According to census figures there are almost nine million single family rental property units in the United States, and more than twice as many units in multi-family units. The vast majority of these are owned by individual owners (as opposed to corporations). People like you.
Another interesting figure is that of these owners, almost a third report that they would not buy property again. Real estate is one of the most solid paths to building a sound economic future, but it’s not for everyone. So – why so many burned-out landlords? Well there are a lot of answers to that question, but in the next few posts I’d like to touch on some principles that might help investors to maintain a healthy work-life balance.
A couple of years ago I passed a for-sale-by-owner sign in front of a small patio home in an upscale subdivision of West Houston. I wasn’t particularly interested in this neighborhood, but when two months later I noticed that the sign was still there I called the number and left a message.
Not sixty seconds later my phone rang. It was the owner, wanting to know when I’d like to see the property. Since I was in the neighborhood I responded “...well how about now?”
The gentleman who showed up had a weary, shell-shocked look to him. Everything about his posture and mannerisms indicated that he was a member of that most blighted of species: the burned out real estate investor. Turns out he also owned another property down the street. Both were vacant. As he told me about the properties his eyes sent me a clear signal: “make me an offer…please!” So I offered to take them both off his hands, and we closed a couple of weeks later at 20% below market value.
Deals like this are out there if you keep your eyes open. But over the long term they key is to be the guy looking for the bargain, not the guy looking to unload a property at below market value because it’s causing you a headache.
In my opinion there are four key factors to keep in mind, and following them will help you keep your sanity (and give you the energy to keep building your portfolio). I’ll talk about each of them in turn in coming posts.
