Rentals are a great way to create an ongoing side income - or even to reach financial independence and retire early. In New Zealand alone, nearly 34% of households are rented. That’s around 604,000 rentals in total. Where there’s demand there’s also an opportunity, and many New Zealanders are jumping at the chance to leverage real estate investments to achieve their financial goals.
However, running a rental property (much like running any small business), comes with a number of time-consuming admin tasks. You need to track your income and expenses for tax purposes, and manage the day to day running of the property, such as managing listings and maintenance requests. The right software in this scenario can be both a life-saver and a serious asset to those searching for fiscal independence.
We sat down with Logan Ransley, co-founder of Landlord Studio property management software, to talk about how the right software is a vital part of time management for those seeking financial freedom through self-employment and investments.
What’s the idea behind Landlord Studio? How did it get started?
Landlord Studio is all about supplying the tools a landlord needs to properly manage their investments and their time. It’s a mobile-first property management software, the first iteration of which was released back in 2016. Charles (our CEO) was looking for software to manage his own properties, but nothing he found fit his needs. So he built his own solution.
That first version was called Property Buddy. It was launched in the app store and quickly gained organic traction in the market. In 2018 he took the leap to become self-employed and launched the current version of the software - Landlord Studio.
Landlord Studio is aimed largely at the US property market, which has some 20 million units managed by independent landlords – but we have many landlords based in New Zealand as well.
How is the New Zealand property market different to the US one?
Fundamentally there is a difference in mindset. In the US, real estate is a key part of many people’s plans for achieving their monetary goals. The idea of leveraging real estate to build wealth is something that, for a growing number of people, is an achievable reality.
In New Zealand, there are plenty of people that own baches. However, for most of the year, those baches just sit there costing the homeowner money. These properties could very easily be put to work to cover running costs, mortgages, and even create extra income. A lot of New Zealanders are thinking about legacy rather than creating rental income today. The idea of renting their second home often isn’t even considered.
That being said, we recently partnered with ASB and ran a promotion to their customers and we had hundreds of Kiwi landlords jump on board, looking for more efficient ways to self-manage their rentals. This just goes to show that there are plenty of Kiwis who have already recognised the opportunity that real estate presents.
Can you talk a bit more about “leveraging” real estate to achieve financial freedom?
Real estate should form part of everyone’s investment portfolio. The main problem is that it comes with such a high monetary entry barrier. The beauty of rental properties though, is that the income they produce goes towards paying off the debt you assumed when you purchased it - you build capital in an appreciable asset whilst simultaneously earning income. This is what investors call good debt, debt that works for you as opposed to against you.
That first property is always the hardest, but you don’t need to be a multi-millionaire to step into the real estate investing game. The right property in the right location could be very affordable, and generate impressive returns. It’s all about locating the best opportunities.
There are difficulties and risks as with any investment, such as bad tenants or unexpected maintenance requests, but a properly managed real estate investment can be an incredibly lucrative side gig - with pretty minimal time input and management stress (especially with the right software in your pocket).
What effective real estate strategies have you seen your customers implementing?
Some of the most successful landlords on our system have developed very succinct processes that work for them. These processes allow them to continuously build and expand their portfolios, going from 1 to as many as 20 investment properties in a matter of years.
We have one customer, for example, based in the UK, who has worked his way up to 15 properties in the space of 5 years without investing any of his own money. He has used private loans and cleverly refinanced his current assets to create low-interest debt that more than pays for itself. He is now in his 40’s, and both his wife and himself have quit their day jobs and manage their property portfolio - pretty much - from the comfort of a beach lounger in Spain.
He’s able to do this because he’s worked out a system, built a reliable team, and of course, utilises technology to automate tasks and effectively stay on top of his income, expenses and communications.
What advice can you give people looking to move into real estate investing?
The first tip we’d share is to read everything you can about real estate investing. You need to be familiar with all the laws and regulations that come with being a landlord, and be able to identify best practices when it comes to managing tenants and dealing with maintenance issues. Educating yourself is the only way you can ensure you stay compliant with the law, and avoid potentially costly mistakes which could bring your career as a landlord to an abrupt end.
Our second tip is all about time management. This is why software like Hnry, and Landlord Studio exist. The old adage ‘time is money’ has never been truer and there is now a multiplicity of ways that entrepreneurs can buy back their time using these intuitive and innovative softwares.
Our final tip is to form an investment strategy that suits you. Make sure you know what your end goals are. Do you want to invest in a property that will generate positive cash flow ongoing? Are you going to fix and flip? Or is it a speculative investment aiming to capitalise on capital gains? Knowing what your goals are will help you analyse potential investments and decide which deals are worth fighting for or walking away from.
More about Logan Ransley, Co-founder of Landlord Studio
Logan is an experienced digital marketer, investor, and a first-time landlord. He is the brains behind the digital strategies of Landlord Studio focusing on growing the Landlord Studio brand and driving education within the real estate industry.
If you have any questions about Landlord Studio and getting support as a landlord, please direct your enquiries to the team at Landlord Studio.