Diversify, Diversify & Diversify !?!

The floor was finally fixed last night! Soon as this was accomplished I rang up my property manager and let her notify the new tenant to move in one week earlier.

The floor has been a problem since 2012 (2 years after the acquisition). It started like a small soft springboard due to underground water pipe leaking, then a hole developed around the infected area and expanded ever since. Three quick fix have been done, however as the words implied quick fix were just replacing with new cardboards, and these already costed me hundreds if not thousands of dollars all these years!

My property manager rang me up the next day after the tenant moved out and I went with a very great carpenter. Only after he dug out the cardboard-like floor it’s my first time to realise that there’s not many supports beneath the floor! I’m very amazed at the building regulation of New Zealand back in 1980s. Luckily my last tenants were not very big in size, I guarantee you that big people can fall easily into these holes and sooner or later my bills will pile up.

I stayed there for 30 mins and delegated responsibilities. The main focus is the floor at the bathroom and toilet, then the dinning room and a study room adjacent to the toilet. I quickly deposit a lump sum to the carpenter to buy materials. I also suggested him to sub-contract if he couldn’t get the job done in 2 weeks. We then check if any flooring shops opened on Sat/Sun, shit none opened! Ok we stick to our plan that the carpenter started to demolish the floor and double check if any underground water pipes were leaking. I went home and google the internet and looked for the best fit to the new floor.

Spent 1 hr on the net to check the shop open hours. store locations, product and price range, then we went to one shop on the next Monday morning. We spent 1 hr there looking for the vinyl pattern we wanted, then drove back to the site, loaded it off and then I returned to my office. The rest of the hard job took exactly 1 week to finish. Phew! What a relief!

This project took a little more than a week to finish. Although within the time frame, the cost is far way more than a whole month’s gross rental income! How’s that? 3-wk vacant property plus R&M direct costs. I was lucky to have all these well covered – partly reimbursed by the last tenant; 30% by the taxman, and the rest from my FX trades.

Final Words

I’ve learnt this long time ago that I can financially get ahead only if my portfolio is truly and well diversified.

Let’s say the only investment I learn and own is residential properties. By diversifying my portfolio I may have different properties at different places/area. Although the chance is very slim there’s still possibility that you have some bad tenants or costly R&Ms. When these happen at the same time your incomes stop comming in, while your expenses are going out. Does this “diversification” work for you?

Back to my example that large portion of the costs was covered by FX trades. Without profits from these trades the only way to cover those costs is to withdraw money from my bank account, which would be likely savings from previous years’ rental income. This way my assets are not working for me. This way my portfolio is not protected!

So now the question is, which one is diversification? Diversifying your properties at different places, or diversifying your investments/trades on completely different asset class? I guess you’ve got the answer now…

For your interest here’s a list of my FX trading results during the interim:-

  1. FX Trading Results (A) – NZDJPY
  2. FX Trading Results (B) – NZDEUR
  3. FX Trading Results (C) – NZDJPY
  4. FX Trading Results (D) – NZDJPY
  5. FX Trading Results (E) – NZDJPY
  6. FX Trading Results (F) – NZDJPY
  7. FX Trading Results (G) – NZDJPY



_______________________________The End____________________________

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