Before I started my journey to financial freedom through real estate investing, people told me horror stories about being a landlord. From 2AM calls with broken toilets to tenants trashing my property, people had me thinking being a landlord would land me into a heap of misery. Fast forward 3 years and almost $15k a month in passive income later, I’m glad I didn’t listen to these 5 common myths about becoming a landlord!
- You will get calls at 2AM to fix broken toilets– I have never received a single call in the middle of the night to fix a toilet. In fact, my tenants don’t ever call me. More frequently, I receive a polite email when something needs fixing. When I carefully screened and onboarded my tenants, I set the tone for our relationship which included setting expectations on what constitutes an emergency versus what will be addressed within a reasonable amount of time.
- Your tenants will trash your property– I’ve never encountered a time when a tenant trashed my property. Sure, your properties will see their fair share of normal wear and tear, but in the tenant onboarding process, I set clear expectations that if my tenants took care of my property, I would make sure they were taken care of too. One of the ways in which I encourage my tenants to take care of the property is by setting a good example. This includes repairing broken items immediately and sending a professional cleaning service annually to show my tenants I care about them having a clean space to live.
- Cash flow is king- True, many landlords choose to enter the property game to earn an immediate monthly income. The truth is, many properties with immediate cash flow come with a great deal of headaches. From stubborn tenants to costly repairs, often a property that seems too good to be true probably is! My philosophy is to invest in well taken care of properties with good bones, invest in some key cosmetic upgrades, find great tenants who will take care of the property and pay their rent on time, and slowly and steadily grow my cash flow over time. I’m also always looking for properties that are likely to appreciate in value over time, helping me double down on leverage to grow my net worth!
- You Can Only Make Money in Low Cost Areas– While it’s true that some do very well buying multiple units in lower cost areas, I’ve grown my real estate investment portfolio in a high cost area buying single units. While these properties are more expensive to obtain, they also command much higher rents. I earn my $15k per month by renting out several units rather than 20+ units. It comes down to knowing your area and what rents you can command. Successful landlords thrive in both low and high cost areas when they do their homework!
- Landlords need to know how to fix things– While it’s true being handy will help you solve some small problems that may arise in your units, every repair can be solved by outsourcing to either your tenants or someone in your network. Having your tenants help fix items is a great strategy, and one you should outline when you onboard them. Simple repairs like changing lightbulbs or filters can go a long way to saving your sanity. Larger more complex repairs should always be handled by a professional, but it’s often helpful to have your tenants triage these issues by sending videos or talking them through simple solutions that might fix the problem before calling in a professional and spending money.
Don’t let myths and horror stories about being a landlord deter you from starting & growing your own real estate investment portfolio. While it’s true it takes work to become a landlord, you can institute systems and practices that limit the heavy lifting and before you know it, you’ll be making money while you sleep!
What is getting in the way of you getting started on your journey to financial freedom through real estate? Get started today!