Landlording is a Business… with Customers!Posted on July 22, 2011 by
The number of people who are terrified of owning rental property and managing tenants is amazing. This unfounded fear is the stopping block that prevents MANY would-be millionaires from ever becoming wealthy.
When Kim and I were in our early thirties, our goal was to retire in our fifties. Not just retire, but to retire with means…enough means to do what we wanted, when we wanted, where we wanted.
At the time – and this is true for most Americans who are in their thirties and forties – our chances of becoming wealthy and retiring early were zero to nil.
Each month, we managed to save a little, plus we regularly invested in the stock market. The problem was, our little nest egg remained just that – little. It wasn’t going anywhere fast.
Here’s the thing: When we bought a share of stock, we paid fair-market value for it, plus the purchase commission. This put us in the hole from hello. The only way we could avoid losing money on the stock was IF the stock went up enough to cover the purchase – and sale – commissions. Yuck!
Real estate – particularly rental property – is a VERY different investing animal. We’re able to buy a property at WAY below market value. In other words, we make our profit when we buy; we don’t have to wait for it to go up in value!
Also, we’re able to buy without using our own money. A few of the creative-financing techniques we regularly implement are: owner financing, subject-to deals, private-money lenders and partnership deals.
Now comes the best part: With rental property, SOMEONE ELSE PAYS FOR IT! That’s right, someone else – your wonderful tenant – pays off your rental property! And even though THEY are the ones paying it off, YOU get all the tax advantages and other benefits that come with owning rental property!
To be a successful landlord, it’s important to remember that owning rental property is a business and that your tenants are your customers! Look at any business. If the store is run down, dirty and shabby, and if the customers are mistreated, abused or ignored, what will happen to the business?
We want to trap our tenants in our homes forever! We do this by giving them a great home at below market rates and providing incredible service!
Remember to keep the big picture in mind: If you own ten free-and-clear rental properties that average $800 a month in rent, that’s $8,000 coming in the front door each month. Can you comfortably live on this?
There are two ways to manage your rentals – do it yourself or hire a property management company. We manage our rentals ourselves, but our friend, David Protiva, hired a management company to take care of his rentals. By paying a small fee, he’s able to enjoy life, collect checks and avoid many time-consuming landlording responsibilities!
If your goal is to retire well and early, why not consider owning rental property?!