Comments on: Rental Properties: How I Got Started http://www.justonemoreyear.com/rental-properties-how-i-got-started/ One couple's story of escaping 9 to 5 until 65 Wed, 20 Jul 2016 17:22:09 +0000 hourly 1 https://wordpress.org/?v=4.5.11 By: Bryan http://www.justonemoreyear.com/rental-properties-how-i-got-started/#comment-350 Mon, 26 Oct 2015 21:32:21 +0000 http://www.justonemoreyear.com/?p=892#comment-350 Are you sure you haven’t been a landlord in the past ARB? It sounds like you have some experience and definitely understand the dynamic. Your’re right, the customer is not always right. To also expand on your point, you are not only the boss, but you are the business owner! 🙂

I think this might be a nice side hustle for you. You certainly have heard many excuses from your retail banking customers with your work. I believe you can read their body language, size up their comments, and pick out the “nuggets of truth” to their stories. The financing and business aspects would be a breeze for you. You can always hire cheap repair people to do to the other work you don’t want or can’t do on your own.

Quick rental horror story: We are animal lovers and have had at least one pet for a while. A deadbeat tenant abandoned three dogs (he was allowed none) at his house and skipped on the rent. He left most of his belongings behind as well. We got a call from some neighbors several days later mentioning that the dogs looked like they needed help. We went over and found them, quickly giving them water and food. Unfortunately the dog pound had to pick them up, we hoped they were adopted. How could someone abandon his or her pets?

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By: Bryan http://www.justonemoreyear.com/rental-properties-how-i-got-started/#comment-349 Mon, 26 Oct 2015 21:19:21 +0000 http://www.justonemoreyear.com/?p=892#comment-349 There are some attractive tax benefits to rental real estate. However, if you do sell a property at some point, the depreciation is recouped to determine the cost value and profit. The rest of the normal business expenses are deductible.

For me real estate worked well because I had little money to invest, however I had great credit. This allowed me to leverage favorable financing terms and work toward paying off properties as quickly as possible. It forced me to focus on the properties and maximize our cash flow.

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By: ARB http://www.justonemoreyear.com/rental-properties-how-i-got-started/#comment-348 Fri, 23 Oct 2015 21:15:16 +0000 http://www.justonemoreyear.com/?p=892#comment-348 Thanks for the mention, Bryan, and thanks for sharing your story. It’s good that your father started you early on this. Most people don’t have this influence, going through life instead as employees and renters rather than property and business owners.

Being a landlord requires wearing many hats, and I wish I had the handyman skills necessary to be a landlord. Fortunately I do have the customer service skills (ugh) to deal with difficult tenants if need be. While I can’t speak from experience as a landlord and business owner, I know that one key difference between dealing with customers vs tenants is that in the latter, you’ve got be firm because what YOU say goes. There’s no being “customer service nice” (as opposed to “normal human being nice”), or worried that you’ll break some arbitrary company policy, or that the person will complain to someone above you. What you say goes and your word is final (assuming you are operating your business in a manner consistent with the law, of course). As you said, YOU are the boss, not some supervisor. YOU are the one who’s right, not the customer.

If you are an employee making the jump to being a landlord (especially if you are a retail or service employee, like most young people), it is vital that you internalize this mindset and attitude. Working at a shoe store or as a restaurant server, you may be required to let the public push you around (double ugh). Here, you can’t do that. It’s your way or the highway. Which I must say I do like.

Of course, you can always hire a property management company to do everything for you. It will eat into your profits, of course, but it may be worth it rather than doing subpar repair jobs, spending your non-existent free time begging people to live in your vacant rooms, collecting rent and dealing with people who refuse to pay, etc. Some people lack the business, maintenance, or people skills to be successful landlords, but can easily pay someone else to do it all for them. Being a landlord and collecting passive income sounds easy and fun until you have to evict a family of four and have to fight with the angry father and the crying children the whole time.

If the idea of being the mustache-twirling evil landlord throwing children onto the streets makes you morally sick or gives you heart palpitations, you may want to consider a property management company if you insist on being a landlord. Ditto if “how to screw in a lightbulb” is something you would actually have to type into a Google search.

Thanks for the great article, Bryan. I definitely would love to read more stuff by you on the subject.

Sincerely,
ARB–Angry Retail Banker

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By: Financial Velociraptor http://www.justonemoreyear.com/rental-properties-how-i-got-started/#comment-347 Fri, 23 Oct 2015 00:40:05 +0000 http://www.justonemoreyear.com/?p=892#comment-347 I still can’t convince myself to take the real estate investing approach. I have a lot of exposure to US real estate already through MORL (which has been a great investment!) I find it is not too much work to earn 12+% returns on liquid assets with high yield, fixed income, and options writing strategies. I’m just not sold that the risk adjusted (especially adjusted for the leverage in RE) is justified for my personal situation. I keep looking at it though. The tax benefits are attractive.

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