First Rental Property

Hi Friend,

I hope you are doing well.

If you are looking to buy your first rental property, you will benefit by reading this post.

Many experienced real estate investors will tell you that you need to manage your rental property like a “business”.

This is great advice because owning and managing one or more rental properties is indeed a business.

According to Wikipedia, a business is:

“…an organization involved in the trade of goods, services, or both to consumers.  Business plan and Business model determine the outcome of an active business operation. Businesses are predominant in capitalist economies, where most of them are privately owned and administered to provide service to its customers.”

As per the definition above, ‘providing services’ to customers is what businesses do.

Many businesses have ‘service agreements’ that they abide by when dealing with their customers.

As an example, let’s look at the service agreements that some major banks have with their customers.

Personal and Commercial Account Managers are often mandated to respond to their customers within 2 hours of being contacted.  This is a service model that some banks have adopted  because ‘customer service’ is very important to these organizations.  These banks understand that by responding to their customers in a timely manner, they are providing them with great customer service.

As a real estate investor and landlord, you need to adopt a model similar to the bank’s  ‘service agreements’.

You may chose not to share your service agreement with your tenant, however, the service agreement is something that you need to understand fully and be committed to.

Here is an example…

A tenant calls you on a Friday morning in the middle of the Summer.  They leave you a voicemail message letting you know that the Air Conditioner unit in their house has stopped working, and they have asked that you give them a call back when you can.

It is my firm belief that as a proactive real estate investor and landlord, you should be responding to your tenant the same day in which they have contacted you, no matter what the matter is.

As such in this example above, you should be getting back to them on Friday as well.

The important thing to note is that you may not have any answer for them nor a solution for their problem when you call them back.  That does not matter.  What does matter is that you are calling them back promptly.

In the example above, you may have no contacts for repair men that you could call to fix or replace the air conditioner.  That is okay.  As long as you communicate with your tenant and let them know that you are looking after their concern, that is what matters.

Naturally when new landlords do not know how to fix something, or when they don’t know who they can call to come and fix something, they delay  responding to their tenant. This should never be done…

So in summary, when your tenant calls you any issue at all, you need to respond to them in a timely manner.

Having a ‘service agreement‘ and responding to your tenant the same day is my advice to you.

If you stay committed to doing this, you will differentiate yourself in your tenant’s mind from all of their past, sub-par landlords.

Happy Investing!

Regards,

Neil Uttamsingh

ps: If you are looking to buy your first rental property, sign up for the First Rental Property Newsletter by entering your email address and name into the top right hand corner of the blog.  If you do this, you will receive tips and tricks from experienced real estate investors on how to buy your first rental property!

Hi Friend,

I hope you are doing well.

Over the past several years I have helped many people buy their first rental property.

During this time, I have also noticed that there are a series of common questions that are asked by new real estate investors.

One of the common questions that always comes up by new real estate investors is:

Do I need to check the tenant’s credit?

The answer to this my friend is, yes.

Any experienced real estate investor will tell you that if you are not careful with determining a tenant’s credit history, you can find yourself in a world of trouble.

In the early days, I made the mistake of not checking a tenant’s credit once, and it did not result in good things.  The tenant did not pay rent, was troublesome, threw parties at night, smoked weed, disturbed neighbours, piled up garbage in the yard, and swore at me.  Needless to say, I ended up evicting the tenant.

All of this could have been avoided had I simply checked the tenant’s credit before hand, as this would have given me a further insight into the tenant’s previous habits.

Beginners make mistakes.  I have made mistakes myself and I know countless experienced real estate investors who have made these same mistakes.

I run a lot of workshops for new real estate investors and I have found that the question regarding ‘checking a tenant’s credit’ always comes up at these workshops.

A while back, I had to take a step back and ask myself why this question kept on coming up.

After some careful thought, I concluded that this question came up time and time again by new real estate investors simply because:

They did not KNOW HOW TO check a prospective tenant’s credit.

The fact that they did not know how to check credit, prevented them from even attempting to check credit.

The bottom line here is that people are generally lazy.  If there is an easy way out of doing something, people will take that easy route.

The easy way out for a new real estate investor to NOT check the credit of their tenant is by NOT CHECKING IT!  Simply put.

The good news here my friend is that checking a tenant’s credit is not difficult.

Now, there are countless Credit Check companies that you can search online via Google.

You can try finding credit check companies by typing in things into the Google Search bar like:

• credit check companies for tenants
• credit check companies in {your country}
• how to check a tenant’s credit

Hi Friend,

I hope you are doing well.

If you are looking to purchase your first rental property, you may have a question or two about rent collection.

If you do, that is normal.

A lot of new real estate investors have questions regarding this topic.

I often get asked by new landlords how they should be collecting their rent from their tenants.

There of course is a variety of ways in which you can do this.

In this blog post, I am going to outline for you a number of these methods as well as some of the potential pros and cons of collecting rent in these various manners.

Here are the methods in which you can use to collect rent from your tenant.

1) Post Dated Cheques

When your tenant first moves into your rental property, you can ask them at the beginning of their lease term to provide you with a series of post dated cheques.  Many landlords do this, because this is a method that works.

This mode of rent collection is both easy for the landlord and easy for the tenant.

It is easy for the landlord because, they do not have to make monthly trips to the rental property to pick up the rent.

It is easy for the tenant because they do not have to arrange their schedule and make time to meet their landlord each month.

There is also a big downside with collecting rent in this manner.

Since the landlord is not travelling to and meeting with the tenant each month to pick up rent, there is reduced opportunity to meet the tenant face to face and build a strong relationship.

2) E-mail Money Transfer / Bank Transfer

In this day and age, technology is awesome!  There are new options available to us in the world of banking than ever before. An example  of this is the email money transfer.    Tenants can now transfer to their landlords their monthly rent in the form of an email money transfer.  This is an efficient way to collect rent and it saves time for both the landlord and tenant.  Scheduling a time to meet to pick up rent in person can sometimes be challenging.  This mode of rent collection solves that problem.

3) Pick Up Rent In Person – Cash or Cheque

Although not practical in every case, this is my favourite mode rent collection.  This is my favourite mode of rent collection because it allows you as the landlord to build a strong relationship with your tenant on an ongoing basis.

Not only does it allow you to build an ongoing, strong relationship with your tenant, this strategy allows you to check on the property on a monthly basis.  If you have great tenants, you get to see each and every month how well they are taking care of the property.  On the flip side, if you have tenants that you are not too sure about, this method allows you to carefully observe the condition of the property.

So there you have it.  These are three modes of rent collection.  There are other ways in which you can collect rent, however, as a new real estate investor, you should focus your efforts on one of these 3 methods.

Happy Investing!

Neil Uttamsingh

ps: If you are looking to buy your first rental property, sign up for the First Rental Property Newsletter.  You can do this by providing your name and email address at the top right hand corner of the blog.  If you do, in the Newsletter you will receive tips and tricks from experienced real estate investors on how to buy your first rental property.

pps: I am a Licensed Realtor in Ontario and I help people like you buy their first rental property everyday! I personally own Hamilton real estate, Oakville real estate and Toronto real estate.   If you need help purchasing your first rental property or your next rental property, write to me at NEIL@FIRSTRENTALPROPERTY.COM. I will help you negotiate the best price, terms and conditions on your rental property. Buying in the US? No problem!  I will refer you to one of my trusted partners.  Happy Investing!  🙂

Hi Friend,

I hope you are doing well.

In today’s blog post, I am going to share with you the most important secret that all new real estate investors NEED to know.

However, before I reveal this BIG secret, Let’s take a step back and go over a few items first….

ITEM NUMBER ONE

If you are just starting out as a real estate investor, I would like you to know that investing in real estate is NOT EASY.  

Many people talk about it, but very few people ever end up taking action and buying a rental property.

Over the years, I have coached and guided many people as they purchased their first rental property.

You may be surprised to know that probably 1 person in 100, ever end up buying a rental property.

Of those people who end up buying a rental property, many are under prepared or not prepared at all.

When the going gets tough, they end up selling their rental property.

They may encounter difficulty with their tenants or they may be faced with repairs and maintenance to the property that they haven’t planned for.

The conflict with their tenants may be unsettling and the best way they know how to deal with it is by selling the property.

The repairs required on the property, may cost them more than they have available.  As such, they might be forced to pay for the repairs and maintenance to the property by using leveraged funds.

Using these leveraged funds to repair the property makes them nervous. They become so anxious that they end up selling the property as a result.

So as you can see, purchasing, owning and effectively managing rental property is not easy.

However, it is not that hard either.

It is not that hard if you:

Never sell you property!

This indeed is the number one secret that you need to know.

If you never sell your property, you win as a real estate investor.

From the time in which you purchase your rental property, there is a good chance that you may face  conflict with a tenant or have to perform unplanned repairs and maintenance on your property.

That is a given if you are a real estate investor.  These things are going to happen.  There is no avoiding them.

The reality is that many people will sell their rental property when things become difficult.

They key thing for you to remember is to never sell your property.

That is the number one secret to buying rental property…

Never forget that…

Happy Investing!

Neil Uttamsingh

ps: If you are interested in buying your first rental property, sign up for the First Rental Property Newsletter by entering your name and email address in the top right hand corner of the blog.  If you do, you will receive tips and tricks from experienced real estate investors on how to buy your first rental property!

pps: I am a Licensed Realtor in Ontario and I help people like you buy their first rental property everyday! If you need help purchasing your first rental property or your next rental property, write to me at NEIL@FIRSTRENTALPROPERTY.COM. I will help you negotiate the best price, terms and conditions on your rental property. Buying in the US? No problem!  I will refer you to one of my trusted partners.  Happy Investing!  🙂

Hi Friend,

I hope you are doing well.  If you are a regular reader to the blog First Rental Property, you will be well versed on the methods people use to find a rental property.

If you are a new reader and you are in search of buying your first rental property, today is your lucky day.

Whether you are a new or returning reader, in this blog post I am going to identify one major that people are  using to find their first rental property.

Here is the method:

1) They use An Investment Savvy Realtor

If you have done any reading at all on how to buy rental property, you will know that you must find and use a Realtor who is well versed with investment knowledge.  It always serves as a good reminder to always seek out the services of a Realtor with investment knowledge and experience as a real estate investor.  The reason you do this is because at the beginning of your real estate investing career, there are going to be many things that you do not know. A good Investment Savvy Realtor will be able to fill in these gaps of knowledge for you, and provide you with guidance based on their first hand experience.

Here is an example of how an investment savvy realtor can help you:

Many new aspiring real estate investors believe that when buying a rental property, it is wise to buy a property in which there are currently tenants residing in the property.  They feel that if there are already tenants in place, there will be no risk of vacancy during the initial first few months of ownership of the rental property.

Some might believe that this is a wise choice.  However, there can be major problems with this type of approach.

A Realtor who has experiencing owning and managing rental properties of her own, can provide the new real estate investor with guidance in this matter.

The guidance in this situation from the Realtor could be as follows:

Realtor:

“It might be a great idea to inherit these existing tenants when you purchase this rental property.  This might be a great idea because it will save you from having a few months of potential vacancy when you are in search of new tenants to reside in your rental property.  However, there is a downside to inheriting tenants when you buy a rental property.  If you are going to inherit these tenants, I recommend arranging a time to meet with the tenants at the house in order to introduce yourself.  Let them know that you are considering purchasing the house and that you are interested in potentially keeping them on as tenants.”

“Ask them about the current landlord and if they are currently having any problems with him or her.  Listen to them talk, and let them give you all the details.  When you are speaking with them, and if they are having problems with the existing landlord, this will be one of the first things that they bring up (indirectly). “

“If they are having problems with the landlord, this is not necessarily a bad thing.  The current landlord may be a poor communicator and overall a bad landlord.  The bulk of the problems could be a result of the landlord and not the tenant.  Hear them out and listen to everything they have to say. “

“After meeting with them and speaking with them in detail, you will have a very clear idea in your mind as to whether or not you would like them as your own tenants.  By meeting with prospective tenants face to face, you learn a lot about them, and it allows you an opportunity to see if you would like a long term business relationship with them. 

So there you have it.  Leverage the knowledge and experience of Investment Savvy Realtors when you are trying to find a rental property for yourself.  Investment Savvy Realtors with experience as investors know all about what it is to be a landlord.  They will be able to provide you with valuable insights that you will not be able to get anywhere else!

Happy Investing!

Neil Uttamsingh

ps: If you are looking to buy your First Rental Property, sign up for the First Rental Property Newsletter.  If you do, you will be able to read about tips and tricks from experience real estate investors, that will aid you in purchasing your first rental property.

pps: I am a Licensed Realtor in Ontario and I help people like you buy their first rental property everyday! If you need help purchasing your first rental property or your next rental property, write to me at NEIL@FIRSTRENTALPROPERTY.COM. I will help you negotiate the best price, terms and conditions on your rental property. Buying in the US? No problem!  I will refer you to one of my trusted partners.  Happy Investing!  🙂

Hi Friend,

I hope you are doing well.

I have been helping people buy their first rental property for many years now.

During these years I must say, I have seen it all.

I have witnessed people buy multiple properties at once, become extremely successful at investing in real estate and never look back.

On the flip side, I have seen people take the plunge into investing in real estate, become overwhelmed, lose money, and quit by selling their rental property shortly after they purchase it.

By a simple conversation with a prospective real estate investor, I can usually tell if that individual is going to be successful or not at owning and managing a rental property.

I have noticed one trend over the years that usually determines whether or not someone is going to succeed or fail as a real estate investor.

The trend is…

How Long The Person Owns The Rental Property

Simply put, when someone buys a rental property and sells it after around the one year mark, this person is going to fail as a real estate investor.  These individuals may end up buying properties again some years down the road.  Even if they purchase more properties years after, this trend still holds true.  They will more than likely sell off their rental property again shortly after purchasing it.

The reasons as to why someone would sell their rental property around one year after purchasing it could be many.

The most common reason is that people find the management of tenants the most difficult part.  In turn, they end up selling the property at the height of their frustration.

On occasion I will meet former real estate investors who have owned properties in the past.  They may be in the market to buy rental properties once again.  The moment I find out that they owned their former property or properties for about one year, I know that they will end up failing again if they purchase more properties. This is what the trends have shown me time and time again.

Another important threshold is the…

5 Year Mark

I have witnessed real estate investors own and manage rental properties for a 5 year time frame and then sell their property or properties after the 5 years elapse.

The reason why some investors do this is because their mortgage term expires after 5 years.  Instead of renewing their mortgage or obtaining a new one, they decide against doing both and end up selling their rental property.

For these types of investors, the decision to sell the property does not happen all of a sudden.  I have noticed that these investors are either not pleased with their investment or not pleased with their tenants for a period of time.

The expiration of the mortgage term gives them a great opportunity to throw in the towel and sell off their ‘troublesome’ property.

So there you have it.

This post is short and to the point. However, it gives you valuable advice on how to avoid failure as a real estate investor.

Don’t sell your property.  That is the bottom line.  Despite what other people may tell you, don’t do it.

No matter how challenging the management of tenants become, don’t sell your rental property.

If you sell your property, you fail.

The objective of owning real estate is to generate cash flow and generate wealth.

Cash flow and wealth generation are not created by giving up.

Happy Investing!

Neil Uttamsingh

ps: Learn tips and tricks from experienced real estate investors on how to buy your first rental property by signing up for the First Rental Property Newsletter.  All you need to do is enter your name and email address in the top right hand corner of the blog!

pps: I am a Licensed Realtor in Ontario and I help people like you buy their first rental property everyday! If you need help purchasing your first rental property or your next rental property, write to me at NEIL@FIRSTRENTALPROPERTY.COM. I will help you negotiate the best price, terms and conditions on your rental property. Buying in the US? No problem!  I will refer you to one of my trusted partners.  Happy Investing!  🙂

Hi Friend,

I hope you are doing well.

Yesterday I received an email from a blog reader.

In the email, the reader provided some feedback as to why they had unsubscribed from  the First Rental Property blog.

With a blog readership in the thousands, I get messages from people all the time that have chosen to unsubscribe.  This is just the nature of having a blog with a large readership.

Some of the common reasons that I get from people who have chosen to unsubscribe are listed below:

• I am no longer interested (in general)
• I am no longer interested in buying a rental property
• I am getting too many emails
• No reason stated

These are the standard reasons as to whey people unsubscribe and I hear them all the time.

However, the most recent explanation that a reader gave me, struck a cord with me.

The reason they had stated, as to why they unsubscribed from First Rental Property was because:

• They wanted more VALUABLE information

Hi Friend,

I hope you are doing well.

If you are just starting out in the real estate investing game, you are probably learning about the concept of Leverage.  You are also probably trying to figure out if leverage is good or bad.

The power of leverage in real estate is a great thing, and leverage should be used in order to buy rental property.

A common question that I get asked by new real estate investors is:

Am I able to use the equity in my home in order to buy a rental property?

A follow up question that I get asked after this initial question is:

“How do I do this?”

For starters, it all depends on where you live.  The rules imposed by Lenders differ depending upon which Country, Province, State, or Territory you live in.

If you reside in Canada, then you should know that most Lenders (Banks) will allow you to Leverage your principal residence (property you live in) up to 65%, 80% or sometimes even higher.

The percentage in which the Lender will allow you to Leverage your property depends upon the lending product that they are providing you with.

For instance, the percentage in which your principal residence can be leveraged will vary if you are requesting from your lender a ‘secure line of credit’ or if you are requesting a ‘re-finance’.

A question that experienced real estate investors begin to ask is:

Can I refinance one rental property in order to buy more?

The answer to this is YES.

Refinancing existing rental properties is a great way in order to purchase more rental properties.  This strategy is used by many successful real estate investors.

Bringing it back to basics, as a new real estate investor you need to determine if you have enough equity in your principal residence in order to leverage it so that you can buy your first rental property.

Don’t delay. The Power of Leverage is an amazing thing.  It can help make your dreams of buying a rental property reality faster than you ever thought possible!

Happy Investing!

Neil Uttamsingh

ps: I am an experienced Real Estate Investor and  licensed Realtor.  I help people like you everyday purchase their first rental property.  If you have any questions or are looking to buy a rental property, feel free to get in touch with me.  Send me a note at NEIL@FIRSTRENTALPROPERTY.COM and I will help guide you through the process!

Hi Friend,

I hope you are doing well.

The expert marketers at Nike once coined the slogan, Just Do It

What a great slogan this has become.

It is such a great slogan that it can literally apply to any aspect of your life.

What were the experts at Nike thinking when they came up with such a slogan?

Just do what?

Just buy Nike shoes?

I have no clue what they meant to be honest, and probably most people had no clue either.  What I do know is that this slogan is a perfect slogan for new real estate investors to  live by.

When a new real estate investor is on the fence and deliberating whether or not they should buy a rental property, I say…

Just Do It.

If you are a new real estate investor looking to buy your first rental property, you need to Just Do It  because:

• Most people don’t ‘Do It’
• Be different, and make things happen
• If you don’t ‘Do It’ and buy a rental property you will not benefit financially
• There will always be fear associated with buying a rental property
• Real Estate education is good, but over thinking and second guessing yourself is not
• You could be able to fund part of all of your retirement if you invest wisely in rental properties
• You will become an entrepreneur and will be able to share your experiences of owning rental property with others
• You will learn with time, that owning a rental property is not hard.  You just have to stay committed to it

I think that one of the reasons why Nike was so successful with their slogan is because it resonated with people on many levels.

People like action takers.  People gravitate toward others who say they are going to do something, and they do it.

Keep this all in mind as you navigate your way towards purchasing your first rental property.

Happy Investing!

Neil Uttamsingh

ps: I am an experienced real estate investor and Licensed Realtor.  I help people like you every day purchase their first rental property.  If you are interested in buying your first rental property, send me a message at NEIL@FIRSTRENTALPROPERTY.COM and I will help guide you through the process!

Hi Friend,

I hope you are doing well.

Surviving long term as a real estate investor is not an easy task.  Experienced real estate investors know how much hard work and effort it takes in order to stay in the game.

New real estate investors for the most part have absolutely no idea how much commitment is involved once a rental property has been purchased.

The title of this post, “Real Estate Investing Is A Game Of Endurance” sums up very accurately the journey of purchasing rental property, owning rental property and managing rental property.

Throughout this game of ‘endurance’, you are tempted to give up when the going gets tough.  When you encounter difficulties with your rental property, the solution that presents itself seems to be to ‘sell the property’ and move on.

This solution that easily pops up, ‘selling’ is the wrong choice.  The urge to unload your investment during hard times should be resisted at all costs.

It is only through experience that a real estate investor is able to finally realize that real estate investing is indeed a game of endurance.

During the early stages of investing, it does not seem at all like a game of endurance.  Rather, the initial excitement of owning a rental property is usually the emotion that last for some time long after your purchase.

Most experienced real estate investors need a support group in order to win the game of endurance.

The support group can be fellow successful real estate investors, a wise business partner, or a fellow entrepreneur.

The support, encouragement and guidance offered by these individuals during rough times is paramount.

To last in the real estate investing game long term, and to endure all of the obstacles that lie ahead of you, draw on the support and encouragement of a select few.

Happy Investing!

Neil Uttamsingh

ps: I am an experienced real estate investor and Licensed Realtor.  I help people like you purchase rental properties every day.  If you are looking to buy your first rental property, send me an email at NEIL@FIRSTRENTALPROPERTY.COM and I will help you get started…

pps: For a step by step process on how to do things the right way, check out my most popular blog post as decided upon by readers, How To Buy Your First Rental Property