Purchasing rent rolls. These tend to sell for a 3x income multiplier which conventionally would represent an awesome return. Imagine buying something and making a 33% return. There isn't any guarantee that the properties you purchase to manage would even stay or like your business. They also don't immediately offer any ability to advertise my business if there are low vacancies. Buying a sizeable rent roll isn't cheap from what I've seen.
There are franchise opportunities for sale with small brands. Sharing a common brand would be useful for referrals from different regions. However, they have no properties. You're buying a non-entity with some branding. I would imagine that you would get help advertising and training on how to manage. Is it a good use of $30,000? Probably not. Imagine what that sum could do as an advertising budget for myself!
I have multiple objectives I want to achieve with this business. These are different stages and won't be an overnight endeavour.
Immediate-term, I want to manage one property. Just one. This is a monumental step for the business. It would mean that I have reached a decent amount of landlords (though the specific ratio would be unclear). If the property is vacant, that allows me to tick the box of advertising. Landlords and other agents doing comps will see my name advertising that property, which within itself could represent opportunities.
Mid-term, I want to manage 25 properties. The more I get, the more information I have to refine my advertising strategy and gain more properties under my control - a snowball if you will. This would represent an income of $50,000 approximately.
Long-term, I want a minimum of 50 properties under my management. This would represent an income of approximately $100,000. I would be happy with this sum. In theory, I'm sure that I could manage 120 properties (this seems to be the average for those employed in the business) but that would require severe dedication and energy. While I could, it would be far more detrimental than beneficial and result in burn out. Perhaps I could get to this stage, realise it's easier than I thought, and expand into employment? That being said, the idea of being independent, running something how I like specifically (even if wrong), not having to manage staff, and running a nimble, budget business that can pivot as required appeals to my personality.
I am exploring a few different ideas. They fundamentally have any benefit for my business yet I'll explore them anyway. They don't help propagate my name nor do they have any guarantees any more than being an independent operator.
Purchasing rent rolls. These tend to sell for a 3x income multiplier which conventionally would represent an awesome return. Imagine buying something and making a 33% return. There isn't any guarantee that the properties you purchase to manage would even stay or like your business. They also don't immediately offer any ability to advertise my business if there are low vacancies. Buying a sizeable rent roll isn't cheap from what I've seen.
There are franchise opportunities for sale with small brands. Sharing a common brand would be useful for referrals from different regions. However, they have no properties. You're buying a non-entity with some branding. I would imagine that you would get help advertising and training on how to manage. Is it a good use of $30,000? Probably not. Imagine what that sum could do as an advertising budget for myself!
This thread will detail my efforts to painfully advertise, grow, and derive income from this business. My goal is to provide weekly updates of real results and exertion. This will be another way to hold myself accountable to ensure that I am achieving real results instead of deluding myself.
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