Much like Tip #3 and #4, if you look at the numbers and take all the emotions out you are able to make much better decisions. DO NOT FALL IN LOVE WITH A PROPERTY OR TENANTS.
Just because a property is pretty or it reminds you of your childhood home does not make it a good investment. Real Estate investing and Landlording is a business, the more successful you become at it the more risks you can take and the more charitable acts you can make, but when you start out it is imperative you look at numbers first to ensure everything works.
As a Real Estate Investor you need to have a plan for properties you purchase and to stick with that plan. Especially when you start out. One tip many successful investors use is to specialize in a niche and figure out what works within that niche and then focus only on properties that fit those specifications.This is where knowing the areas average rents, average prices and current mortgage rates come into play. Knowing these numbers helps you calculate whether the property you are looking at works or not.
Taking the emotions out also applies to your tenants. You may have tenants who have been wonderful in the past, but for some reason cannot or won’t pay rent. While it’s important to be fair and help while you can, if they are not paying, you still have to make your mortgage payments and the money is coming directly out of your pocket. Just because you are willing to wait for your money from the tenant doesn’t mean the bank will be so generous.
Think about how this affects your business, if you start missing mortgage payment the tenants can move on without any real repercussions, but a foreclosure could affect you for many years to come.
If you missed Tip #1, it is available here, Landlord Tips #1, Don’t buy where you live, buy where tenants live
If you missed Tip #2, it is available here, Landlord Tips #2, Spend Extra Time Screening Tenants, So You Don’t Spend Time Evicting Them Later
If you missed Tip #3, it is available here, Landlord Tips #3 – Being a Landlord is a Business, Treat it Like a Business
If you missed Tip #4, it is available here, Landlord Tips #4 – Don’t React, Pre-Act
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