There’s different types of real estate investors: Landlords, Flippers and those who buy and hold. But who do you want to be? We will only discuss Landlords to save on reading time 🙂
There’s a benefit to being a landlord, although sometimes it really depends on the area you luck out with to own a property. Being a landlord (I really don’t like that name) will provide you with an additional stream of income which can be attractive as long as your operating cost don’t exceed your ability to make a profit margin. I know because I ended up in real estate by mistake then after seeing how taxes are geared towards encouraging small business owners and real estate investors I thought oh let me look into this further.
The property location area is crucial and I wish I could find the article I read that I thought was so interesting and true – about a couple who purchased a home in a suburban area. Them including the neighbors valued their property, how it looked, maintained it and made improvements as needed – saw it as a competiton. Because of this they are helping their property value increase.
I never really realized it or looked at it in that context before until now.
I remember my grandmother always being outside working to keep her yard and home clean and if she saw debris/trash laying or flying around on the sidewalk and grass she would actually pick it up. I didn’t like this because I had to help do this all the time – the entire block. And jeesh who wouldn’t, there’s gross stuff out there guys. We did the same at my parents house – we invested time and effort in to really good updates since we were on the corner of the block.
Well anyway – now I am excited and look forward to it. I appreciate homeowners who want to upkeep their house because it inadvertently helps you so that if you ever decide to sell, your home will be worth a little bit more than before.
But before I learned all of this I would hear people joke “Oh you want to be a slum lord huh, a landlord?” And I get why they might say that. Because many homes I have seen are not kept in the best condition. But there are many homes that are available – just requires much effort to search and find the right one.
It’s quite interesting because I do think maybe there might be many not-so good real estate investors out there. Some homes are not only tanking in property value but the rent collected is low (I’ll have to share an experience I had related to this while property hunting). And that doesn’t do you any good because depending on the setup of the property, there’s expenses you have to cover. Not to mention meeting certain requirements for those who are part of a subsidy program.
The point is as a landlord and investor you have to frame your mindset into the type of investor you want to be. This question forced me to research, listen to my gut, learn and observe. Should money be the motivating factor? Well yeah because that’s why you are doing it however, you still have to have good intentions but think more business. Because at the end of the day – it’s not just rent or money you are collecting but you have to be mindful enough to care about your investment – meaning finding good tenants, ensuring repairs are done, informing tenants of things they should do to avoid any accidents from occurring but also keeping aware of tenant laws and city laws for real estate owners so that you protect yourself legally.