​3 things I’ve learned in my first 3 months as a landlord.

3 things I’ve learned in my first 3 months as a landlord.

My first three months as a landlord have been one of the most volatile times in my life. Before I purchased my first property, I prepped for at least a year. At the time, I felt that would be enough time to limit the amount of mistakes I would commit with my first property. Even though I am sure all the learning and reading helped a lot; nothing beats hands on experience and this is the first thing I learned. That’s not all I learned though. I have also learned that tenants don’t forget anything you tell them. I have learned that the hard way (Sighs). The last thing I learned is that it’s always best to do things the right way the first time.

A lot of the advice I got before purchasing my first property is to learn everything I could and then jump in. Before and even now, it can be scary to jump into something new. But according to the majority of the research, books, and advice the only way to really learn the business was to jump in. They were right. Understanding the general idea of real estate and business in general can be learned with books but the details can only be learned by actually doing it. For example, the first property I purchased made sense on paper and it still does. I accounted for every expense and I also put money away for vacancy, repairs, CapEx and future property management. Going in I felt I was completely ready for anything. Now here comes the experience.

I made sure to save 1 months’ worth of expenses because I assumed that it would take me about a month to find a tenant. I was wrong. It took me 3 months. Because the property was “move in ready” I didn’t account for a new water heater, HVAC repair, Broken Washing machine, broken fridge, and frozen Pipes (https://www.biggerpockets.com/member-blogs/11354/82437-my-pipes-froze). Luckily for me, I was able to weather the storm and as of right now, I am happy with my tenants and I have been slowly recovering my initial funds.

Tenants don’t forget. At least mine don’t.

It was my second month without a tenant and I wasn’t desperate but I was feeling a sense of urgency which is a good thing because this forced me to really step up my marketing game. Still no luck by the end of the second month.

Then finally, in the middle of the third month I find tenants. When they were getting the tour of the unit, they mentioned a couple of things like they were looking for a safe place so I replied by saying “I was planning on adding a security system to the rental anyway”. They mentioned that two bedrooms needed to be repainted so I replied by saying that “I will be painting these rooms anyway”. Every little thing they mentioned throughout that tour led to me replying that I would fix or buy it. I was playing a dangerous game. I ended up offering the unit to these people and luckily for me, the only things they requested were the things I originally offered them. This could have played out differently because I was technically training my tenants to always get their way. Luckily, there have been situations where I was able to train them the other way around but it is more because they seem to be nice people. If I would have had tenants that are used taking advantage of their landlord, they would have ate me up. This is why I now speak to tenants and potential tenants in a very calculated manner.

It is always better to do things right the first time. I don’t know how many more things I need to go wrong until I learn this. I bought a washing machine from a warehouse where they fix broken appliances and re sell them for a lower price. The washing machine didn’t work but I didn’t know because I didn’t install it until the tenants moved in three months after I bought it. The first time my pipes froze, I decided to open the wall a bit and add a vent so the warm air from the unit can work its way up to pipes. Not only did that not work, but the second time my pipes froze, it ended up leading to me leaving tub knob on which eventually led to water over flowing and messing up the ceiling of the bottom unit. I also had to break the wall to insulate the pipes. That lesson cost me about 3K by the way. I can go on forever but the point I am trying to make is that when you avoid the inevitable, you are just setting yourself up for failure. Just do it right the first time and you won’t have to deal with the headaches and extra expenses later.