First Rental Property

Hi There,

If you are new to real estate investing, one question that you will face is:

Do you manage your rental property yourself or do you hire a property manager.

Valid arguments can be made for both sides.

However, you should know that most real estate investors, are not very good landlords.  As such, if you are not good at being a landlord, you need to get the help of a professional property manager.

Here are 4 Reasons Why You Need A Property Manager.

1) Your Tenant Is Behind In Rent

If your tenant does not pay you on time once, there is a high probability that they will repeat this behaviour again and again.  If they are repeatedly not paying you on time, you are not doing your job effectively as a landlord, bottom line.  As a landlord, you must collect your rent on time.  If you are having trouble with this you need to hire a property manager who will step in and ensure that your tenant pays you on time.  Timely rent collection is an essential skill that you require.

2)  You Have Not Raised The Rent

Many landlords once they have a tenant move in, never raise their monthly rent.  Depending upon where you reside, in most places you can raise the monthly rent  on a periodic basis (often annually).  If you have tenants that have lived at your rental property for several years, and who have not had their rental amount raised, that is not good for business.

As a real estate investor, you are a business operator.  In business, your objective should always be to maximize revenue.  What better way can you maximize your revenue than by increasing your rent?  Increase your rents…bottom line.

If you are afraid to raise your tenant’s monthly rent, step out of the way and let a professional property manager take over as the landlord.  They will be able to give your tenant the proper notice and have them pay the increased amount in rent, guaranteed.

3) You Don’t Like Confrontation

If you are not good at dealing with conflict, you will struggle as a landlord.  Whenever a problem arises with your tenant, you will have to be communicating directly with them.  It may be a problem that is not your fault, however, you have to come up with the solution to it…that is the job of the landlord…

For example, your tenant may call you frustrated and let you know that their washing machine has not been working for 2 weeks.  Further, the washing machine has broken down with a full load of clothes in the wash and that the machine has water in it and is not draining.  Further, they might also tell you that they need the washing machine fixed today, because they are all out of clean clothes and they need to have access to the washing machine to wash all of the clothes for their new born baby.

This is a situation that you have to deal with immediately.  The longer you leave this situation unresolved, the further frustrated your tenant might become.  If you don’t like dealing with frustrating circumstances like this one, you need to have a property manager step in and handle situations like this.  They will be able to communicate with the tenant directly and co-ordinate any maintenance people that may be required to come and fix the washing machine in a timely manner.

4)  You Are Not Good At Keeping Records

Keeping records is actually a very important skill to have as a landlord.  Depending upon how many rental properties you end up buying and depending upon how involved you are with your tenants, you will likely have to keep very detailed records.

Detailed records are required when a tenant has not paid rent.  The tenant is now behind with the rent payment.  A few days from now, they may make a partial payment of rent.  A week later, they may make another partial payment of rent.  Simultaneously, you will have to file the paperwork with your local governing body that deals with Landlord and Tenant Issues.

There is a lot to keep track of when things go wrong with your tenant.  As the landlord, the onus is on you to keep flawless records.  If you are not good at doing this, give up the job as manager of your rental property to a professional property manager.

These are just 4 reasons why someone would need a property manager.  There are many other reasons why you should hire a property manager.  We will leave that discussion for another day!

Happy Investing!

Neil

ps: If you are new to real estate investing and are looking to buy your first rental property, you might also be in search of the money to do this.  Finding money to buy a rental property can sometimes be hard.

The quickest way to find some money so that you can purchase a rental property might be through finding a joint venture partner.

Presenting to a Joint Venture partner is a challenge to a lot of investors.  But when you discover there are only 3 powerful ingredients that influence people to say “YES” to your deals, it’s not so hard anymore.

My friend and fellow real estate investor, Joey Ragona just released a video on this, and it’s awesome: https://rl163.isrefer.com/go/JVPF-intro-direct/SBA45/email

He really simplifies and breaks it down, and explains why MOST investors are wasting their time chasing people who will NEVER give them money. You’ll learn:

•  Why people say “NO” to your deals
• The 3 HUGE mistakes investors make when they’re looking for JVs
• Joey’s 3-Step Presentation Formula ingredients
• How the 1-Page JV Presentation filters out people who will waste your time

Joey shows you in this video, so check it out before he pulls it down.https://rl163.isrefer.com/go/JVPF-intro-direct/SBA45/email

Enjoy the video.  And take some notes. Don’t worry, there’s no opt-in required.

A few days ago, I was approached by someone who was looking to raise joint venture money. I know this person through one of my real estate networking groups. He was looking at putting together a group of investors, raise a significant amount of capital, and buy into a large real estate deal.

The guy definitely had ambition and a vision. However, there was another thing that he had, and it was not a good thing. He also had what I like to call, ‘the creep factor’.

When he was pitching the deal, he came off as very creepy. As a result, I put my guard up, and mentally blocked out everything that he was saying.

There are a handful of reasons that I found this guy to be creepy. Unfortunately, I have come across quite a number of people that have this creep factor. The creep factor often displays itself when people are trying to pitch joint venture partnerships to potential money partners.

Here are some key things that you should AVOID when pitching to a potential money partner.

1) Don’t be insincere. Be honest, and tell the truth.

Generally speaking, people are not dumb. People know when they are being lied to. As a result, when you are speaking to a potential joint venture partner about a prospective deal, be straight up, tell the truth about your analysis of the project, and don’t lie. If you do lie, most people will notice this right away, and this will ruin your credibility.

No one trusts a liar.

2) Don’t be mysterious

Some people think that it is a good strategy to be somewhat mysterious about a potenail real estate deal. For instance they might tell a potential partner, “I have something that I want to talk to you about. You can make a lot of money, but I can’t tell you what’s it about. Trust me, it is a good investment, and you should invest with me.”

There is nothing more sketchy than the statement made above. If you seem like a sketchy character, people will not want to invest with you and they will not trust you. Again, be straight up with people and get right to the point. You can tell them,

“I am a professional real estate investor. I purchase positive cash flow properties with joint venture partners in (Insert you City here). We hold the properties for X years and then we sell them. The joint venture partner provides all of the funds required to purchase the property, and I do all of the work with the property. I search for properties that meet our investing criteria. When we find the property, I am involved with the negotiation of the purchase. Once purchased, I spearhead any repairs and maintenance that needs to be completed. I search for and place tenants into the property. I also manage the ongoing relationship with the tenants. When we are ready to sell the property, I take care of this as well. At the end of the holding period, the money partner first gets back all of their initial investment. We then split the profits 50/50. Also, throughout the time that we own the property, we also split the monthly cash flow 50/50.

This explanation above is straight to the point and it tells your potential money partner, what you are all about. This description is not confusing nor does is create a sense of mystery.  If you are more straight up with people, and you tell them the truth, you will not creep them out.

My fellow REIN member, Chris Davies is very knowledgeable regarding joint ventures.  I really liked this article that he wrote.  Check it out!

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