Welcome to
first part of a two part series about getting into investment property business.
After riding ups and downs of stock market roller coaster for a while, an increasing number of investors are looking into property investment as a more stable alternative. With hot markets in many parts of United States, time may be ripe for you to get into this potentially lucrative trade. I would suggest, however, that you keep reading before you jump on first property you find. You just might find something in this article that will keep you from breaking bank and your back.
The hope of any investor is to build long-term wealth; this is a fairly straightforward principle and probably reason you're reading this article. There are however, some rules to play by in property investment game if you don't want to end up taking a shotgun with you every time rent needs to be collected. I'm talking about how to avoid becoming a 'slumlord'.
In order to best relate rules of being a successful landlord, let me share a story experienced by some extended family members. It's a great example of what NOT to do if you want to get most out of your investment property. After story we'll see what rules and lessons we can learn. Names have been changed to protect identity of innocent.
Ben bought a beater single-family investment property in a very bad area and he his two sons, Josh and Nathan, all got busy. They put in hardwood floors-don't want to have to replace carpet every time you have turn over, right? And then they thought they'd use really good paint-don't want have to repaint every time, right? And then they decided to splurge on good cabinetry and bathroom fixtures-a happy renter is a good renter, right? And to top it off, they put in nice towels on nice racks that said, "We are Family." Renters would appreciate that, right?
Right.
The first family to move in removed bedroom and cupboard doors for firewood, tore out nice bathroom fixtures and sold them at swap meet, and fired small caliber rounds through new hardwood floors. Ben discovered this when he received a call that roof was leaking and he should, "Get your *** down here and fix it!" He patiently tried to explain that roofs do that when you pull shingles for kindling. Other wonderful visits ensued, prompted by similar calls.It only took eight months to get them out of house; turns out that tenant rights as outlined by county enumerate more rights than rest of us enjoy collectively. As family moved out he noticed that mom and two older boys all sported matching shirts stitched with "We are Family." The rest carried various pieces of house.
Ben, Josh, and Nathan began to rebuild house, finding all sorts of interesting changes to its structure. Nothing really serious other than a supporting beam was chain-sawed out (apparently more firewood), tile pried up in one bathroom-no clear reason why, gang signs scratched into all glass and mirrors that weren't broken and other little surprises.
