It was 8:00 on a Sunday night and our clothes were covered in paint, drywall dust and sweat! We spent the better part of our weekend rehabbing our latest rental. Typically, we try to outsource the “make-ready” work to our local handyman, but on this job we decided to do the work ourselves to save on labor costs. I won’t say it was the most relaxing weekend we’ve spent together, but it wasn’t the first time we sacrificed our days off to work on our rental business – and it won’t be the last either.
I mention the above story to illustrate an important point: in order to be successful in the long-haul, your significant other must be on the same page with your investment strategy.
When I first started buying rental property, one individual who was most influential to me was Mike Zuber. In my first conversation with him, I asked him the same question every newbie investor asks a more experienced investor – what advice/suggestions do you have for me?
What was Mike’s response?
It wasn’t about how to increase cash flow or my ROI; but rather, it was to make sure my significant other was on the same page with my investment strategy. It doesn’t sound like something you would read in a real estate investing book, but I can tell you that this piece of advice has gone a long way in helping to build a healthy rental portfolio.
Over the past three years, I can’t count how many weekends we’ve spent fixing up houses, going to real estate investing clubs, or making random trips to Home Depot.
I love houses and real estate. I’m not exactly sure why, maybe I was supposed to be a contractor in another life, but for whatever reason, I like taking an ugly house and making it look brand new. However, I can’t say the same is true for my wife. I’m sure she’d rather spend her free time reading a book or finding a new recipe on Pinterest.
The point is that we differ when it comes to real estate. For me it’s a passion, while for her, well it’s . . . security.
Let me explain. When I first started going to real estate meetings and learning about buying rental property, she didn’t quite understand why I wanted to keep buying more houses. It wasn’t until after I dragged her to a few real estate investment meetings that she understood that I wasn’t just trying to make a quick buck, but that I was trying to give our family financial security. That is when the light clicked on for her.
It is extremely important that both parties understand the long-term benefits of investing, because real estate isn’t cheap. Even if you’re buying a modestly-priced single family home, you’re going to be writing a substantial check, and if you plan to build a portfolio of rentals, you’ll likely be shifting most of your liquid assets into the business.
Here are a few tips that can help get your significant other on the same page:
1. Sit down and talk about your goals – I know this sounds obvious, but most people don’t take the time to write out their goals, let alone talk about them. Set aside time to talk about what you would like to accomplish and what both parties are excited and nervous about.
2. Be realistic – I’ve noticed that investors tend to only see opportunities with the eyes of an optimist. The sad reality is that nothing ever goes exactly as planned. This is especially true in real estate. Tenants pay late or don’t pay at all. Rehabs frequently go over budget and vacancies sometimes happen more often that you want them to. It is good to understand all the aspects of the business before jumping in. This way, when things don’t go as planned, you’ll already have managed expectations.
3. Real estate is a business – Just like any other business, real estate requires your time. If you intend on being successful, you’ll likely need to frequently use your evenings and weekends to visit your market, manage your properties, fulfill repair requests, etc. The good news is that, over time, you’ll get better at managing your business, but you’ll always have to be involved to some degree.
4. Ownership – It is also important that both parties feel a sense of ownership over the business. If your partner looks at the rental portfolio as “your” business, then you’re destined for failure. I’m not saying that both parties have to be investing equal amounts of time, but both of you should have a healthy input regarding the overall direction of the business.
5. Make the most of it – Whenever possible, try to use the time spent in the business as time to develop a closer bond. I know this might sound corny to some, but using the extra time in the car ride can be a great way to catch up on the week’s events. One thing my wife and I do from time-to-time is stay in a hotel the night before we have to work on one of our properties. Our market is about two hours away from our house, so we use the night before as a mini date night.
Maybe you won’t choose to spend your weekends fixing up junky houses with your significant other (like I do), but regardless, taking the time to make sure you and your partner are moving toward the same goals is essential for success in this business.
Readers, what are a few things you do to stay on the “same page” with your partner?