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. 22 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