I wish I knew all of the answers 6 years ago. If I did, my real estate investing journey would have been a smooth one.
Let me take that back.
The journey would not have been ‘a smooth one’. Rather, it would have been much ‘smoother’.
Is smoother even a word?? I am not sure. It is late and I have been knocking on doors non stop for my friend Max these days.
What I am sure about is this…
If you are a new real estate investor, you need to read this article!
Without question, new real estate investors have false beliefs about the reality of managing rental property.
It has been my experience, speaking to countless new investors, that they all panic about the idea of managing their own rental property.
If you are a new real estate investor, and you are reading this, you may think that I am speaking directly to you. The truth is that I am. I am speaking to all new real estate investors. So please listen up!
The Secret To Managing Rental Properties
My property manager friends and property manager readers are not going to like what I am about to say…
If you are a new real estate investor, and you have just bought your first rental property, you must manage your rental property on your own. That’s right… on your own!
There is one caveat to this however. If the property is too far away from where you live (several hours drive) then it is acceptable to use a property manager. However, if the property is closeby to where you live, you must manage it yourself.
Too often I speak to new real estate investors who think that they can simply outsource the task of managing their property to a property manager.
If you do this at the very begining of your real estate investing career, you are in for some serious trouble.
The serious trouble I speak of occurs when you simply do not know how to manage your property. When you are managing the property on your own you are in constant contact (or at least should be) with your tenants. In addition, you periodically should be visiting your property as well, in order to monitor the upkeep of the property. If you outsource these taks to someone else, like a property manager, you are making 2 big errors at the very begining of your real estate investing career.
Your Two Big Errors
Your first error is:
A non existent relationship with your tenant
Real estate investing is a misleading term for buying investment real estate. The act of buying investment real estate should be called ‘tenant relationships’ or something to that effect. The faster you can learn that you have to have great relationships with your tenants, the more successful you will be, and chances are the longer you will keep at it. (investing in real estate)
Your second big error:
A lack of property inspections
Plain and simple: No one will care for your rental property like you would. This includes property managers. As a new real estate investor, it is YOU who has to take the responsibility of inspecting your properties now and then, and making sure that the property is being taken care of.
If you are not keeping your eyes on your property, the smallest maintenance issue can slowly become a major repair.
Example, after a recent inspection at one of my rental properties, my handyman and I noticed some water damage in one of the bathrooms. We are being proactive and taking care of this issue by doing some repairs. Had we not noticed this, and if this problem was left for too long…it would have turned into a major problem and a major repair, costing several thousands of dollars.
New Investors: Take Note
I am not writing this article for fun. I am writing this article to hopefully help some new real estate investors understand one thing.
Manage your rental property yourself!
Do not rely on anyone else to do this. Your life will be much less stressful if you manager your properties on your own. How do you think I know this?
Onwards and Upwards,
ps: New real estate investors, sign up to my blog today. Through reading my blog you will get hints, tips and tricks to help you buy your first rental property.