Debunking The Sweat Equity Myth

We all like to save money, right? However, there are moments when efficiency takes a nosedive because of money-saving mindsets. While most are aware of the fact that DIY tactics can allow them to save money, this is a piece of received wisdom that is not always true.

Outsourcing can provide a great deal of relief. Organizations often fall into the trap of believing that they are unable to outsource because it is inherently expensive. However, outsourcing is actually a great way to save money. The time-saving benefits are too much to ignore.

With outsourcing, saving money becomes much easier for those who are responsible for:

• Self-management of rental properties
• DIY house renovation
• Creating an LLC
• Designing their own website
• Snapping photos of their property
• Buying a property without professional assistance
• Writing out yellow letters manually

It is unlikely that anyone is going to save money handling these tasks by themselves. Those who are still reticent about outsourcing everything would do well to read on and learn more about the four reasons why the DIY days are over.

1. The Market Value Associated With These Tasks Remains The Same

Let’s say that the home in question is in need of new flooring. A quote is obtained and it turns out that the job is going to cost several thousand dollars. Of course, no one is going to want to spend that type of money when they are first starting to make these sorts of investments. This is a mentality that can lead to some puzzling decision making, though.

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The market value of the task at hand remains the same, whether the person is willing to handle the flooring on their own or not. The job is not going to get any cheaper because the homeowner took care of it themselves. This is an economic principle that can be applied to any decision of this nature.

It is not meant to be applied strictly to home renovation projects. No one who takes on these types of jobs on their own is actually saving any money. All they are doing is taking on a part-time job. Even if the money is not being spent directly, a homeowner is still going to have the same amount of time on the project that someone else would.

2. Time Is Valuable

Some say that they would rather spend money than time but this is not a wise choice. Everyone has the same amount of time and while it may seem free, it comes at a cost. Fixing a home or handling tenant related concerns without assistance may seem noble but time should not be treated as a disposable commodity.

Everyone has the same amount of time on their hands and no one’s time is more or less valuable than someone else’s. Instead of worrying about saving a few bucks, it is time to consider the benefits of outsourcing. That time can be invested in an endeavor that will provide a much greater return on the person’s investment.

3. Efficiency Is Not Maximized

The do it yourself types out there won’t want to hear this but the YouTube tutorials are not going to provide the tools needed to handle the task at hand in an efficient manner. When a task is not taken care by the professionals who are truly experienced, the level of efficiency tends to fall by the wayside.

Even something as simple as an oil change comes with a number of added concerns that affect efficiency. The job needs to be done correctly the first time or the person who is responsible for the task will simply need to do it again. Obviously, this is not ideal from a time-saving standpoint.

Related: Cost Segregation For Multifamily Investors: Why It Is Necessary

Now let’s say that the person is looking to manage several properties on their own. Even if they take the time to learn the basics ahead of time, they are still not going to have the same level of success as someone who has already been taking care of such tasks. Time should be spent on areas that are truly valuable to our objectives.

4. The Importance of Managing Human Capital

People are the most valuable resource of all. That is why it is important to spend as much time as possible investing in people and managing personalities. Those who learn how to manage their human capital are able to get the most out of their companies. Scaling concerns are easier to address and more time is created as a result.

Related: 7 Tips To Assist Long Distance Landlords

While it is certainly okay to get our hands dirty every once in a while for experience’s sake, a house flipper should never allow themselves to become bogged down with the minutiae of day job laboring. Understanding the skills that are associated with home renovation is great. Once the skills have been learned, it is time to take a step back and allow outsourcing to handle the rest!