First Rental Property

Real estate investing is no different than grade school.  During your school days there were always those students that learned very quickly, as well as those that picked up on concepts a lot slower.

The same difference in learning exists with real estate investors.

Just because some real estate investors learn faster than others does not mean that they are any smarter.

More appropriately, the speed at which a real estate investor learns is directly related to two variables.

These variables are:

1) Volume

2) Market

Volume

Let’s look at the following example.

2 real estate investors are new to the world of real estate, and they buy their first rental properties on the very same day.

One real estate investor goes on to buy a total of 5 properties during the course of 5 years.

The other real estate investor does not buy any more properties, other than the first purchase.

The investor that bought more properties, will more than likely become a lot more knowledgeable than the investor holding one property.

This is due to volume.

When you are an investor holding multiple properties, you are exposed to multiple issues.

In this case, you would have 5 different tenants to deal with at any given time.  You will also have 5 furnaces to maintain, and 5 air conditioner units to maintain.

Overall, you will be responsible to carry out any repairs and maintenance as well as property management on 5 different units.

Due to the higher volume of activity, this investor will learn more and become more knowledgeable in general than the investor that holds one property.

Therefore, if you want to become a more knowledgeable real estate investor, increase the amount of properties you own and manage.

Market
The second variable that effects the knowledge level of a real estate investor is the market that they invest in.

In my experience, real estate investors learn who own properties in a  high income neighbourhood, learn at a slower pace than those investors that own properties in a low income area.

It has been my experience that tenants that occupy rental properties in high income neighbourhoods generally are more independent than tenants in low income neighbourhoods.

What I mean by this is that if you own a rental property with higher income earning tenants in a nice neighbourhood, you will probably not be dealing with any non payment of rent issues, or any evictions due to non payment.

This of course is not always the case, as any tenant, no matter what neighbourhood they live in can all of a sudden not pay rent.

However, generally speaking, higher income earning tenatns are more independent.  As a result, an investors that owns in this type of neighbourhood will deal with very few tenant issues.
As you continually learn more about real estate investing, keep in mind the importance of:

volume and market

If you can get more experience dealing with multiple tenants, and you can get experience owning and managing rental properties in a wide range of markets, you will be well on your way to becoming a well rounded and knowledgeable real estate investor.

Best Regards,
Neil Uttamsingh

ps: If you are interested in real estate and want to learn how to buy a rental property, subscribe to my blog today!

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