My purpose in writing this blog is to give new investors a real world view into the life of a full-time landlord. The reason that I believe it is necessary to provide this real world view is that the gurus promote such a distorted view of the business. Anyone that's watched a real estate infomercial or seen a guru speak at a seminar knows that the gurus paint a very rosey picture of the business. From listening to the gurus, you would think that this business is all about sitting on your yacht while half-dressed super-models count the immense piles of cash that roll in. It's so ridiculous that one mobile home guru says that 'we don't call mobile homes trailers anymore. The only trailer you'll need in the mobile home business, is the one you'll need to take all the money to the bank'. RIDICULOUS!
So, I see my mission as providing a REALISTIC view of the business. Unfortunately, I BLEW IT! A recent question from a reader brought this point home. Here is the question:
"I found your blog very entertaining and enlightening. My question is - How come you seem to rent only to low life scum? Is there no money to be made in buying nicer properties and renting to regular working people?"
While I haven't done it intentionally, I'm afraid that I have provided an overly dark view of the rental property business. The above question really brings home that fact. Let me try to set the record straight.
My rental property business is the best thing that every happened to me from a financial and lifestyle standpoint. It allows me to make a nice living while only working 3-4 hours per day and 3-4 days a week. I can't think of any other business that would allow me to work only 12-16 hours per week and enjoy such freedom.
To provide for my lifestyle, I have several dozen rentals. The vast majority of the tenants are absolutely no problem at all. In fact, I estimate that about 90% of the tenants at any one time are good tenants. Another 9% of the tenants have some problem, but do not warrant being evicted. The final 1% of tenants must be evicted.
My failure in this blog has been to write so much about the 1% of the tenants that are bad. A good analogy is driving. You get in the car every day and go about your business without ever talking about driving your car. Why, because it's routine and boring. However, on the rare occassion that you're a witness to a big car crash, you can bet that your friends will hear about that. In much the same way, I have written about the interesting things that happen to me and largely ignored the boring parts of the business. After all, an eviction or a lawsuit is infinitely more interesting than saying "absolutely nothing happened today".
So, starting today, I will try to give a more accurate representation of the business.
2 comments:
I sometimes make the same mistake when talking with new investors. I guess we all just want someone to say "gosh, that really sucks.." and listen to our woes!
I own 28 units myself and totally feel your pain. You just have a great writing style and I love to read your posts! They are some of the funniest out there when it comes to investment property. Everyone else (myself included), is all about selling why investment property is so great.
So please, please, please, don't completely stop talking about the scumbag tenants! I won't have anyone to commiserate with!
mike i dont think you blew it. I think your niche is in the lower to middle income renters, and generally that is where you will find most of your "problem" tenants, however that is where you make most of the profit. Where as if you go for the upper middle to corporate type renters you will find less headaches with the renters and unfortunately LESS profit.....
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