When I first started buying real estate, I made a conscious decision to avoid rentals because I had no interest in being a landlord. Like you, I heard all the horror stories of nightmare tenants, late night plumbing problems, lead paint hassles, and evictions. I wasn’t interested in putting a lot of time and effort into screening tenants, dealing with vacancy and repair, and going to court.
In fact, the very first book I bought on real estate was Lonnie Scruggs’ Deals On Wheels, a brilliant treatment of mobile home investing, and a more dedicated "anti-landlord" than Lonnie has never been born. The entire concept of buying and selling mobile homes, as developed by Lonnie, evolved as an answer to his "tired landlord" syndrome.
After reading Lonnie’s book, and others like it, my mind was more set than ever- I would never buy rental property. I would never have a tenant. I would NEVER, EVER be a landlord.
My how times change. Based on the knowledge I have gathered over the last several years as a real estate investor, and conversations with hundreds of experienced investors, I now know that it’s not what you do, but how you do it, that determines the level of frustration you experience with ANY type of investing, rental or otherwise.
In short, it’s the position you choose.
Choose A Position Of Strength
You can be a landlord if you want. I choose to be an investor.
Landlords do many things that investors don’t, unless they choose to. Let’s compare:
Landlords put up "For Rent" signs, place newspaper ads, and hold open houses and showings. Landlords deal face to face with tenants, screen them, and do background checks. Landlords tell tenants they’re approved (or not), explain the rules to tenants, and sign leases with them. Landlords collect deposits and rents.
Investors hire professional property managers.
Landlords take tenant phone calls when there are problems, no matter what time it is. Landlords tell tenants their rent is late, assess late charges, and enforce rules. Landlords apologize to neighbors for unruly tenants, cut grass, and plow snow. Landlords fix appliances and leaking toilets.
Investors hire professional property managers.
Landlords apologize to tenants for problems, fill vacancies, and inform tenants they are not getting their deposit back because of damage done. Landlords evict tenants and go to court with them. Landlords do many, many other things I don’t want to do.
What about investors? Let’s see.
Investors hire a professional property manager to handle all of the things that landlords do themselves. Which is easier, more cost effective, and a more efficient use of your limited time? If you answered, "Hiring a professional property manager," you’re right!
A quality property manager is worth every dollar you pay them. They will make sure that your units are rented to the right tenants, that the property is well cared for, and the tenants are happy. They will fill vacancies and answer trouble calls. They will deal with repairs and evictions. They will handle the bookkeeping, collection of rents, and assessing of late charges. They will form a buffer between you and the headaches of running a rental property. They are experts at all of these things, and much more.
You will get a check at the end of each month.
Get the picture?
It seems so simple, right? Why does it take some investors, including me, so long to see the difference?
Change The Way You See Yourself
It’s all in how you view yourself. When you see yourself as a landlord, you fail to recognize that your time is better spent doing what puts money in your bank account- namely, finding and acquiring property that meets your investing criteria. Unless you are a plumber by trade, or a professional property manager, or landscaper, wouldn’t your time be better spent doing what you have learned to do so well- investing in real estate?
Does that mean that if property management is something you love to do, something you aspire to, you shouldn’t do it? Of course not. If you have a passion for managing your own properties, and you like the idea of being a landlord (with all that entails), by all means go for it. I’m not trying to change what you love- I want you to see that you have a choice.
Maybe you’re like me. I had to teach myself to think differently about who I am- to think like an investor, not a landlord. When you begin to think like an investor, you start approaching real estate like a business rather than a hobby. You realize that you don’t have to do everything yourself just to save money. You come to understand that doing everything yourself is most likely costing you money- maybe a ton of money.
To repeat, the two keys are:
1. Learn to see yourself as an investor.
2. Learn to think like an investor.
Are your strengths really in the areas of landlording I listed above? If so, fine. Keep doing what you’re doing. But if, as I imagine, you are better suited to finding deals and bringing them to the closing table, then hire a pro to manage the properties you decide to hold and rent. Play to your strengths- you will multiply your time and your business will grow like a thoroughbred racehorse bursting from the gate.
Now, go make more offers!
Tom Dunn is a successful real estate investor and author of the popular DealFiles Real Estate Investor Stories free newsletter. You are welcome to share this report, unedited and in it’s entirety, with anyone you like. You may not remove this text.? 2006 by Tom Dunn. Website: http://www.dealfiles.com e-mail: email@example.com