Real Estate Investor Magazine South Africa May 2013 | Page 24
SMART MOVES
BY KOOS DU TOIT
Don’t Go It Alone
Harness Other People’s Time
Each of these aspects is
a field of expertise in its
own right, governed by
ever-changing laws and
regulations. The simplest and
most effective way to ensure
a smooth running and highly
profitable property portfolio is to appoint
specialists in each field to provide professional
services, backed up by expertise, resources and
systems already in place to ensure adherence to
continuously changing regulations, legal aspects
and market conditions.
company; the property management and
maintenance to a propert y management
company; the accounting, insurance and tax to a
professional accountant and tax advisor; and the
trust management to a trust specialist.
Outsourcing
For t u n ate ly, e v en f i nd i n g t he r i ght
professionals can be outsourced – you don’t
have to spend months or even years finding
the right people and companies to become
your outsourcing partners, or to learn by costly,
time-consuming and potentially unpleasant
trial-and-error if the partners you chose are
indeed the right ones.
Appointing experts – or outsourcing, as it is
called in the business world – is a proven business strategy, used by corporations around the
world to ensure cost efficiencies that free up
valuable cash flow and, more importantly, to
benefit from the outsourced company’s expertise
and experience, reducing legal and compliance
risks.
Other People’s Time
W
hile the property investment business
model is so simple that property
investors with sufficient time and
expertise could very well manage all aspects
thereof themselves, “going it alone” is a property
investment pitfall investors should avoid. This
can be done easily and cost-effectively, while
harnessing a host of benefits associated with
having a team of experts to manage and grow a
portfolio professionally.
Why not “go it alone”?
In reality, few buy-to-let property investors have
the time, expertise or inclination to become
experts in the many complex aspects of property
investment, such as property law, mortgage
f inancing, rental management, propert y
maintenance, tax and accounting, and trust
administration, among others.
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May 2013 SA Real Estate Investor
In wealth creation circles, appointing experts or
outsourcing is referred to as “harnessing Other
People’s Time (OPT)”. It refers to the practice
appointing experts who can perform necessary
management functions quickly and professionally, exponentially increasing the ability of
an investor to get things done, far beyond the
capabilities of one person or the restrictions of
24 hours in a day.
Extreme outsourcing
The property investment business model is ideally
suited to outsourcing or harnessing OPT, since
every function can be outsourced effectively
– allowing property investors to leverage
outsourcing and OPT to the maximum.
Property investors can outsource the search
for suitable investment properties to a property
investment club; the pre-offer propert y
inspections to a property inspector or a valuator;
the negotiations with the seller to an estate
agent; the finance process to a bond originator;
the actual buying process to a conveyancer; the
tenant acquisition, rental collection and tenant
management process to a rental management
The right team
Of course, to optimise and maximise the
outsourcing model and the harnessing of OPT,
it is critical for a property investor to find experts
in each field who understand the property
investment business model and the investor’s
goals and objectives.
Your selection process can be outsourced by
simply joining a professional property investment
organisation, who provides preferential or
discounted access to a network of professionals
such as attorneys, bond originators, property
valuers and inspectors, rental management
compa n ie s a nd prop er t y ma na gement
companies, insurers and trust accountants, who
have been carefully screened, are continuously
monitored in terms of service levels, and most
importantly, who understand the property
investment game and the market.
The bigger picture
Once all these functions are outsourced, you
will have experts in each field managing each
function. All that remains for you to do is
to keep a watchful eye to ensure everyone is
delivering on their mandate.
And while these experts take care of the details,
you are free to focus on the bigger picture and on
what is really important: making the strategic
d