Are you a new landlord? A reluctant landlord? Or perhaps just an accidental landlord? Just starting out investing in Real Estate or worse being thrown into the position of being a landlord can be rather eye opening.
Often new landlords get lulled into the business by its apparent simplicity. At first glance it’s just collecting rent and reaping profits. Trust me, it’s not that easy!
After being in the business of being a landlord (note I said business!), since 2003 I’ve learned a lot. Some of the lessons I learned have been rather painful and some rather costly, but throughout these experiences I’ve learned to make the experience easier and less painful as I go.
Spending $$$’s to Save $$$’s
When I started out I knew I had to get up to speed fast. I knew there was a ton to learn and since I’m an action taker, I didn’t want to drag it out. To speed up the process, my wife and I spent thousands of dollars on training for just about everything under the Real Estate sun, including how to be landlords.
Much of the information we learned made a huge difference to how we ran our business (again that word business) and by putting money directly into our landlord education we were able to fast track everything.
However, some of the information and training we took was just a gateway for marketers to sell us more training we didn’t need. These bright shiny training courses often ended up being a distraction, a waste of time, or worse yet a stack of expensive binders and CD’s collecting dust on my book shelf.
Helping Landlords Learn the Rental Business
Again that word business, obviously it’s time to explain why I call it a business and this is lesson one! The first thing I try to explain to new landlords is they have to treat landlording as a business. Landlords who don’t run their rental properties as a business often make painful and expensive mistakes that business owners don’t.
By treating your operation as a business it’s easier to take the emotions out of it and this was one of my first lessons as a landlord. You see, I had to evict my very first tenants, because I let emotions rule my decisions rather than following business rules. Worse yet, I evicted them just before Christmas. Aren’t I a Grinch?
How I Screwed Up
So where exactly did I go wrong? Oh where should I begin!
- First off, when we let these tenants in, we felt bad for them as they had a really sad story. They were having problems finding a place, they had young kids and the mom was doing part time sewing work to help them get by. Life was tough for them and we could help them out. How can you not want to help? We’ve since learned having systems and processes we follow help us make business decisions and not expensive heart felt decisions.
- Second, we didn’t do all of our diligence on them before they moved in. If we would have called all their references, checked all of their details and looked into their history a bit more we would have found out why they were having problems finding places to live.
It was because other landlords were following screening systems and checking references and avoiding them like we should have. We’ve since implemented a very thorough screening system that I have turned into a full blown course for landlords that should be available by mid-March if you want to ramp up your screening!
- Third, we didn’t take immediate action when they missed a payment in October. We tried to help them because of the issues they previously had. Fast forward to December and they ended up with three months of free rent at my expense. Never mind the week over Christmas it took me to repaint the entire suite, to repair the damages and to replace everything that was broken (they only moved in during the summer!).
If we had taken action immediately I wouldn’t have fallen into what I call the Eviction Spiral. It’s something all landlords should avoid.
Helpful Landlord Tips
But landlording doesn’t just end with avoiding the eviction spiral. That’s why you’ll find more articles, videos and courses throughout my site to help make landlording easy for you.
From dealing with tenants to the business of managing your rental property and even renovation tips to maximize your rental property, it’s all here.
If you want weekly tips from me, you can even sign up for our weekly emails. These emails provide even more tips and solutions to help you become an Educated Landlord! Visit www.theeducatedlandlord.com.
[Editor’s Note: Educate yourself! Know the laws! Attend AOA’s FREE landlording seminars and purchase Nolo’s California Landlord’s Law Book: Rights and Responsibilities – the book with the “essential legal information every landlord needs!” AOA offers the law book at a discounted price to members. Order yours today!]
Bill Biko has become “the Educated Landlord” through both training and the school of life. With almost a decades experience of land lording Bill’s been mentoring and assisting landlords for the last five years and you can find more of his tips and articles to make your life as a landlord easier, more profitable and less stressful at www.TheEducatedLandlord.com.