Is landlording the way to go if you are starting into real estate investing today?
Receiving cash flow from rental residuals is an exciting idea. If the rental housing is congregated in large apartments within a focused area, the costs of management and maintenance are more economical. Rentals are even more appropriate when all of the portfolio is in the "path of developmental progress" with "upward mobility" population of a prime metropolitan city. This results in clustered landlording of an area free of crime, prostitution and drug traffic. However, whether purchasing large quantities of these apartment complex units as fix-up properties or pristine properties, acquisition usually demands deep-pockets and is not within the cash range availability of the beginning real estate investor. Therefore, I suggest such acquisition of these larger apartment properties after some experience in real estate investing has resulted in a big wad of cash in the hip pocket. For the beginning real estate investor, the choice is usually between becoming a near-slumlord or fixing up cheap properties for resale.
I recommend residential fixup for quick return on investment and less hassle from landlording for the beginner.
I bought $10 million dollars in rental properties during my first four years in the business, and it made me a multi-millionaire. I followed the instruction of the books and seminars precisely. It made me rich. But it was a costly mistake. In fact, in my opinion, becoming a landlord in the beginning of my real estate investing career was what I consider my "$10 Million Mistake."
Perhaps an explanation of what I term a serious "mistake" can guide your decision in starting a real estate investing career.
Problem 1. I can clean out toilets pretty well. I've cleaned out quite a few. It's not the most fun activity I've ever had. I never thought of it as a party. But I can clean toilets in the maintenance of rental property as well as anyone.
Cleaning toilets is simply symbolic of all the upkeep jobs necessary for being a landlord. But let me assure you, there are many, many other detestable jobs required in landlording, too.
I can clean out one toilet. But cleaning out toilets in $10 million dollars worth of properties is a little beyond me. So, that's why I had to quickly start an in-house maintenance company.
Problem 2. I can rent one apartment to an applicant. But renting $10 million dollars worth of properties is beyond me. So that's why I had to start an in-house management company.
Here's the point. Any person who becomes a landlord can handle a few properties. But a few rental properties seldom make you rich. I "became rich" as a landlord by acquiring a lot of properties which required a lot of renting and a lot of maintenance work.
Eventually, my landlording life became helter-skelter.
I never want to be a landlord again in this same capacity. It is a deterrent to real estate investing success.
Real estate investing has many better opportunities other than landlording.
The easiest and most quickly initiated opportunity is the fixup of cheap housing. With efficiency, the beginning real estate investor can acquire a cheap house with little or no money down, repair it with "sweat equity," and dispose of it through a sale within 30 days for $5000 to $10,000 profit minimally. Several of these cheap houses can quickly replace a job income and can lead to full-time real estate investing.
Phil Speer, Ph.D., started his real estate investing career 25 years ago. Without the availability of credit and using only a $10 bill, he purchased $1 million in properties in his first year, and had accumulated $10 million in properties by his fourth year. http://www.CashinHouses.com/ He was featured in a Wall St.Journal editorial as most successful investor in the Nothing Down Real Estate Movement, and was honored with a Caribbean cruise as top investor of the year. In his hometown of Nashville, Tennessee, he has been a businessman and Human Resources Consultant for 30 years. He is an author, speaker and seminar director.
To learn how to profit in real estate investing, even without cash or credit, read his report at http://www.BigMoneyinRealEstat e.com/nomoneydown/flipping.html/ Subscription is free to his Fix-up Ezine. He and other contributing authors provide free articles and resources on real estate investing at his online "Academy of Advanced Real Estate Investing Techniques" at http://www.AAREIT.com/
Successful real estate investing depends largely on a correct assessment... Read More
The secret disclosed on how you too could achieve financial... Read More
Turning your house into the home of a buyer's dreams... Read More
How the heck do you find a "motivated seller?"The motivated... Read More
It seems that everyone loves a good real estate story.... Read More
One of the biggest problems individuals just starting out have... Read More
Why hire rental property management? Because doing it all yourself... Read More
Second homes in favourite holiday destinations such as Spain are... Read More
Buying a house can be a daunting task, even for... Read More
While most investors have got involved in property investing because... Read More
There are two sides to a feasibility study and in... Read More
A bit about VeniceVenice, Florida was named by an early... Read More
For those of you who were not psychology majors the... Read More
There are two sides to real estate development feasibility study:... Read More
If you've read my article "Purchasing Property With No Money... Read More
After riding the ups and downs of the stock market... Read More
In medicine, a placebo is a pill that you think... Read More
Many real estate investors enjoy "flipping houses," or buying and... Read More
Happy, Long-term Good Tenants Paying On Time How to Create... Read More
From the desk of Colm Dillon ... Author "Residential Development... Read More
Beauty is in the eye of the beholder, particularly when... Read More
There are several small businesses that retain hundred year old... Read More
Selling your home on your own, without a Realtor, is... Read More
I know many investors step into the game of real... Read More
She reached the phone on its second ring. "This is... Read More
So you're interested in entering the world of property management?... Read More
Maui is a great place for families of any size.... Read More
There is a relatively new and not always well understood... Read More
Buying foreclosures can be extremely profitable for real estate investors.... Read More
Closing costs are often the last thing a person thinks... Read More
Buying to let is considered a serious investment and should... Read More
Buying overseas property is not always for the fainthearted but... Read More
The UK has gone property TV crazy. There are now... Read More
Property Investing Secrets:How to Sell to 100% of the Market... Read More
Repairing a rental home (or your own home) use to... Read More
You're selling your home as a FSBO (for sale by... Read More
Money in escrow is "dead money". It doesn't earn interest... Read More
How's the real estate marketing doing? Is the huge jump... Read More
It's not uncommon for an investor to sell a house... Read More
Completely rebuilding a house is not necessary to make money... Read More
If you are investing in real estate you will face... Read More
Seller's Showing Instructions1. When the agent arrives with the potential... Read More
Real estate investors familiar mantra location, location, location are nervously... Read More
When is the best time to buy? When is the... Read More
A Powerful Suggested Technique for YOUR Home & Property Search... Read More
Learn how to sell your property faster and at the... Read More
An example of seller financing: Years ago I bought a... Read More
Demanding consumers"Internet buyers tend to be better informed on market... Read More
Of course you should. I practice this for quite a... Read More
I have been seeing the market on fire for a... Read More
Given the current interest (dare I say hysteria) associated with... Read More
What is a loft apartment? At the most basic level... Read More
Having your house appraised can be a scary step in... Read More
Houses for sale by owner, also known as "FSBOs," are... Read More
Consider the statistic in the title for a moment.8/10 millionaires... Read More
My report is for you to use your power to... Read More
Real estate: availability and costIn 2000, the median home value... Read More
Styles of houses vary across the country. From the New... Read More
Did you know that the sales flyer is the most... Read More
I am a total geek.A few weeks ago, late at... Read More
If you are in the market to purchase a home,... Read More
Here to stay and firmly established in the U.S. mortgage... Read More
When painting your home for resale, choosing the right colors... Read More
In medicine, a placebo is a pill that you think... Read More
The Traditional FavouritesOver the last five to ten years, UK... Read More
We've all made bad decisions in the past. Don't you... Read More
Real Estate |