These days, there are a lot of accidental landlords in the real estate investing business. Most accidental landlords have two choices: Either rent their house to a tenant or, because the property owner can’t afford to make the mortgage payments if their house sits vacant, lose it to foreclosure.
Without any landlording knowledge and without taking any landlording courses, these would-be landlords march into an office supply store, buy a generic covers-all-fifty-states lease agreement, stick a “For Rent” sign in the yard and presto-whamo, they’re landlords!
Let’s see – a landlord with no knowledge, no foresight, no education and no idea of what to do next. Does this sound like the makings of a blood-filled disaster movie to you?
Too many would-be landlords who think landlording is a born-knowing-how-to-do-it thing. It’s not. As with most things, it’s a learned thing.
We’ve all heard the horror stories of tenants who trash houses, call in the middle of the night with a leaky faucet, won’t pay their rent on time, etc. Sadly, it’s these stories that keep most folks from believing that owning rental property is a safe, lucrative, not-hard-to-do investment.
If, instead of talking to a landlord – and I use this word loosely – whose head is stuck where the sun don’t shine, you talked to a trained, educated, been-there-and-done-that landlord, you’d come away knowing that rental property is one of the best investments in America!
Don’t believe me? OK, name another investment that is always in high demand (shelter), is paid for by someone else (your tenant), offers lots of tax breaks (depreciation, mortgage-interest deduction, deductions for repairs and improvements, 1031 exchange), and provides mailbox money (rent checks).
These great benefits are why rental properties have helped more people to become millionaires than any other type of investment in America – including the lottery!
Here’s one of the biggest mistakes we see landlords make: After finding a tenant – with the primary qualification being an active pulse – they think their job is done.
This couldn’t be further from the truth. Folks, landlording begins AFTER you’ve found a good, reliable, verifiable tenant. How you manage the tenant and the property is THE BIGGEST determining factor in how well the tenant treats you and your property.
For example: For the first three months, we’ll inspect the property – both inside and out – once or twice each month. After we’re sure the tenant is taking care of the property, we’ll cut our inspections to three or four times a year.
Why so many inspections? Because if there is a problem, we want to catch it early!
Think of it this way: At work, how often does your boss inspect your work? Probably a lot more often than once or twice a month, right?
Remember: You have to inspect what you expect.
Do you seek real-world real estate investing information? Go to BillandKimCook.com. It’s packed with free creative deal structuring techniques and strategies. Bill and Kim Cook have been investing in real estate since 1995. Their portfolio consists of single-family rentals, a small mobile home park, plus notes and options. If you have questions, give Bill a call at 770-815-8727.
