Most successful landlords have career spans of 10 years or more. If a landlord becomes successful and retires within 10 years with a big chunk of money, that would be considered a miracle. So generally speaking the landlord business is a long-term business.
We are going to discuss how a landlord doesn’t get fatigued over the long career. At each stage, how you can inspire yourself to keep going.
Pre-thoughts and the First Step in Real Estate Investment
This stage is not exactly landlording, but it’s a very much part of your landlord business. When you are still waiting to take the first step of buying the first investment property.
This is also the most difficult step in the landlord’s life cycle to take the plunge in comparison with other stages. Because you are approaching an unknown terrain. You can only imagine what’s in store for the future.
Your inspiration may be someone in your life, from whom you have seen the success of being the landlord first hand. You here on this page, reading this article. Because something or someone triggered you to look for more information about real estate investment or landlording.
What you can do to keep remain focused?
The most important advice at this stage: Make the timetable of everything you do.
Start gaining more knowledge of the subject. So you can take the first step on a very strong footing. Search on the internet, meet up with professionals like the real estate agent, the mortgage advisor. Talk to whoever you know working as a landlord. Attend free seminars and webinars. Maintain a diary of the information.
These steps, if taken, methodically with a focus to come to the decision in a timely manner, would get you extremely involved in the process of acquiring your first rental. And that would result in the informed action. Do not let the fact out of your focus that this first step would have a big role in your long-lasting success!
Stage 2: You acquired your First Rental Property
Each and every step of the landlord career has its own importance. This is the stage when you start learning the landlord skills. It’s a very crucial stage in a sense that if you fail to recognize it’s importance and don’t take necessary action to educate yourself, you may either fail or that first rental may become your first and last.
What you can do to keep remain focused?
If you methodically work to learn the landlord skills, it would do wonder to your psyche. The methods to learn about the subject remain the same. The internet, your state and provincial websites to learn about landlord-tenant laws, seminar, webinar and so on. However, the big difference is that now you’d be able to practise and learn.
Let me give you an example: you have prepared your first lease and ensured all the important clauses included in the lease, and you meet up with the new tenant and get it signed, explaining each and every clause in detail. This would do a wonder to your self-confidence and your inspiration to progress!
The followings are the landlord’s responsibility which you can start performing: Find the tenant, write an advertisement, pre-screening the tenant over the phone, perform the screening process, write the lease, walk through the lease before your prospective tenant signs it, collect rent, give out the eviction notice, attend the repairs and maintenance issues, maintain the rent roll and expanse statements, evict the tenant and so on. The issues can be unlimited. You just have to traverse through the learning curve.
There are millions of landlord all over North America who fulfill all or part of their duties by themselves. You may hire the agencies to delegate the duties. Or you can do-it-yourself. More your DIY, better it is for you profitability-wise.
Stage 3: Settling down in the role of the landlord and keep buying more rentals
This is a transitional stage. Slowly and gradually you would settle down in your role of the landlord. You may become from novice to expert in performing the landlord duties. That depends upon your own hard work.
This is also a stage of evaluation and reflections. You have to optimize your landlord operation. keep looking for the areas to improve the efficiencies. You got to recognize your skills and limitations. For an example, are you able to maintain paperwork and records of your rental property? Are you able to do the small repairs by yourself? If not, you have to outsource your work to the property management company. There may be many areas where you can develop the skills of do-it-yourself. Can save you lots of money.
What should be your focus of attention at this stage?
This may be the stage that allows you the liberty to think about the future of your landlord business. You’d see a huge capital growth because of the capital appreciation and the accumulation of equity.
Depending on your comfort zone, you’d be able to decide where to stop. If you have mould well in your landlord role, you’d be inspired to keep acquiring more properties. As the above diagram shows, you can utilize the capital growth to buy more properties. Or you can work aggressively to reduce down your mortgage debt. Either way, the growth of your capital portfolio would be a huge inspiration for you and will keep you busy to further increase your benefit.
Looking to Exit
At some stage, you’d realize that enough is enough. And you don’t have desire or energy to continue the same way as before. So what is your inspiration at this stage? The retirement is a huge inspiration for many. To do whatever you were not able to do till now. The retirement gives you that opportunity.
What should be your focus of attention?
So your goal is to retire now. You have to retire well.
2 Most important things you have to keep in mind –
- The landlord needs full proof exit strategy with regards to the sale of all the properties and taxation.
- The proceeds of the sale should be well invested so that the owner enjoys fruits of the successful business.
If careful planning is not done at this stage, it can have a huge implication. So you really need to focus and do the need. The consequences of your decision or not making the decision soon enough should keep you inspired to make the move. Get other professionals involved to keep you moving in the right direction. Consult the realtor, the tax accountant and your investment advisor to help you out. This stage is relatively easier for any landlord as the prize at the end of this stage is sweet!
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