Tenants as assets or liabilities

As I think back to Robert Kiyosaki's book "Rich Dad Poor Dad" I was pondering what he wrote about "invest in assets not liabilities".

When some landlords buy rental properties, they intend for these properties to be assets. But then they make the mistake of throwing the first warm body who walks in off the street with cash into the unit. They just want to collect their rent and don't fix problems when they arise.

Effectively, they are populating their assets with liabilities.

Without properly screening the tenants, and ensuring that you're going to get someone in who will treat your property with respect, and pay the rent, they are investing in liabilities.

When you screen diligently, and ensure that you're only renting to good, solid people, you're investing in 2 assets -- one is the building and one is the tenant.

Remember: Assets make you money, liabilities cost you money.