I hope you are doing well.
Over the years I have been asked a lot of questions from new real estate investors.
One of the most popular questions that newbie investors ask me, is:
“How many rental properties do I need to buy?”
In my mind, the anwser to this is simple.
Most new real estate investors don’t realize that all they need to purchase is ONE rental property.
At the beginning of a real estate investor’s “investing career”, it is easy to get caught up with aspirations of buying multiple properties.
Few real estate investors will be able to do this successfully. Most will only end up buying one property.
Over the years I have observed some limiting factors that have prevented investors from buying more than one rental property. Here they are in no particular order:
The reality is that most people who purchase their first rental property, will only have the capital to buy one property. There is always the exception, and a select amount of investors are able to purchase more properties. These investors utilize their cash savings, or they leverage existing real estate, in order to buy multiple properties.
2. Lack of Ambition
Lots of people do not want to own multiple properties. They are content with what they have. They have no desire to take on joint venture partners. Life is easier for them with only one property, and they want to keep life that way…Easy.
3. Lack of Knowledge of The Real Estate Market
People might be interested in buying more than one rental property, however, they may not know much about the market they are interested in investing in. As a result of the lack of knowledge of the market place, people decide to pass up on the opportunity to buy another rental property.
4. Tenants win the battle
Being a good landlord is not easy. Anyone who has been a Landlord for over 10 years, knows that there are many ups and downs, many great tenants and many horrible tenants. When a landlord encounters a horrible tenant, it can be enough to break that landlord’s spirits. Landlords have to deal with non payment of rent, damage to their rental property, just to name a few things.
Having dealt with these difficult situations myself, I have seen first hand how it can take the ‘wind’ out of a landlord’s ‘sails’. Investors can become ‘deflated’ and nervous to buy another rental property, due to their difficult challenges dealing with a problem tenant.
5. Limited Cash Flow
An investor needs to have cash flow generated from their rental property, in order to make it over the long term. If an investor owns a rental property that is generating a positive cash flow (Rent is greater than expenses), then this investor is putting themself in a strong position to succeed.
If a property is generating ‘cash flow’, this cash can be used towards paying for:
- Repairs on the property
- Paying for vacancy when there is no tenant
- Carrying the property when a tenant is late on rent, or stops paying
Investors get into trouble when they have limited ‘cash flow’. Meaning that they do not have enough funds to pay for repairs, vacancy, or paying the expenses when a tenant is late on rent or stops paying.
If an investor’s cash flow is tight, and they are struggling with their first rental property, chances are, they won’t be too thrilled to take on another headache and buy a second rental property.
Having said all of this, do investors successfully buy more than one rental property?
Absolutely. Many investors do this, all the time.
With some discipline, and running your first rental property like a ‘business’, you too can also manage to buy more than one rental property.
ps: For tips on how to buy your first rental property, please sign up for my First Rental Property email newsletter.
November 7, 2015 No Comments
If you are remotely interested in real estate, this article is for you…
Many new real estate investors when they buy a rental property feel that they will make a lot of money.
When you buy a rental property, If you do things the right way, you will prosper in the long run.
Unfortunately, many new real estate investors do not get off to a good start when they buy their first rental property.
When your real estate investment is not profitable, it is important to be able to identify this. If it is not turning a profit, you need to cut ties and sell your rental property.
There are a lot of variables to consider when buying your first rental property.
To learn more about how to make money in real estate, you can listen to my PODCAT called “Dollars and Cents”. Click on the link below to listen to the PODCAST.
CLICK HERE TO LISTEN ———> Dollars and Cents <———CLICK HERE TO LISTEN
ps: If you are serious about buying your first rental property, I recommend that you read, How To Buy Your First Rental Property Step One
February 18, 2015 No Comments
If you are new to real estate investing, one question that you will face is:
Do you manage your rental property yourself or do you hire a property manager.
Valid arguments can be made for both sides.
However, you should know that most real estate investors, are not very good landlords. As such, if you are not good at being a landlord, you need to get the help of a professional property manager.
Here are 4 Reasons Why You Need A Property Manager.
1) Your Tenant Is Behind In Rent
If your tenant does not pay you on time once, there is a high probability that they will repeat this behaviour again and again. If they are repeatedly not paying you on time, you are not doing your job effectively as a landlord, bottom line. As a landlord, you must collect your rent on time. If you are having trouble with this you need to hire a property manager who will step in and ensure that your tenant pays you on time. Timely rent collection is an essential skill that you require.
2) You Have Not Raised The Rent
Many landlords once they have a tenant move in, never raise their monthly rent. Depending upon where you reside, in most places you can raise the monthly rent on a periodic basis (often annually). If you have tenants that have lived at your rental property for several years, and who have not had their rental amount raised, that is not good for business.
As a real estate investor, you are a business operator. In business, your objective should always be to maximize revenue. What better way can you maximize your revenue than by increasing your rent? Increase your rents…bottom line.
If you are afraid to raise your tenant’s monthly rent, step out of the way and let a professional property manager take over as the landlord. They will be able to give your tenant the proper notice and have them pay the increased amount in rent, guaranteed.
3) You Don’t Like Confrontation
If you are not good at dealing with conflict, you will struggle as a landlord. Whenever a problem arises with your tenant, you will have to be communicating directly with them. It may be a problem that is not your fault, however, you have to come up with the solution to it…that is the job of the landlord…
For example, your tenant may call you frustrated and let you know that their washing machine has not been working for 2 weeks. Further, the washing machine has broken down with a full load of clothes in the wash and that the machine has water in it and is not draining. Further, they might also tell you that they need the washing machine fixed today, because they are all out of clean clothes and they need to have access to the washing machine to wash all of the clothes for their new born baby.
This is a situation that you have to deal with immediately. The longer you leave this situation unresolved, the further frustrated your tenant might become. If you don’t like dealing with frustrating circumstances like this one, you need to have a property manager step in and handle situations like this. They will be able to communicate with the tenant directly and co-ordinate any maintenance people that may be required to come and fix the washing machine in a timely manner.
4) You Are Not Good At Keeping Records
Keeping records is actually a very important skill to have as a landlord. Depending upon how many rental properties you end up buying and depending upon how involved you are with your tenants, you will likely have to keep very detailed records.
Detailed records are required when a tenant has not paid rent. The tenant is now behind with the rent payment. A few days from now, they may make a partial payment of rent. A week later, they may make another partial payment of rent. Simultaneously, you will have to file the paperwork with your local governing body that deals with Landlord and Tenant Issues.
There is a lot to keep track of when things go wrong with your tenant. As the landlord, the onus is on you to keep flawless records. If you are not good at doing this, give up the job as manager of your rental property to a professional property manager.
These are just 4 reasons why someone would need a property manager. There are many other reasons why you should hire a property manager. We will leave that discussion for another day!
ps: If you are new to real estate investing and are looking to buy your first rental property, you might also be in search of the money to do this. Finding money to buy a rental property can sometimes be hard.
The quickest way to find some money so that you can purchase a rental property might be through finding a joint venture partner.
Presenting to a Joint Venture partner is a challenge to a lot of investors. But when you discover there are only 3 powerful ingredients that influence people to say “YES” to your deals, it’s not so hard anymore.
My friend and fellow real estate investor, Joey Ragona just released a video on this, and it’s awesome: https://rl163.isrefer.com/go/JVPF-intro-direct/SBA45/email
He really simplifies and breaks it down, and explains why MOST investors are wasting their time chasing people who will NEVER give them money. You’ll learn:
- Why people say “NO” to your deals
- The 3 HUGE mistakes investors make when they’re looking for JVs
- Joey’s 3-Step Presentation Formula ingredients
- How the 1-Page JV Presentation filters out people who will waste your time
Joey shows you in this video, so check it out before he pulls it down.https://rl163.isrefer.com/go/JVPF-intro-direct/SBA45/email
Enjoy the video. And take some notes. Don’t worry, there’s no opt-in required.
February 8, 2015 1 Comment
If you are new to real estate investing you have probably wondered the following:
“How Much Money Should My Rental Property Make Me?”
Do you have any idea?
If you do… good.
If you do not, don’t worry. I will help you figure this out…
I have a new PODCAST called:
How Much Money Should Your Rental Property Make You? <——(click here to listen to PODCAST)
You need to listen to this PODCAST if you are new to real estate investing and if you are looking to purchase your first rental property.
Even experienced real estate investors can benefit from listing to this PODCAST.
Be sure to listen…and….
ps: Please share this post with any family, friends or co-workers who you think will benefit from this information.
pps: If you are truly serious about buying your first rental property, read the most popular article on this blog called, How To Buy Your First Rental Property
February 2, 2015 No Comments
January 30, 2015 No Comments
Recently, I have been speaking a lot about the benefit of using property managers to manage your rental property. In this post, I will continue with the same. In my new PODCAST I talk about how a Property Manager can specifically save you both:
Listen to this PODCAST if you are interested in saving time and money and you want to buy your first rental property. The PODCAST is called:
How Much Money Can A Property Manager Save You? < —– (click on the link to listen)
ps: please share this post with any friends, family or co-workers who you think will benefit from this information. Thank you!
pps: If you are serious about buying your first rental property, read the most popular article on the blog called: How To Buy Your First Rental Property
January 29, 2015 No Comments
Many new real estate investors get confused on what type of property they should buy. When I first started as a real estate investor, it took me one full year to determine what type of property I was going to buy.
When I look back, I see that as wasted time. If I was able to buy my first rental property faster, I would have made more cash flow and benefited from more LONG term appreciation.
If you are a new real estate investor and you are struggling with what property type you should buy, you need to listen to my new PODCAST.
In my PODCAST I talk about what the different property types are and which property type is the best one for the new real estate investor.
Listen by clicking the link below:
ps: Please share this post with any family, friends or co-workers who you think will benefit from this information.
pps: If you are serious about buying your first rental property, read the most popular article on this blog called, How To Buy Your First Rental Property
January 24, 2015 1 Comment
I recently recorded another PODCAST on Property Management. I will admit, this new PODCAST is better than my previous one.
My previous PODCAST on Property Management can be listened to here:
My “NEW” and “BETTER” PODCAST on property management can be listened to here:
In the PODCAST, I address the question:
Is Property Management Necessary
If you are new to real estate investing and you are looking to buy your first rental property, I highly recommend that you listen to this PODCAST.
ps: please share this post with any friends, co-workers, or family that you think would benefit from this information!
January 23, 2015 No Comments
I recently wrote an article on the pros and cons of property management.
The article was called:
New real estate investors always struggle with whether they should hire a property manager or self manage their first rental property.
You can now listen to this entire article in a PODCAST.
To listen to the PODCAST, click on the link below:
If you are new to real estate investing, I highly recommend that you listen to the PODCAST.
January 21, 2015 No Comments
A long time ago, I wrote an article series called:
It quickly became the most popular article series on my blog.
The entire article series is now available in a PODCAST.
By clicking the link below, you can listen to Part 2 of the podcast called:
If you are new to real estate investing and are interested in buying a rental property, I highly recommend that you listen to the PODCAST.
January 21, 2015 No Comments