First Rental Property

Hi Folks,

Hope all is well on your end.

At times, real estate investing can be a lot of fun and very fulfilling.  This is of course when things are going well.  On the flip side, real estate investing can be very worrisome.  During these tough tiimes, you wonder to yourself, if it makes any sense to contine investing.

There is one important lesson that I have learned over the years as s real estate investor.  This lesson is to ‘treat your tenants with respect’.

For some of us, being respectful to others comes easy.  Whereas for others, it is a bit of a challenge.

I will give you a quick breakdown of some of the things you need to do in order to show your tenants respect.

1) Speak to them politely

Don’t be aggressive with your tone.  If you do, they will be aggressive right back to you.  If you speak to them in a good manner, chances are  that they will return the favour to you.

2) Respond to them promptly

If your tenant contacts you, return their call, text or email quickly.  It is your job to ensure that everything in their home (your rental property) is in good order.  If your tenant is contacting you and it is not in regards to paying rent, there is a high probability that it will be in regards to a maintenance issue in the property.  Respond to them quickly.

These are 2 simple things that you can do in order to show your tenant respect.

If you treat your tenants with respect, you will have fewer problems as a landlord.

Best Regards,

Neil Uttamsingh.

Hi Everyone,

Hope you are all doing well.

Today I am going to tell you what I think about real estate clubs. I am going to tell you whether I like them, or whether I think that they are a waste of time.

My feelings on real estate clubs are mixed, and I will tell you why.

Lots of aspiring real estate investors looking to buy their first rental property are faced with the same decision.  This decision is whether or not they should join a real estate club.

Real estate clubs can be both good and bad.

Here is one of the reasons that I think real estate clubs can be ‘bad’…

• 1) Real Estate Clubs try to sell you something

Most if not all real estate clubs will try to sell you something.  The sale is usually a product, service or membership.

Memberships

Most large real estate clubs will charge membership fees.  Many of the smaller less establish real estate clubs will charge a very small fee.  In addition, lots of small real estate clubs will not charge a fee to their members.  In the case of ‘membership fees’, the clubs that charge these fees are obviously selling to you a membership and that is how they make money.

Products

Some of the larger real estate clubs and even the smaller real estate clubs will try to sell you a product.  The products for sale come in many different forms.  The product could be a book or even perhaps some DVDs on real estate and real estate investing.

Sometimes the products for sale are tickets to a more exclusive seminar being held by the real estate group itself.

This is a classic case of ‘up selling’!

Service

Real Estate clubs can also sell you services. Often these services are sold indirectly to you as the member.  Real estate clubs may co-operate with Realtors, Property Managers or Mortgage Brokers.  The Realtors, Property Managers and Mortgage Brokers all have services to sell to you as the consumer.

My Assessment of Real Estate Clubs: Are they worth joining?

One thing that all new real estate investors need to realize is that, real estate clubs sell stuff!  If real estate clubs pretend that they are not selling things to you, they are lying.

An Important Distinction to make…

Just because real estate clubs sell you things, this should not prevent you from joining these clubs.

Real estate clubs are a great place to learn about real estate investing because experienced investors and eager new investors attend these clubs.  As such, new or aspiring investors are exposed to many other people who have bought real estate as an investment or who have just purchased their first rental property.  Learning from people who have accomplished something that you yourself are trying to accomplish is the only way to go.  Far too often, aspiring real estate investors become discouraged after listening to the advice of non-real estate investors.  These non real estate investors can sometimes be close friends or family of the aspiring investor.  The aspiring investor my be told that buying a rental property is “too much work” or that “all tenants are terrible”.  This of course is not true.

Further, the Realtors, Property Managers and Mortgage Brokers that hang out at real estate clubs are generally very knowledgeable when it comes to investment real estate.  More often than not, these are professionals who are real estate investors as well.  As such, they are not only able to provide you with their specific services, but they can also provide you with first hand information on the do’s and don’ts of real estate investing.

In Summary

In regards to my previous comment above, I do not feel that real estate clubs are ‘bad’.  Rather, these clubs are sometimes perceived as being bad because of the fact that they ‘sell something’.

Just because real estate clubs sell something does not make them ‘bad’ at all.  On the contrary, real estate clubs (good real estate clubs) that sell products, memberships or services to their members are doing their members a favour.  They are doing their members a favour because they are educating their members with the products, memberships or services.

Every new real estate investor needs to learn how to become a successful real estate investor and landlord.  You can only learn this by speaking to and learning the best practices from already successful real estate investors.

So the next time you are on the fence about joining a real estate club.  Remember…

Just Do It!

Best Regards,

Neil Uttamsingh

Hi Everyone,

I hope that all is well on your end.

Today, I would like to talk about something that drives me ‘nuts’.

What drives me nuts is people who think they are skilled renovators, when in fact, they have no experience at all.

If you are a new real estate investor looking to purchase your first rental property, you will need to learn the basics about renovations.  That does not mean that you need to learn HOW to do renovations.  Rather, it means that you need to become educated on the topic and learn the basics when it comes to the cost of materials, the cost of labour, and the time required to complete renovations.

There are 3 major factors to consider when completing a renovation.

These factors are:

• 1) TIME
• 2) MONEY
• 3) SKILL

TIME

Sometimes people (unskilled renovators) wan to attempt renovations on their homes or rental properties because they have some time on their hands. Any renovation, whether big or small requires you to invest time.  The more time you have on your hands, the more time you can potentially devote to a renovation.

MONEY

People also attempt renovations on their own in order to save money.  This is not a bad idea.  However, if you do not have sufficient TIME on your hands in order to complete the renovation on your own, ‘Doing It Yourself’ will probably cost you more money as you will have to hire an experienced contractor to finish the job for you.

Doing renovations on your own for the first time are harder than you think.  This does not mean that you should not do it on your own, or never attempt doing renovations again.  You just need to be realistic with regards to how much TIME you actually have to devote to it.

If you don’t have enough TIME to devote to the renovation, then you must be prepared to hire a professional in order to get the work done.

SKILL

SKILL is probably the most important factor to consider.  Yet few people pay attention to this factor.  Before you start a renovation on a rental property, or any other property for that matter, you need to ask yourself, “Do I have the skill required to complete the renovation?”

Most people think that they possess the skill required, and as such begin the renovation themselves.

Very shortly thereafter, they find out that they have no idea what they are doing and that they do not have the skill set to complete the job.  Some people then decide to save TIME by throwing in the towel.  Their next step would then be to spend the necessary MONEY by paying a professional in order to do the work properly.

On the flip side, some people may chose to save MONEY by trying to complete the renovation themselves.  Depending on the complexity of the renovation this decision may end up costing the person a lot more MONEY in the long run.  After all, if the renovation is done very poorly and the poor work causes further damage to the house (think plumbing and electrical work) a professional will need to be called in, in order to repair the poorly completed work.

Renovations can be done, and done well, either by yourself or by a professional.  However, before you decide on any renovation project, you need to seriously look at:

How much MONEY you are willing to spend

How much TIME you have to complete the renovation

How much SKILL you have in doing work yourself.

Best Regards,

Neil Uttamsingh

ps: First Rental Property will be making a BIG announcement in September.  Stay tuned for details…

pps: here are some pictures from my recent renovation…

Hi Everyone,

I hope that you are all doing well.

The title of this article is not meant to be disrespectful towards tenants.

It is an important title and an important topic to speak on because so many landlords have absolutely no control over their tenants and over their rental properties.

If you are a new investor looking to purchase your first rental property.  You must understand one basic concept.

This concept is….

“Maintain control”

Far too often I speak to new real estate investors who are seeking advice from me, because they have let a situation with their tenant get out of control.  In 95% of these instances, the situation that they have let get out of control is the payment of rent.

In previous articles like, Tenant Not Paying Rent?, I have talked about the importance of submitting the necessary paperwork if your tenant decides to not pay rent on time.

Unfortunately many novice investors are not prepared to deal with the realities of owning real estate as an investment.  Being a landlord requires you to be proactive and to handle situations head on before they get out of control.

For example, a landlord has to train their tenants to pay rent on time.  This is simply done by notifying your tenants in writing in the event that they are late with their rent payment.

If a tenant has been late in paying rent multiple times during the tenancy, then you as the landlord must be submitting their ‘notice of non payment of rent’ as early as possible.  As early as possible means that if rent is due on the 1st of the month, if they have not paid by the 2nd, then the notice should go out on the 2nd.

The benefit of doing this is great.

First, it  conditions your tenants to realize that you are on the ball and that their rent must be paid on time.

Second, it allows you to start a potential eviction early on, as opposed to waiting weeks or months in order to begin the eviction.  In some cases, a tenant may no longer have any money to pay you.  If this is the case, it is better to have them move out through eviction early on, as opposed to having them live there for months while they are not paying rent.

It is important to train your tenants so that you are able to ‘maintain control’ as a landlord.

Don’t’ be afraid!  Real estate investing can be great.  All it requires is you to be proactive and follow a process.  If you do this, your chances of success will increase!

If you need help with purchasing your first rental property, REIN Live Events and REIN Home Study Courses can help you.  Check them out!

Best Regards,

Neil Uttamsingh.

Hi Everyone,

I hope that you are all doing well.  First off, I would like to say, thank you to all of you who have recently submitted guest blog requests over the past several weeks.  There have been so many requests recently that I have a back log of guest posts to publish.  I will be publishing these posts in the coming weeks.

Also, because there has been such a demand for guest bloggers, I will not be accepting any more requests until later on in the year. Thank you SO much for your interest!  Once I am ready to accept guest blogs again later in the year, I will make the announcement through a future blog post!

Now on to business….

Today’s date is August 4th 2012.

If you own a rental property, and if your rent was not paid on time, you need to take action if you have not done so already.  You need to  prepare the necessary paperwork required in order to notify your tenant of their ‘non payment of rent‘.

In Ontario, Canada where I am, the paper work that you prepare in the event of non payment of rent is called the N4.  I have no idea why the call it an N4 here.  It is such a weird name.  So weird, the form name was once mistaken for a type of gun!  🙂

You should know that novice real estate investors fall into the following trap…

Often times when the rent has not been paid by their tenant, they are given an explanation by their tenant as to why the rent was not paid on time.

In many cases, the novice real estate investor then delays in submitting the necessary paperwork notifying the Landlord and Tenant Governing body in their area of the non payment of rent.

This is a very common mistake that novice real estate investors make.

You must never delay in submitting this paperwork!

…But

There is always a BUT…

New real estate investors will make this mistake time and time again.  I see it all the time.

I do not blame the ‘newbies’ because I have also made this mistake myself.  I have delayed and delayed and delayed submitting paperwork because I was repeatedly told by a tenant that the rent is going to be paid.

Well, my real estate investing friends, I want you to know that you cannot delay in submitting this paperwork.  If you do, the process will eat you alive.  In many jurisdictions, legislation is in favour of the tenant.  As such, as a landlord, if you delay in submitting paperwork, you are doing a disservice to yourself.

No matter what, if a tenant is late in paying their rent, you have to file the initial paper work notifying the tenant of their ‘non payment of rent’

Don’t FREAK out!

New real estate investors always freak out when a tenant does not pay rent.  They also freak out about the paperwork and about WHEN they are supposed to submit the paper work.

When is the right time to submit the paperwork?

Not knowing the answer to this questions literally kills a lot of novice investors.  They have no idea when they are actually supposed to submit their paper work to their tenant and to the governing body.

The RIGHT answer!

The right answer is that you should submit your paper work notifying the tenant and the governing body of the non payment of rent as soon as you are allowed.  That means, that you always submit the paperwork on….

The 2nd of the Month

What Most people do…

What most people do, and when I say ‘people’, I am referring to experienced real estate investors.  What they do in reality is NOT submit their paperwork on the 2nd of the month.  This is a generalization as I am sure that some actually submit their paperwork on the 2nd.  However, most people don’t submit on the 2nd.

Why don’t people submit on the 2nd

People don’t submit on the 2nd of the month for a number of reasons.

-some people are lazy

-some people don’t know the rules surrounding how to deal with non payment of rent

-some people like to give their tenants some extra time to pay the rent

Which day do you become a real estate wimp?

You become a real estate wimp if you do not submit your paperwork by the 5th of the month.  This is already too late, however, in my books, it is the absolute LAST day to submit the paper work to your tenant.  There is absolutely NO reason why you should be delaying any further past the 5th of the month.  If you do, you are asking for trouble.  If you tenant has decided not to pay you rent again, or is unable to pay you rent, you need to begin the eviction process.  Waiting, staling, hoping is going to do you no good.  You have to take action and submit your paperwork on this day, or BEFORE!

How do I know this?

Believe it or not, but I once waited over 4 months before submitting paperwork to notify the tenant and the governing body of their non payment of rent.  This was a huge error of judgement on my end.  A huge error of judgement that almost cost me a little over $5000 in unpaid rent.  Fortunately, I was able to recover the rent at a later date.  However, I came VERY close to losing out on $5000 in rent just because I was not following the process.  I almost lost $5000 in rent because I was a real estate investing wimp!

What I learned

I learned to never again be a real estate investing wimp.  I learned that NO MATTER WHAT, if rent is not paid on the 1st of the month, the ‘notice of non payment’ must go out by the very latest by the 5th of the month.  (The 5th of the month is my personal preference, currently.)

Bottom Line

You got into this business or are looking to get into the businsss of real estate investing because you are not a WIMP!  You are willing to take risks that other people are not willing to take.  Real Estate investing in full of risks and rewards.  You must learn very early on to manage the risk that you are exposed to.  The only way to manage the risk of a tenant not paying, or not paying on time, is to file the necessary paperwork with your governing body as soon as the rent is not paid.

Don’t be a wimp.  If you are a wimp, you may very well lose lots of money in  rent and be wiped out of this businesses due to your inaction.

Best Regards,

Neil Uttamsingh

ps: All real estate investors need support, whether you are new or experienced.  To learn step by step guidelines on how to deal with non paying tenants, read my post on how the Real Estate Investment Network can help you!