Dear New Landlords: 7 Things an Experienced Landlord Would Like You to Know

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Dear New Landlords,

Welcome to the landlording world! We older-timers are really excited to have you here. While you get started in the the landlording world, out on your own or in the BP Forums, reading the blog articles or listening to the BP Podcast (which if you haven’t checked this out, you need to head over right now!), I wanted to tell you a few things about myself and some of the old-timers. I hope this helps you better understand us.

1. We are experienced a.k.a. jaded.

2. We will give you lots of advice you think is stupid.

Trust me, the advice is not stupid; there is a reason we say these things. Unfortunately, if you don’t give yourself a chance to learn from us, you’ll you have to learn the hard way. Which means loss of money, time, and lots of energy.

3. If you are looking at this from a tenant’s perspective, you will think we are either mean, stupid, or practicing bad business.

Related: The Landlord’s Guide to Dealing With Problematic Tenants

But we act this way — firm but fair — because we treat landlording as a business. Our goal is to make money!

landlord-friendly-states

4. We don’t have theoretical thoughts.

We aren’t sharing book smarts; we are sharing lessons learned from doing, as we have learned the hard way. So when we tell you we don’t do something because of X, it’s because we have already been burned because of X.

5. We’ve learned that longevity is the true teller of success.

Those who figure out this business are those who have stayed in business. So see how long people have been in this business. How many houses they own?

6. We will give you our 100 percent honest opinion — and trust me, you won’t always like it.

We aren’t saying these thoughts to be mean, but to save you the heartache we learned the hard way. (P.S. I still get advice that I didn’t like, but it has saved me time after time). The reality is, the truth is not always gentle, and no one likes to hear they are doing it wrong. Yet if we don’t learn from our mistakes — or even find out we are making mistakes — we can’t grow.

7. Lastly, we wouldn’t respond if we didn’t care and didn’t want to pay it forward.

There are many experienced landlords who don’t speak up because they are tired of push back. Experienced landlords have nothing to prove. Their bank account is doing awesome no matter if you do or don’t take their advice. Truth be told, if they really wanted to help their business, they would keep their mouth shut and let you fail. The more people who think real estate is awful and who stay renters, the more it only helps us as landlords. Less competition in the market and more demand. But we, the experienced landlords, are still here. We are believers of paying it forward and taking care of others, so we are here day-in, day-out to pay it forward and help others be successful. We give you advice even when you don’t want to hear it. So please, before you get cross and snap back, remember, we are only here to help, and if you don’t want the help, don’t ask. We won’t tell you what you want to hear just so your feeling aren’t hurt.

landlord-policies

Related: The Best Landlords Are Firm But Fair: Here’s How to Adopt Their Principles

Again, I welcome you to this world. I am excited to have fellow investors, no matter your reasons, to go through this journey with me. Make sure you participate, as we can’t wait to celebrate your success, help you through you the bumps, and listen to you vent. We get it, as we are walking the same path. If you pay attention to the posts and watch other people’s mistakes, I promise you, you will learn virtually and save yourself a few mistakes. I know I have learned so much, made great friends, and have grown without having to learn the hard way.

Sincerely,

The Crazy Landlord Who Has 8 Rentals in 3 Different States Who Self-Manages Them All

P.S. Yes, landlording can be profitable. I not only made up my corporate salary, I exceeded it!

Experienced landlords: Anything you’d add to this? New landlords: How has your journey been thus far?

Let me know with a comment!

About Author

Elizabeth Colegrove

Elizabeth Colegrove is a passionate "buy and hold" investor who specializes in turning her once-negative transient lifestyle (Military) into a positive lifestyle. She self manages her entire real estate portfolio from long distance while holding down a full time job. When she isn't finding new real estate deals, she enjoys traveling, hanging out with her awesome boat-building husband, playing with her mischievous kitty, or writing on her newest project, her blog.

14 Comments

  1. Steve Vaughan

    Should be required reading for all new b&h’ers who take on the noble task of self-management, Elizabeth. I believe everyone should try it on their own at first, maybe with placement help. Talk about a learning experience. How will you know if your PM is performing if you don’t know what performing looks like?

    Your article will put new folks in the right mindset when they enter the LL forums. I’ve always found your advice to be on the nicer side, actually. You seem to be more sensitive to the OPs feelings than most. Others really tell it like it is and their callousness shows through. LLing can do that to you. I often wonder why they even bother doing this anymore if they hate it so much. Extra kudos to you for writing this! No nonsense truth is what happens when one doesn’t have an angle and isn’t selling anything.

    What would I add? Something I did early on that really helped my LL biz is establish a Mgt Co for myself and act as Regional Mgr of that anonymous sounding s-corp. Putting a layer between the tenant and the big bad greedy owner has smoothed relations with my tenants a ton. I can be on their side when something isn’t exactly as they expect.

    “They wanted to raise your rent $50/mo. I went to bat for you and got them down to $25,” I can say. The tenants and I are just folks navigating the ‘w-2 world’ together with jobs to do. We can relate that way. I’ve even received tips and folks seem to feel bad for me when I roll up in my beater to fix things. I get invited to tenant weddings and parties. Kids show me their new teeth coming in.
    I don’t lie or mislead, but I treat it as the business it is and it has worked beautifully. When asked if I own the building (which is rare), I chuckle and point to my car or my clothes. “Are you serious? Yeah right!”

    Not a single tenant in 13 years with 3 dozen doors has ever made rent out to me personally. Helps with acct, too. Would be interested in hearing from folks that have been doing it a while with tenants that pay rent to them personally. How does that even work? My guess is they are more inclined to be among the grumpy advisers 🙂 Cheers!

    • Dawn Anastasi

      I personally tell people I’m the owner, but all rents and expenses get run through my LLC. I’m not ashamed or embarrassed to be the owner. But this is one of the “great debates” on Bigger Pockets, whether or not to tell tenants you’re the owner. Some people do, some people don’t. There’s no one way to do it.

  2. Curt Smith

    Thanks Liz and Steve. I agree with Steve’s comments. As a self manager of 32 SFRs all more than an hour away scattered in the North half of GA I’ll add a few of my wisdoms.

    The most important decisions happen before you buy.

    – buy in the path of jobs. Be conscious and dig into local jobs data on a micro scale. No renter can pay the rent if they only have access to marginal jobs. At its roots this is one issue making “rough” areas rough.

    – also buy in top school districts. Every top school has the cheap house pockets.

    If all of your rentals had access to good jobs and schools you’ll have a much better chance at few problems even self managing.

    Post buying:

    – fix nicely, even laminants and nicer plumbing and lighting fixtures. Then advertise as “the nicest home in your city”.

    – You need to figure out how to market to what I call the “aspirational renter” one who sees themselves getting a head. Position your rental as the vehicle to their getting ahead. Aspirational, move up renters with good jobs and goals for their kids getting ahead too pay their bills, fix things and don’t bother the landlord. It is possible to screen for aspirationality by asking key questions… A deceptively simple question is: do you have a bank account? whats your balance? And why do you want to live here in this home? …

    – I disagree with Steve and others re you being the face of the property manager or the owner. I have never felt the shoe fits telling renters I’m the PM. I typically rent our “homes” (not houses) during the rehab phase. I hire contractors but I’m usually dirty and dust in my hair so it’s either I’m just the contractor or the owner. Saying I’m the owner shoe fits better than being the PM.

    Renter prospects have universally said they loath PMs as to why they ask if I’m the owner. I dug into that issue and found that PMs and PM companies just are unresponsive, fix slow and then poorly and tenants are tired of that. I’ve found I can market against that by being “real” as they say being the owner. We also love dogs in all of our rentals. Another marketing advantage.

    Friday I came home from my “Dilbert’esq” day job on a positive note. I was feeling “I love my renters, my contractors and houses”. It was a genuine love fest and karma feeding with good energy. I’m absolutely certain my renters feel my concern and caring, so do my contractors and my houses (homes) reflect the positive energy too. At its roots of success in landlording is more than a business, its about people,,, including my wife and me. Best of luck to new and future landlords.

  3. Mark Graffagnino

    Great article. Add me in the camp of “I am the property manager” and not the owner. I have a part time assistant who acts as the resident manager and that has given my management company a much more professional presence with the tenants. I want them to think they are dealing with a company and not an individual mom-n-pop owner. We don’t get any sob stories or special requests.

    I can’t have any kind of personal relationship with my tenants. Once I cross that barrier I get soft don’t make wise decisions because of the relationship. I’m sure others can have that relationship and not let it negatively affect their business, but I can’t. That’s my personality and I’ve learned that the hard way.

  4. Mindy Jensen

    OMG! I cannot agree with #2 enough!

    I cringe when I see new landlords salivating at the idea of one year of rent up front from someone who has never seen the property before.

    I read with sadness the posts that start off, “I should have listened to the advice I got…”

    It breaks my heart to see the posts that say “I went with my gut instead of performing a background check.”

    Newbie landlords! If someone with 10,000+ posts on BiggerPockets is giving you advice that you don’t really like, L-I-S-T-E-N anyway. Wayne Brooks might not be telling you what you WANT to hear, but he’s telling you what you NEED to hear. Ditto Bill Gulley, Russell Brazil, Joel Owens, etc.

    There is no shortage of experienced landlords here on BiggerPockets. They aren’t giving you bad advice so that you leave the game thus reducing competition. They genuinely want to help you. Listen to them.

  5. Peter Tang

    As a brand new, never-did-it-before, landlord (as of 5/31/16), I’m reading and learning all I can on BP. I may have already made some mistakes on the valuation side but, live and learn…the SFR is cash flowing and I decided it would be a good way for me to learn to self manage. Thanks for your post…I’m all eyes.

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