Owning rental properties and becoming a landlord is a dream that many people have. Lots of people dream of buying a few rental properties and then sitting back and watching the equity grow in the home all the while collecting large rent checks every single month.
They dream that all of this extra money will allow them to quit their jobs, sit on the beach all day long or may hit the golf course every day, and cast their worries to the wind.
Whether you are a brand new landlord or you have experience being a landlord, you’re always looking for the 80/20. Click To Tweet
Hey, it’s a great dream! I know a lot of people that have this dream of owning rental properties. The reality is that you can achieve this dream but as with anything it takes work, time and education!
Notice anything missing in this dream scenario of owning rental properties?
- All of the work
- Fixing the house up
- Finding a tenant that will pay
- Figuring out how to get a great tenant to stay
- How to collect rent
- What to do with problem tenants
- How fast can you get a newly vacant property rent ready
What Is Your Dream Missing?
All of these questions and a lot more are missing from the “dream” of owning rental properties. If you are willing to put in the time and learn about the business, you can easily make extra money each and every month from your rental properties.
Will you hit a few pot holes along the way, sure, but if you have systems in place to deal with the problems, your life will continue to sail along for the most part.
Remember that, whether you are a brand new landlord or you have experience being a landlord, you’re always looking for the 80/20. You don’t want to waste time so you want the 20% that’s going to produce 80% of the results. Owning rental properties should increase your wealth, not your stress.
What do I mean by that?
Do You Know What A Home Run Rental Is?
For example, if you already have rental properties, which ones give you the best results? Which ones are sucking up more of your valuable time?
If you don’t have any rental properties, go to local investor meetings and talk to successful landlords so you don’t get the nightmare instead of the dream.
If you are a landlord that already has a property that is a home run, how great would it be to find more just like that one? So, ask yourself, how do you find more just like that and get them?
Do you know why this particular property is so successful?
- Is it in a great location?
- Is it a great price?
- Does it appeal to a certain type of renter such as singles, couples with kids, retirees, empty nesters, etc?
- Is this a type of tenant that is more financially secure?
- Or it is a combination of factors that make this one property so popular?
Do you have one house that is easy to rent? Do you know why? Click To Tweet
Are a landlord that already has a property that is a home run. How do you rinse and repeat?
- On the flip side, do you have a property that you never seem to get good tenants in?
- Do you have a house where the tenants never pay on time?
- Is high tenant turnover a problem in some of your rental homes?
- Do you have a money pit with constant maintenance issues?
What do you need to do fix the problem or how to you get rid of it and avoid this problem in the future.
Can You Duplicate Your Success? Not Your Failure?
But, the key is that once you figure out why you own one or two rental properties that are easy to rent and keep tenants in, you need to figure out how you can duplicate this result. Hint: it is usually by looking for other properties that are like the one great one.
Typically speaking, homes with 3 bedrooms and one bathroom are the bread and butter of the rental market. Homes with only 2 bedrooms are harder to rent and tend to have higher turnover as they are viewed as “starter homes”.
Avoid buying the only vinyl house on a street with only brick homes. Be careful buying properties located next to or across from apartment buildings or shopping centers because from my experience these houses are much harder to rent and keep tenants in long term.
I used to love homes with basements and garages however one landlord pointed out that the more room a tenant has to store stuff, the more stuff you will have to get rid of when they move out. There is nothing more irritating than going to a newly vacant home and finding the basement and garage stuffed with garbage that you have to pay to remove!
In the end, you have to decide where to spend your limited time and resources in order to make the most money from your rentals. Click To Tweet
Make More Money
Since your end goal is to make money, you need to find a good tenant that pays and stays. No one wants to live in a house that is different from all the others and no one wants to live in a house that is not well maintained.
Buy “typical” houses, maintain them well, treat your tenants fairly, train them properly and you will be surprised at how much easier your life as a landlord is. After all, why would you want to keep getting properties and/or tenants that don’t perform well and just keep costing you money? Who wants to lose time, money and sanity?
In the end, you have to decide where to spend your limited time and resources in order to make the most money from your rentals.
Need Help Pre-Screening?
Don’t know how to pre-screen your tenants. Click here to find out how to find the best possible tenant for your vacant property.