First Rental Property

Hi Friend,

I hope you are doing well.

If you are looking to purchase your first rental property, you may have a question or two about rent collection.

If you do, that is normal.

A lot of new real estate investors have questions regarding this topic.

I often get asked by new landlords how they should be collecting their rent from their tenants.

There of course is a variety of ways in which you can do this.

In this blog post, I am going to outline for you a number of these methods as well as some of the potential pros and cons of collecting rent in these various manners.

Here are the methods in which you can use to collect rent from your tenant.

1) Post Dated Cheques

When your tenant first moves into your rental property, you can ask them at the beginning of their lease term to provide you with a series of post dated cheques.  Many landlords do this, because this is a method that works.

This mode of rent collection is both easy for the landlord and easy for the tenant.

It is easy for the landlord because, they do not have to make monthly trips to the rental property to pick up the rent.

It is easy for the tenant because they do not have to arrange their schedule and make time to meet their landlord each month.

There is also a big downside with collecting rent in this manner.

Since the landlord is not travelling to and meeting with the tenant each month to pick up rent, there is reduced opportunity to meet the tenant face to face and build a strong relationship.

2) E-mail Money Transfer / Bank Transfer

In this day and age, technology is awesome!  There are new options available to us in the world of banking than ever before. An example  of this is the email money transfer.    Tenants can now transfer to their landlords their monthly rent in the form of an email money transfer.  This is an efficient way to collect rent and it saves time for both the landlord and tenant.  Scheduling a time to meet to pick up rent in person can sometimes be challenging.  This mode of rent collection solves that problem.

3) Pick Up Rent In Person – Cash or Cheque

Although not practical in every case, this is my favourite mode rent collection.  This is my favourite mode of rent collection because it allows you as the landlord to build a strong relationship with your tenant on an ongoing basis.

Not only does it allow you to build an ongoing, strong relationship with your tenant, this strategy allows you to check on the property on a monthly basis.  If you have great tenants, you get to see each and every month how well they are taking care of the property.  On the flip side, if you have tenants that you are not too sure about, this method allows you to carefully observe the condition of the property.

So there you have it.  These are three modes of rent collection.  There are other ways in which you can collect rent, however, as a new real estate investor, you should focus your efforts on one of these 3 methods.

Happy Investing!

Neil Uttamsingh

ps: If you are looking to buy your first rental property, sign up for the First Rental Property Newsletter.  You can do this by providing your name and email address at the top right hand corner of the blog.  If you do, in the Newsletter you will receive tips and tricks from experienced real estate investors on how to buy your first rental property.

pps: I am a Licensed Realtor in Ontario and I help people like you buy their first rental property everyday! I personally own Hamilton real estate, Oakville real estate and Toronto real estate.   If you need help purchasing your first rental property or your next rental property, write to me at NEIL@FIRSTRENTALPROPERTY.COM. I will help you negotiate the best price, terms and conditions on your rental property. Buying in the US? No problem!  I will refer you to one of my trusted partners.  Happy Investing!  🙂

Hi Friend,

I hope you are doing well.

In today’s blog post, I am going to share with you the most important secret that all new real estate investors NEED to know.

However, before I reveal this BIG secret, Let’s take a step back and go over a few items first….

ITEM NUMBER ONE

If you are just starting out as a real estate investor, I would like you to know that investing in real estate is NOT EASY.  

Many people talk about it, but very few people ever end up taking action and buying a rental property.

Over the years, I have coached and guided many people as they purchased their first rental property.

You may be surprised to know that probably 1 person in 100, ever end up buying a rental property.

Of those people who end up buying a rental property, many are under prepared or not prepared at all.

When the going gets tough, they end up selling their rental property.

They may encounter difficulty with their tenants or they may be faced with repairs and maintenance to the property that they haven’t planned for.

The conflict with their tenants may be unsettling and the best way they know how to deal with it is by selling the property.

The repairs required on the property, may cost them more than they have available.  As such, they might be forced to pay for the repairs and maintenance to the property by using leveraged funds.

Using these leveraged funds to repair the property makes them nervous. They become so anxious that they end up selling the property as a result.

So as you can see, purchasing, owning and effectively managing rental property is not easy.

However, it is not that hard either.

It is not that hard if you:

Never sell you property!

This indeed is the number one secret that you need to know.

If you never sell your property, you win as a real estate investor.

From the time in which you purchase your rental property, there is a good chance that you may face  conflict with a tenant or have to perform unplanned repairs and maintenance on your property.

That is a given if you are a real estate investor.  These things are going to happen.  There is no avoiding them.

The reality is that many people will sell their rental property when things become difficult.

They key thing for you to remember is to never sell your property.

That is the number one secret to buying rental property…

Never forget that…

Happy Investing!

Neil Uttamsingh

ps: If you are interested in buying your first rental property, sign up for the First Rental Property Newsletter by entering your name and email address in the top right hand corner of the blog.  If you do, you will receive tips and tricks from experienced real estate investors on how to buy your first rental property!

pps: I am a Licensed Realtor in Ontario and I help people like you buy their first rental property everyday! If you need help purchasing your first rental property or your next rental property, write to me at NEIL@FIRSTRENTALPROPERTY.COM. I will help you negotiate the best price, terms and conditions on your rental property. Buying in the US? No problem!  I will refer you to one of my trusted partners.  Happy Investing!  🙂

Hi Friend,

I hope you are doing well.

If you are looking to buy your first rental property, you need to understand very quickly the importance of finding great tenants.

By far, your tenant is your greatest asset, and not necessarily the rental property itself.

Having respectful tenants that pay you rent every month will make your life as a real estate investor much easier.

Not all landlords are good at attracting quality tenants.

That is because, not all landlords are good!  🙂

There are a lot of horrible, confrontational landlords out there.

Being confrontational with your tenant, in a destructive way is one of the worst things that you could do as a real estate investor.

Starting conflict with your tenants when problems arise is not a good strategy, because this will never benefit you.

As the saying goes, “You attract more bees with honey”.  Try it!

Let’s now address the question you are asking yourself:

How do you find quality tenants that pay rent every month?

Well my friend, there are quite a few strategies to achieve this.

However, the one strategy that I would like to share with you is:

Obtaining referrals from existing tenants

This is a strategy that very few landlords every try, but it is a strategy that works great.

Your existing tenants are a great source to tap into in order to obtain referrals for other great tenants.

This is also a great method in reducing the length of vacancy you may have with a given rental property.

For example, let’s assume that you have 2 rental properties.  You have great tenants in both of the properties, and one of the sets of tenants have decided to move.  You are now in need of new tenants.

The first step that you should take is simply asking both your sets of tenants if they know of anyone who is looking to rent.

In the majority of cases, your tenants would be thrilled to refer you someone they know who may be looking to rent.

In addition, if you have treated your tenants with respect and been kind to them over the course of the tenancy, they will serve as an advocate for you in helping you find another quality tenants.

There you have it!

The best way to find quality tenants that pay you rent on time is by asking your existing tenants for referrals!

Happy Investing!

Neil Uttamsingh

ps: If you are looking to buy your first rental property, please sign up for the First Rental Property Newsletter, by entering your name and email address in the top right hand corner of this blog.  By doing this, you will receive tips and tricks from experienced real estate investors on how to buy your first rental property.

pps: I am a Licensed Realtor in Ontario and I help people like you buy their first rental property everyday! If you need help purchasing your first rental property or your next rental property, write to me at NEIL@FIRSTRENTALPROPERTY.COM. I will help you negotiate the best price, terms and conditions on your rental property. Buying in the US? No problem!  I will refer you to one of my trusted partners.  Happy Investing!  🙂

Hi Friend,

I hope you are doing well.  If you are a regular reader to the blog First Rental Property, you will be well versed on the methods people use to find a rental property.

If you are a new reader and you are in search of buying your first rental property, today is your lucky day.

Whether you are a new or returning reader, in this blog post I am going to identify one major that people are  using to find their first rental property.

Here is the method:

1) They use An Investment Savvy Realtor

If you have done any reading at all on how to buy rental property, you will know that you must find and use a Realtor who is well versed with investment knowledge.  It always serves as a good reminder to always seek out the services of a Realtor with investment knowledge and experience as a real estate investor.  The reason you do this is because at the beginning of your real estate investing career, there are going to be many things that you do not know. A good Investment Savvy Realtor will be able to fill in these gaps of knowledge for you, and provide you with guidance based on their first hand experience.

Here is an example of how an investment savvy realtor can help you:

Many new aspiring real estate investors believe that when buying a rental property, it is wise to buy a property in which there are currently tenants residing in the property.  They feel that if there are already tenants in place, there will be no risk of vacancy during the initial first few months of ownership of the rental property.

Some might believe that this is a wise choice.  However, there can be major problems with this type of approach.

A Realtor who has experiencing owning and managing rental properties of her own, can provide the new real estate investor with guidance in this matter.

The guidance in this situation from the Realtor could be as follows:

Realtor:

“It might be a great idea to inherit these existing tenants when you purchase this rental property.  This might be a great idea because it will save you from having a few months of potential vacancy when you are in search of new tenants to reside in your rental property.  However, there is a downside to inheriting tenants when you buy a rental property.  If you are going to inherit these tenants, I recommend arranging a time to meet with the tenants at the house in order to introduce yourself.  Let them know that you are considering purchasing the house and that you are interested in potentially keeping them on as tenants.”

“Ask them about the current landlord and if they are currently having any problems with him or her.  Listen to them talk, and let them give you all the details.  When you are speaking with them, and if they are having problems with the existing landlord, this will be one of the first things that they bring up (indirectly). “

“If they are having problems with the landlord, this is not necessarily a bad thing.  The current landlord may be a poor communicator and overall a bad landlord.  The bulk of the problems could be a result of the landlord and not the tenant.  Hear them out and listen to everything they have to say. “

“After meeting with them and speaking with them in detail, you will have a very clear idea in your mind as to whether or not you would like them as your own tenants.  By meeting with prospective tenants face to face, you learn a lot about them, and it allows you an opportunity to see if you would like a long term business relationship with them. 

So there you have it.  Leverage the knowledge and experience of Investment Savvy Realtors when you are trying to find a rental property for yourself.  Investment Savvy Realtors with experience as investors know all about what it is to be a landlord.  They will be able to provide you with valuable insights that you will not be able to get anywhere else!

Happy Investing!

Neil Uttamsingh

ps: If you are looking to buy your First Rental Property, sign up for the First Rental Property Newsletter.  If you do, you will be able to read about tips and tricks from experience real estate investors, that will aid you in purchasing your first rental property.

pps: I am a Licensed Realtor in Ontario and I help people like you buy their first rental property everyday! If you need help purchasing your first rental property or your next rental property, write to me at NEIL@FIRSTRENTALPROPERTY.COM. I will help you negotiate the best price, terms and conditions on your rental property. Buying in the US? No problem!  I will refer you to one of my trusted partners.  Happy Investing!  🙂

Hi Friend,

I hope you are doing well.

I have been helping people buy their first rental property for many years now.

During these years I must say, I have seen it all.

I have witnessed people buy multiple properties at once, become extremely successful at investing in real estate and never look back.

On the flip side, I have seen people take the plunge into investing in real estate, become overwhelmed, lose money, and quit by selling their rental property shortly after they purchase it.

By a simple conversation with a prospective real estate investor, I can usually tell if that individual is going to be successful or not at owning and managing a rental property.

I have noticed one trend over the years that usually determines whether or not someone is going to succeed or fail as a real estate investor.

The trend is…

How Long The Person Owns The Rental Property

Simply put, when someone buys a rental property and sells it after around the one year mark, this person is going to fail as a real estate investor.  These individuals may end up buying properties again some years down the road.  Even if they purchase more properties years after, this trend still holds true.  They will more than likely sell off their rental property again shortly after purchasing it.

The reasons as to why someone would sell their rental property around one year after purchasing it could be many.

The most common reason is that people find the management of tenants the most difficult part.  In turn, they end up selling the property at the height of their frustration.

On occasion I will meet former real estate investors who have owned properties in the past.  They may be in the market to buy rental properties once again.  The moment I find out that they owned their former property or properties for about one year, I know that they will end up failing again if they purchase more properties. This is what the trends have shown me time and time again.

Another important threshold is the…

5 Year Mark

I have witnessed real estate investors own and manage rental properties for a 5 year time frame and then sell their property or properties after the 5 years elapse.

The reason why some investors do this is because their mortgage term expires after 5 years.  Instead of renewing their mortgage or obtaining a new one, they decide against doing both and end up selling their rental property.

For these types of investors, the decision to sell the property does not happen all of a sudden.  I have noticed that these investors are either not pleased with their investment or not pleased with their tenants for a period of time.

The expiration of the mortgage term gives them a great opportunity to throw in the towel and sell off their ‘troublesome’ property.

So there you have it.

This post is short and to the point. However, it gives you valuable advice on how to avoid failure as a real estate investor.

Don’t sell your property.  That is the bottom line.  Despite what other people may tell you, don’t do it.

No matter how challenging the management of tenants become, don’t sell your rental property.

If you sell your property, you fail.

The objective of owning real estate is to generate cash flow and generate wealth.

Cash flow and wealth generation are not created by giving up.

Happy Investing!

Neil Uttamsingh

ps: Learn tips and tricks from experienced real estate investors on how to buy your first rental property by signing up for the First Rental Property Newsletter.  All you need to do is enter your name and email address in the top right hand corner of the blog!

pps: I am a Licensed Realtor in Ontario and I help people like you buy their first rental property everyday! If you need help purchasing your first rental property or your next rental property, write to me at NEIL@FIRSTRENTALPROPERTY.COM. I will help you negotiate the best price, terms and conditions on your rental property. Buying in the US? No problem!  I will refer you to one of my trusted partners.  Happy Investing!  🙂

Hello Friend,

I hope you are doing well.

Today I have a special treat for you.

I am going to share with you 5 Helpful Resources.

These resources are going to be extremely helpful to you if you are interested in purchasing your first rental property.

Here they are:

1)  GetSmarterAboutMoney.ca

In an article titled,  “Investing In A Rental Property: The pros and cons”, the author highlights 3 key disadvantages about buying a rental property. Believe it or not, there are indeed disadvantages to buying a rental property.  To learn about them more, click here:

Investing In A Rental Property: The Pros and Cons

2)  Rent Smart Blog By Margot Bai

In this blog, Margot writes about ‘being your own property manager’.  I am a big fan of her comment.  She also says in her article, “Once you have a paid off-property providing a steady income stream, your best play is to simply hold on to the property as long as you are able to take care of the home and your tenants.”  She has some very wise words in this short article. To read the entire article, click here:

Be Your Own Property Manager!

3) MoneyCrashers Blog

In an article titled, “8 Issues With Buying Rental Property and Becoming a Landlord”, Angela talks about ‘surviving evictions’.  I could tell by reading the article that she has been through the eviction process before.  Keep in mind that the eviction process will vary depending upon where you live (Country, State, Province, Territory, etc).  To read about a general overview of eviction process, in addition to a few other issues with buying rental property, click here:

8 Issues With Buying Rental Property and Becoming a Landlord

4) The Mortgage Navigator

In an article titled, “How to Buy a Rental Property”, Charlotte writes about some of the lending requirements that you need to abide by.  The lending requirements talked about are Canadian guidelines, however, there are general commonalities with the lending requirements whether you live in The United States, Canada, United Kingdom, or any other country.  Charlotte also makes a distinction with the lending guidelines for salaried individuals versus self employed individuals.  To read the article, click here:

How To Buy A Rental Property

5) Million Dollar Journey

There is some really good advice in the article that FrugalTrader wrote, titled, “Criteria For Purchasing Rental Property”.  The first point that he states is, “The property must be cash flow positive.”  This is good advice.  He goes on to explain why the property should be cash flow positive and how to calculate the cash flow on a property.  To read the entire article, click here:

Criteria For Purchasing Rental Property

So there you have it!  5 helpful resources for new real estate investors.  Make sure you read all 5 of these articles as they all contain very helpful advice if you are trying to buy your first rental property.

Happy Investing!

Neil Uttamsingh

ps: Subscribe now to the First Rental Property newsletter by entering your email address and name into the top right hand corner of the blog.  Once you do this, you will start to receive tips and tricks from experienced real estate investors on how to buy your first rental property.  The best part is that all this information is for, you guessed it….. FREE !!!  Subscribe now.

Hi Friend,

I hope you are doing well.

Yesterday I received an email from a blog reader.

In the email, the reader provided some feedback as to why they had unsubscribed from  the First Rental Property blog.

With a blog readership in the thousands, I get messages from people all the time that have chosen to unsubscribe.  This is just the nature of having a blog with a large readership.

Some of the common reasons that I get from people who have chosen to unsubscribe are listed below:

• I am no longer interested (in general)
• I am no longer interested in buying a rental property
• I am getting too many emails
• No reason stated

These are the standard reasons as to whey people unsubscribe and I hear them all the time.

However, the most recent explanation that a reader gave me, struck a cord with me.

The reason they had stated, as to why they unsubscribed from First Rental Property was because:

• They wanted more VALUABLE information

Hi Friend,

I hope you are doing well.

If you are new to real estate investing, chances are you do not know how to calculate ROI (Return on Investment).

For many new investors, the topic of ROI is a confusing one and many people do not understand it.

If you are serious about buying your first rental property, and you think that you are going to purchase multiple rental properties, at some point, you need to understand ROI and become comfortable with calculating it.

So what are the reasons you need to know how to calculate ROI?

Reason #1 – Is the investment good or bad?

One of the major reasons you need to know how to calculate ROI is to know weather an investment is good or bad.  If you do not know how to calculate ROI, you will not be able to differentiate when you see a good investment, or when you see a sub par investment.

Reason #2 – Protect Yourself

Another major reason as to why you need to know how to calculate ROI is so that you can protect yourself.  You can protect yourself in that, if an investment is presented to you, and the ROI is stated, you will be able to double check the numbers and determine if the ROI is in fact the same as what is being presented.

At the end of the day, ROI is not hard to calculate.  It is comprised of 3 components.

Component #1 – The money you are investing.

When calculating ROI, you need to first take a look at the money you are investing.

If we are look at an example, let’s say that you are investing $100,000.

Now that you know how much money you are investing, you now need to look at component number 2.

Component #2 – How much money you are making.

With real estate investing, the money you make can come in different forms. It can come in the form of cash flow, mortgage paydown or appreciation.  In this example we are going to keep things simple.

Let’s say that they money that you made on your $100,000 investment was $14,000.

Now that you know how much money you invested, and how much money you made you need to look at component number 3.

Component # 3 – Time Period

When calculating ROI, you always want to take a look at the time frame.

For example, using the numbers above, let’s say that they money you made ($14,000) on your initial investment of ($100,000) was done in one year.

Therefore, when you are calculating your ROI, it would look like this…

$14,000 (money you made) / $100,000 (initial investment) = 14% in year one

As you can see from above, if you invested $100,000 into rental property and made $14,000 (with cash flow, mortgage paydown and/or appreciation) in the first year, your ROI when calculated would be 14%.

This is a simple explanation of how to calculate ROI.  Simple is good because most novice real estate investors do not know how to calculate ROI.  You need to have a basic understanding of it, and the explanation above gives you just that!

So what do you think?  Is calculating ROI is harder or easier than you thought?  Leave your comments below.

Happy Investing!

Regards,

Neil Uttamsingh

ps: If you are serious about buying your first rental property, sign up for the First Rental Property Newsletter.  All you need to do is fill out the form located at the top right hand corner of the blog.  When you do this, you will start to receive tips and tricks from experienced real estate investors on how to buy your first rental property!

Hi Friend,

There was a time, early in my real estate investing career in which I thought that commercial real estate was a better investment than residential real estate.  I was young and naïve at the time and have come to realize that residential real estate is the far superior investment.  Residential real estate is better because:

The possibility of owning a rental property it is not out of the reach of the average income earner.  

All things being equal, you do not have to be making a 6 figure income if you want to acquire a rental property in the residential world.   If you are an average income earner, with the help of a quality investment focused mortgage broker, you can purchase a rental property with relative ease.  Once you purchase this rental property, you can rent it out and have your tenant pay down your mortgage over the next 25 to 35 years, depending upon the length of the amortization of your mortgage.  What this means to the average person is that once you have reached the age of retirement, you will have an asset that is free and clear of a mortgage.  This strategy of investing in residential real estate  is realistic and it is attainable.  If you decide to purchase multiple rental properties, it is the best way to amass over a million dollars in equity over the course of your lifetime. 

What do you think about this blog post?  Do you agree that residential real estate is a better investment, or do you prefer commercial real estate? Leave your comments below.

Happy Investing!

-Neil Uttamsingh

ps: If you are serious about buying your first rental property, sign up for the First Rental Property Newsletter.  In the Newsletter you will get to read tips and tricks from experienced real estate investors on how to buy your first rental property!  You can sign up for the Newsletter in the top right hand corner of the blog.  Oh, and by the way…. it is free of charge!  Sign up today!  🙂

Hi Friend,

I hope you are doing well.

If you are a person who is looking to buy your first rental property, the topic of this blog post will be of great interest to you.

Currently I have 5 mortgages.  This is because I own 5 properties.  When I first started investing in real estate, I had no idea how to obtain more than one mortgage.  This was back in the year 2005.  Since then I have gone on to purchase Oakville real estate, Hamilton real estate and Toronto real estate.

It amazes me how few people know that they are able to obtain more than one mortgage.  The bulk of society (who have mortgages) are conditioned to believe that they are only able to have one mortgage at a given time.

If you are a new real estate investor, you need to know that:

You can have more than one mortgage.

Having more than one mortgage is essential if an individual is looking to build a real estate portfolio.

Dealing With Non-Believers

Whenever there is a minority of people doing something different than the majority of people, the minority is often critisized.  Staying with this theme, I often witness single mortgage holders being criticized by multiple mortgage holders.

Non believers make the assumption that:

“You cannot have more than one mortgage.”

Who Are The Non Believers?

Non believers are people that tell you that you CANNOT have more than one mortgage.

There are always people giving advice and false information to new real estate investors.  As a new investor, you have to very careful who you listen to and who you take advice from.  I have said over and over, that you should only take advice from someone who has accomplished something that you are trying to achieve yourself.

How Does a Real Estate Investor Obtain More Than One Mortgage?

In order to obtain more than one mortgage, you have to speak to a Mortgage Broker or Mortgage Specialist who has experience in getting multiple mortgages approved.  Some real estate investors are told that Mortgage Brokers are the only ones who are able to grant more than one mortgage to a real estate investor.  This is not always the case.  In many situations, major financial institutions are able to grant an individual borrower more than one mortgage.

In Summary

In summary, it is absolutely possible for someone to have two mortgages at the same time.  If you are new to real estate investing and want to purchase a rental property, you can feel reassured knowing that you can obtain two mortgages through the help and guidance of either a mortgage broker or a bank.

Happy Investing!

Best Regards,

Neil

ps: If you are serious about buying your first rental property, take a quick second and sign up for The First Rental Property Newsletter.  You can sign up in the top right hand corner of the blog.  When you sign up, you will get tips and tricks from experienced real estate investors on how to buy your first rental property, delivered straight to your Inbox, free of charge!