This Is Why It's Not Free Money Folks!!

Most people that have experience as a landlord will tell you that it is tough work.  I personally don't expect to be just handed an extra $300 to $400 dollars a month in cash flow without some added work.  I just never expected to hear my own mother to complain.  After all, she has been around REI for over 30 years as a landlord and note investor. 

She just rented out an apartment that I built for her in her VERY large garage for $625 a month.  This will create her about $500 a month in free cash flow after utilites.  Not too shabby for the $8k price tag of the renovations!!  Howeve reality is now setting in.  There will be some extra WORK involved in this!!!  To be fair the tenant just moved in and is getting used to life in a 1 bedroom efficiency.  It is to be expected  that they will overestimate the furniture that can fit, have a few things that need attention around the place etc.  Yes you will have to do some work to rent out property.  Just think of it this way, if you make $60k a year to work a 40 hour work week, how hard to do you have to work in this recession to get a 10% raise?  Pretty darn hard I bet. 

Take the last 6 months in my business.  I have had one property manager go out of business, and my new one had a "miscommunication" with me that meant he let the pipes in one of my vacant homes freeze.  I have had tenants move out without telling me, and some stay past the end date of their lease and not want to pay the raised rent.  This business is not for the lazy.  Especially if it is not your full time job.  Most of you know that this blog is about investing from out of state.  This means that you can take your normal amount of time spent as a landlord and double it.  Fortunately if you do things the smart way, most of the heavy lifting can be done just once.  More on that in upcoming posts.