Longtime Landlords: All it's cracked up to be?
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Retired Landlord/Author · Commerce Township, MI · Member since 2012 · 1k+ posts · 1k+ votes
12yEvery post is "right on". I am a retired landlord. My husband and I did own properties in Detroit for 30 years and the outlining areas. We owned 40 properties and it was EXCITING. It was a CHALLENGE. But you know what? We were so busy and happy doing what we were doing that we didn't anticipate growing older, therefore the best advice I can give you is to make sure you have an EXIT PLAN! Especially for the day that YOU cannot physically do all the work yourself. Even though we had various handymen to help us with the work, we still did the physical labor ourselves for awhile, until the old bones were causing us to eat Tylenol like candy, then we turned over most of the labor and repairs to our handymen, but the more dangerous Detroit became, the more our handymen stopped working for us, because their vans were stolen and their toles taken, and even one of our men, lost his life. And soon we found ourselves having no handyman want to come to Detroit and work with a ten foot pole and we were alone. Trying to take care of 40 rental units and everything else that is involved in being a landlord including handling my own court cases, was overwhelming, and in 2009 we finally sold our homes and took a great loss.
When I first began being a Landlord I didn't have a clue how to get tenants to pay their rent. I was frustrated every moment of the day, to the point that I wanted a Divorce! I wanted out! But my husband's favorite words to me were, "Yea, sure, just pick up your baseball glove and go home to mommie and daddy. You're not a loser! You don't quit! You're a winner! " And I knew he was right. I wasn't a quitter! Being a Landlord is and was and still is, to this day, what defines me and is who I am and always will be.
So...being a person who has always been a business woman from the day I was born, yep I was born with a pencil behind my ear, and a calculator in my hand, I decided that I had looked at this entire adventure completely wrong. Instead of looking at landlording as a business, I viewed it as just a person who bought houses and rented them out, just like every newbie feels when they first get into this business! And, that, my BP friends is where we go wrong!
That day, I developed a business plan and I put it into action. I no longer fought with tenants over rent verbally or ever, I never got frustrated because I let my Lease Agreement and the law work for me. And I had a plan. I had rules and regulations in the tenants lease agreement which is a legal document I studied the landlord/tenant laws and the City Ordinances of where my properties were located. And I began setting up my home office like it should have been setup, with the right equipment to help me be a winner.
Everything I did I put it in writing and I mean everything. Every conversation I had with a tenantand I followed up that conversation in writing and sent it to the tenants confirming our conversation of that day.
I purchased Vonage Phone and all voice message were recorded and a record stored to my online account. The day, the minute, the hour, how long the conversation went, etc. And it kept a record of my phone calls to them! Vonage became my very best friend along with Stamps.com. Stamps.com recorded every letter I sent, the date, the time, and how I sent it. Two very powerful tools that helped me from going to court over every little thing. It proved my cases in court and I never lost a case ever in my landlording career and I handled them all myself for 13 years.
Once I viewed landlording as a business, it began to run like a well oiled machine. My tenants were happy because they found stability with me, and my tenants stayed with us long term, some for 20 years.
Do I miss it, yea I do, but I'm still involved in other ways now.
I hope I have given you incentive to stay the course, just be careful where you invest. Develop a plan, and have an exit plan. Take care of your tenants. Make them happy, and you and your family will be happy.
Always make sure that you have profit of at least $100.00 per rental unit when all expenses are paid. Not every house will have repairs done to it every month so you will have big profits most of the time if you run this as business and do things right.
One other tip. Try to buy as many houses as you can and keep buying. Having one house or two or three won't cut it. You have tenants who won't pay their rent. You will have vacancies. You will have repairs that you didn't anticipate, like furnaces, new roofs, water heaters, things that go wrong. The more houses you own, the more those houses keep you running and going and able to pay those repairs without stress on you and that's what makes you happy. Having enough Equity in your investment, in your rental homes, helps maintain that investments and it just doesn't get any bettere than that!
Good luck to you
Nancy Neville
30 Replies
- Wholesaler · Holiday, FL · Member since 2013 · 571 posts · 221 votes12y
I just used one of my standard observations over on a different thread - but it applies just as well here. When you ask: how is that landlording thing? Does it work out well? Does it work well over time? remember that I told you this:
In Life it is never the Situation - it is always the Man.
(and of course I use "man" in the idiomatic sense here; means mankind - and so also include women <g>)
And landlording is that way too. Hey! Maybe we could re-phrase it as: In Landlording it is never the Land - it is always the Lord <g>
- Investor · Chicago, IL · Member since 2012 · 80 posts · 31 votes12y
Nice Thread, let me jump in.
- As with most things with time (experience) and due diligence it can get easier.
- I have been a landlord for 18 years and I have seen both sides. I own over 10 properties and the cash flow that they through off every month keeps me motivated to keep my acquisitions team busy. Of course routine maintenance is key for a great portfolio and nice tenant retention.
- There are almost always telltale signs within your local markets. Most have already been mentioned.
- I agree with many here on BP when they speak of the snowball effect. Once I got to 7 properties everything kind of took course from there. But by no means was it any easier just seemed that way because I had more experience.
Nice Investing
Dave
- Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes12y
I love this site. I can learn so much everyday it is astounding the level of knowledge and experience on this forum.
Some people on this board might have been investing since I was born (38 years) ago.
I will say as far as exit strategies here is what I typically see from my clients. Many start off in residential and then build up a portfolio over time and then they transition to multifamily and maybe some commercial. I get calls from people exiting residential to move to the commercial space or MF.
Many later on in life sell off and go into something hands off like triple net leasing for estate planning and retirement or they sell off their paid off multifamily on owner finance type deals to keep getting cash flow.
- Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes12y
I forgot to mention some skip the investing cycle I mentioned completely if they have substantial capital already they go passive (triple net) or make residential just a small part of their portfolio.
- Investor · Middletown, NJ · Member since 2008 · 2k+ posts · 1k+ votes12y
This is a great topic, and great participants. As @Bill S. pointed out, those that don't read or post on Bigger Pockets don't learn or adapt. I've recommended this site to many people - in banking, construction, investments, etc. I've been a member for about 6 years and made great friends. I don't know how my husband and I would have learned so much without this great resource.
As far as the OP, we consider landlording to be a success. Not always easy, but as a former tech project manager, I'm suited to the detailed management of properties and tenants. Our friends can't imagine how we do it, or why, because there have been a few accidental landlords among them who were burned by one bad tenant. They've also heard a few of our war stories. But those are still in the minority - what is there to say about the good tenants? There's no drama there.
- It definitely gets easier if you stick to your processes and rules for the tenants.
- Provide the best product in the area and you'll get the better tenants faster.
- Know the law; retain an attorney to write your leases. They will be defending them in court. Spend the money now, or spend a lot more later if things get out of control and you can't handle it on your own.
- Keep excellent records. I used a simple Excel spreadsheet for our first few properties, and then our accountant told us to find someone more skilled in multiple rentals than she was. The new CPA moved us to Quickbooks and we really saw where the money was going.
- It's a great feeling to build a future that isn't dependent on a corporate pension (if there is one) or scrimping and saving.
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