I am on my way to purchasing my first multi unit residential property. A friend of mine has several and he is very negative about the whole experience, and not doin well financially. I have ran the numbers on several of the units I want to purchase and although I am a beginner I believe I have found several that will yield great returns with little risk. Deep down I KNOW the reason he is doing poorly is because he bought the properties 3-4 years ago when everything was way overpriced in our area. Prices have dropped significantly and there are plenty of motivated sellers out there. So like I said I know all of this, yet when I hear him describe his experiences I cannot help but be put off a little bit. How do you guys deal with the negativity of your peers and have it not affect your outlook?
A lot of the negativity you hear from new landlords is caused by the shock of dealing with low life people.
The economic status of people who can afford to purchase an apartment building is usually high enough that they have no exposure to drug dealers and welfare cheats. Quite often, they have grown up thinking that people are basically good, if you just give them a chance.
Lying cheatin’ destructive tenants can turn you cynical really fast. You have to learn how to deal with them in order to survive as a landlord.
Losing control of your tenants is a really good way to lose a lot of money.
The tenant pool for apartments tends to be lower quality that that for houses (and the house ones are bad enough). So screening out the bad ones and getting good tenants can be slow and leave you with vacancies for longer periods of time.
You have to know that a vacancy loses less money than you will lose by putting the wrong tenant into your unit. Otherwise, you are in for a miserable experience.
Thats a good point to remember. I used to work as a police officer so I am well aware of the realities of certain types of people IE drug dealers/deadbeats and have no problem dealing with people like that. I guess as long as I keep in mind that vacancy is better than people who dont pay and/or destroy property I will keep from framing it as a completely negative experience.
Don’t forget, there’s a learning curve to getting better at landlording as with everything else. It’s not a perfect system. I still get bad tenants that fall through the cracks, like say good woman tenant that checks out that later hooks up with a maniac boyfriend that moves in and becomes someone you’d never let in directly. You just need to manage your expectations instead of letting it become a completely negative experience. If you really want this, you’ll learn to develop an efficient system to deal with them and control your emotions to succeed in this field.
As for the negative friends, me personally, I tolerate the negativity once in a while if I’ve known them for a long time because everybody blows off steam once in a while and that’s ok (they may still be useful in future), but if it’s ongoing and like that every time you see them then I’d just lay down the issue and cut them loose. It’s just not worth keeping them around. You don’t need that level of additional stress and confusion.
[i][/i] Best of luck. Where are you from and where are you investing?
I hate the term LANDLORDING.
The people who run my REIA group think that being a Land lord is great.
You need to try to have other people do what you do and manage them.
It only makes sense.
If this is misery, why do it?
I just do not get it when people do not get in real estate without a WHY.
Good luck
JOHN
NJ
Thats a good point too John, I appreciate all of the responses. I am from Grand Rapids, MI and believe I have decided to use a property management firm here that although fairly new has a great track record and a positive approach to improving the communities they manage rather than just collecting a check. To me the 8 perent cut they will taking seems well worth the free time I will be afforded to pursue other deals. Now I just gotta find that property haha
The best way to handle negativity from your peers is to prove them wrong in a major way. Do way better than them and they will eventually see that their advice is no longer needed. Never take financial advice from somebody that is not making more money than you. :beer