Friday, January 14, 2005

Our landlord Reg

Who said investment properties provided passive income? Yesterday our landlord Reg had to remove leftover furniture from a flat where the tenants had flown the coops suddenly.

Then he had to fix some plumbing in our neighbour's flat, then fix our toilet. As we said our thankyous, my ever-curious wife asked him how he started in property investment.

Turns out he'd overcome huge barriers on his way to being financially comfortable. Coming from the small town Whangarei to New Zealand's biggest city, Auckland, he found no-one would lend him money. He asked for a raise in his fruit auctioneering job, only to be told he wasn't worth it. Yeesh!

He noticed the ones doing really well were the carriers... they had nice trucks, boats, cars, etc. He heard one of them had had a heart attack, and so his run just stopped. Spotting the opportunity, Reg visited him in hospital. "Would you like me to buy your business?" he asked. Yes, said the carrier. Great, said Reg, but I don't have any money.

Borrowing from his wife, mother, the bank ("only $200 and they thought they were doing me a big favour!") and, ironically, from the seller (!), Reg bought the business and started to move up.

But he didn't stop there. He looked around Auckland to see who was making the money - and it wasn't the people who were working. It was property owners enjoying passive income - toilet repairs notwithstanding.

So - cutting a long story short - Reg used calculated risk to move up, step by step. He had no natural advantage, just an inquisitive mind. And he doesn't consider himself an entrepreneur, either. He just looked to see why others succeeded and he didn't.

I think Reg's attitude had as much to do with his success as the techniques he used. His openness and willingness to share his story with us was really touching. Here is someone willing to do good for others if he has it in his power at all.

And it's soooo good to have the toilet working again!


At 10:41 PM, Blogger Borscht said...

Buying a property is certainly the way to go, Simon.

Location, location, location. If you get the right one, you can sit on that income stream for a while.

I think it's a bold move.

Besides, when you're working for someone else, you're always at their behest and never going to be as financially-free as you want to be.

Think about it -- you're earning $2000/biweekly, for example. 25-30% of that goes to your landlord. Another 25% goes for your expenses...and the rest for savings.

At that rate (and that's being mighty generous) -- you're working for the man.

Better to be the landlord and collect the deposits, or the cheques (as it were).

You *do* spell cheques as "cheques" in NZ, yes? I neglected to check on cheques when I was last there.

-- AM

At 12:05 PM, Blogger Simon said...

Yep, we spell it cheques. And we don't play checkers, that I know of. (Just in case you were interested)

And yes, it'd be great to be collecting some!


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