When you’re just getting started as a new landlord and buying your first rental property, the learning curve is very high. There is an enormous amount of information to find, read and gather before you take the plunge. Some examples include doing a property analysis before buying, all aspects of managing your rental and how to deal with problems as they arise. All of the information you could ever need is available online but it’s time consuming to sift through it all to find the useful articles and true expert landlords that can help you along the way. It took me many years to find everything I needed and create a system for myself to keep my rental property business running smoothly.
What starts out as a difficult task though, soon becomes a joy as your confidence grows, your rental business grows and you see a significant increase in your net worth. Eventually you will know more about buying and managing rental properties than you ever dreamed possible. You might think at that point you’ll sit back and relax and let things take care of themselves for a while but that hasn’t been my experience at all. Even after many years of being a landlord and managing my rental properties, I still visit rental sites and blogs regularly both to find information and opinions or offer my own. I remember exactly what it was like when I was just starting out and all of the fear and uncertainty that I experienced. Now I use that to help and encourage new landlords that are just getting started, just as it was done for me in the past.
My best advice to everyone reading is to always keep learning. If you’re at the beginning of a new venture, it doesn’t have to be daunting. Buy one book, take one course, visit one blog…eventually it will start to feed on itself and then watch out! You’ll be unstoppable.
To your success!
A lot of new landlords getting into buy and hold real estate try to acquire as many properties as they possibly can. They realize that real estate can be a lucrative business – especially over the long term and they want to capitalize on it as much as possible. More so once they’ve overcome their fears, gotten their feet wet by buying a rental property or two and feel more confident about what they’re doing.
A lot of “would be” landlords think they have to follow this philosophy too. Once they’ve decided that this is where they are going to invest some or all of their savings, they feel like they will need to acquire as many “doors” as possible to make it a worthwhile venture.
Let’s face it, this can be daunting to someone just starting out in real estate investing. Not only fear of taking the plunge and buying their first property but fear of then having to build a real estate empire.
Most people are also thinking, “I’m already so busy, how will I manage this all?” With kids, a job and a million activities, it’s hard to become a property manager as well. And unless you start off with a lot of positive cash flow (difficult), you will need to keep a day job and manage the property or properties yourself.
The point of all of this is – you don’t need an empire or the stress of thinking you need an empire. Even one rental property puts you way ahead of the game and on the road to financial freedom. Then you can decide if you want another or if you want to put other investment money elsewhere.
Managing 1 or 2 properties yourself is completely doable, even with a whole other life. I’m married with 2 very busy kids, a guinea pig and I work a lot. But I manage 2 residential properties and 1 commercial property with minimal stress and few issues. I started with one, figured everything out and then bought another one a couple of years later. A year after that I was approached about buying a commercial warehouse and I knew I could take that on as well. And to be honest, that’s good for me. I like having time to spend with my family and working on my other ventures and I feel GREAT having these 3 appreciating assets being paid off for me while I do that. You will too – so take the plunge and stay calm…it will all go great!
While writing my blog I go back and forth between the terms “beginner landlord” and “novice landlord” to describe someone that is just starting out in real estate. Beginner landlord doesn’t sound quite right to me but it seems like a much more common word than novice. Eventually I just looked up the true meanings:
Beginner: person unskilled in something.
Novice: person just learning something.
Novice is way better as you are learning new things as we speak just by being on a rental property site. Although this post isn’t all that helpful:), just be happy knowing you’re a novice…one step up!
Rental properties come with expenses. Some are big, some are small, some are expected and some come as a big surprise but there is always something that comes up so landlords need to be prepared.
Here are some of the more common expenses that a landlord can expect with their rental properties:
So, why is it so important to repair and maintain your properties? First, your tenants are paying off your investment so they deserve to live in a property that is safe, secure and has everything in good working order. Second, a good landlord that responds promptly to requests for maintenance will be much more successful in building long term tenant relationships which are the cornerstone of a good rental property business. Third, looking after your properties will also add value to your investment as your property values continue to rise with these improvements, repairs and maintenance.
If you’re like most people, you likely don’t have a lot of extra cash on hand every month but that should never stop you from looking after your investment. Ignoring problems can and will lead to run down properties and a lower grade of tenant.
There are two key ways to overcome the problem of unexpected expenses. The first is to try and build a reserve fund from your monthly rents. If you have any surplus after your bills are paid each month, put this aside to cover these expenses. The second is to have access to credit. Putting a line of credit in place for these expenses will give you piece of mind that you can handle the unexpected and with interest rates so low, you can pay it back quite easily in small increments.
For new landlords, there are always fears and uncertainties when buying that first property. Anything that can be put in place to ease those fears is a good thing and will be so helpful in moving the dream into a reality. To your success!
As a landlord, whether you are just starting out or have years of experience, there are always going to be bumps in the road. You can be well organized, prepared and have all the best systems in place but eventually there will be a crack in the armor. And when these cracks appear, how you handle them is what matters most.
The truth is, some tenants are very savvy and have made lying an art form. When they get past your radar and take up residence they can make your life very difficult until you can remove them. Sometimes the rental property you purchased turns out to be a bit of a money pit with far more expenses than you anticipated. Occasionally, everything seems to happen at once with one property remaining vacant for an extra month or two and another with some major repairs that need to be done putting a real tax on your finances.
When disaster strikes, it’s easy to think “owning a rental property sucks” and “my friends were right – why did I ever think this was a good idea? Dealing with tenants is a nightmare”. Getting caught up in that type of thinking tends to spiral and the next thing you know you’ve sold your rental property and are now advising people yourself not to do it – it’s not worth it.
Here’s some advice that comes from experience. The best solution for any problem related to your rental property (and life too for that matter) is acceptance. S*^t happens. Things don’t always go according to plan. Sometimes they’re so far off the plan that you can’t even remember what the plan is. It is what it is so the best thing you can do is deal with it, learn from it and add it to your wealth of experience to help you with things in the future. Don’t rail, don’t freak out, don’t give up. Take it in stride, do what you need to do to fix what you can at that point in time and stick to your long term plans and goals.
Despite all the bumps in the road – owning rental properties is one of the best decisions you have ever made and it will go a long way to increasing your wealth and helping you achieve your financial goals. Deal with things as they come, don’t dwell on the past and don’t anticipate bad things coming in the future. Owning a rental property makes you far better off than the majority of the population so hats off to you! Good things will always come your way.
Sometimes you have to ride over the bumps in the road to avoid running off a cliff. Other times you may have to fall into the potholes to avoid hitting the trees. Some days you have to experience the wrong turns, to recognize the right ones. There is no better navigation system than bad experiences in life so that we can recalculate our lives through better choices to reach our intended destination. Eugene Nathaniel Butler
To your success!
So, you want to become a new landlord? Haven’t you heard the horror stories? 3:00 a.m. calls for a plugged toilet, tenants that don’t pay their rent, nasty evictions…it’s a minefield out there. But maybe you’ve heard the upside too. That owning a rental property substantially increases your wealth because you have a solid asset that someone else is paying off for you.
So how can you, a would-be new landlord, avoid the pitfalls and reap the rewards? How can you dodge the disasters and turn this into a profitable, hassle-free venture? The key is to start out on the right foot. Putting everything in place and being prepared will ensure that your experience as a new landlord is a positive one. Sure, there might be bumps along the way, but if you’re prepared, you’ll meet these challenges head on and overcome them.
The best way to prepare is to learn from experienced landlords that have come before you. Al Williamson and I met on the Bigger Pockets Real Estate blog and decided to share our own experiences by putting together an infographic called “The Top Ten Best Tips For New Landlords”. We think these tips will be very helpful to someone that is just starting out in the rental property business and I’ll break them down here for you in more detail.
Becoming a new landlord might seem like a huge learning curve and in the beginning it really is. Use our inforgraphic “The Top Ten Best Tips For New Landlords” to help you keep all of these points in mind as you start out. Al and I sincerely hope you find it helpful and we wish you all the best with your rental property empire!
When you finally have a little money saved and you’re thinking about investing it for your future, the road to prosperity can take you in many different directions. There are so many different ways to make money and so many ways to invest it for the future. Whether you’re just considering purchasing your first rental property, starting a business or looking at other types of investments to build your wealth, it’s a great idea to start with some personal finance building blocks. In this “Steps to Success” blog series I’ll offer you some of these different ideas to get you started. In each post I’ll give you two new ideas to try to help you enrich your life. Yes, most of it is about personal finance but you’ll soon see that many principles can apply to any part of your life. The REAL secret to success is balance after all.
In this first post, I want to focus on making a plan for what you want in life. Once you have a vision of what you’d like to accomplish and have, we can look more at the specifics of how to get there. Here are two ideas to get you started.
When you’re planning your financial future, you hear about setting goals all the time. The reason is, it’s hard to get there if you don’t know exactly where you’re going. I think one of the reasons that people don’t take this step is that there’s too much information about the best way to set goals. When I type “setting goals” into a Google search, there are 179,000,000 results and everyone has a different opinion. “Write them down, make them S.M.A.R.T., dream big, start small, be specific.” Suddenly just setting a goal seems like a big deal.
The truth is though, if you want to get ahead and be successful, you have to set goals. When you set a goal it gives you a vision and it also gives you the motivation to achieve it. There is also a great boost of self confidence when you accomplish your goal and that in turn keeps moving you in the right direction, towards the success and wealth that you desire.
The best tip that I ever learned was from Jeffrey Gitomer who is a leader in the Sales industry. He recommended using sticky notes, writing down a goal and posting it to your bathroom mirror. Small goals, big goals, short term or long term, any kind of goals. Personal goals, financial goals…they don’t have to be written a certain way or in a certain format. The point is you see them every day and they take root in your mind. As you accomplish your goal, you move it from your bathroom mirror to your bedroom mirror and take great pride as you watch that bedroom mirror fill up.
I have followed this advice for a couple of years now and it’s worked very well. I’ve accomplished many of my goals and it DOES feel great to see that bedroom mirror fill up. It also feels great on the inside to know that I am steadily moving forward in the direction of my dreams.
Give it a try! And by all means, tell me what you think.
I am a big believer in the dream board and I recommend it to everyone I know. Dream boards are a collection of images that help you visualize the life of your dreams. It might contain images like your lakeside mansion, your ideal fit body, your dream vacations and your perfect job. There’s no limit to what you can put on a dream board. They’re your dreams…go wild!
Dream boards are different than goals as you don’t really need to have any idea how you’re going to achieve it. Just looking at it every day and imagining yourself living that ideal life puts the universe in motion to bring it to you.
Dream boards are fun to put together. I use a plain cork board from Walmart and look through images on Google. When I find one I love, I cut it out and add it to the board. Once you start you’ll come up with all kinds of ideas and big dreams. I keep my board in my home office so I see it every day.
Once you have your board, all you have to do is put your imagination to use and imagine yourself living that life right now. Add a little unwavering faith that it’s all coming to you and feel happy about your present life every day.
It’s just that easy…try it!
I really hope you’ve enjoyed the first blog in this series. It’s a little different than just talking about rental properties but there’s a method to my madness. I think beginner investors and beginner landlords are often overwhelmed and become paralyzed by a lack of confidence in themselves and their abilities. Starting off with some ideas that help your mind, your attitude and your outlook will make those big challenges seem more achievable. I often think, “there’s more to investing than just money and know-how”. There are other things you can learn about yourself, how you think and how you handle what life throws at you that can really make a difference in your life. To your success!