“I’m finally in it”, says the savvy investor. I’m finally in the investment game! He just had his first primetime real estate transaction. He’s been thinking about doing it for years. Finally with these prices, who can resist. His house is set to close next week. He wants to sit on it for awhile and let that appreciation and inflation do its work. Although he can’t afford letting it just sit there he should probably get a tenant. Heck, with his low mortgage payment from his great deal, he might even cash flow with monthly rental income. That sounds like a great idea. The more he thinks about it, the more the swirling thoughts hit him that he would need to worry about getting the home rent ready, marketing the property, showing the property, screening the tenant, writing up the contract, moving the tenant into the property, doing all the ongoing maintenance, collecting the rent, praying he would never need to evict the tenant, and this whole time being available non-stop for any incoming calls or issues. Are you kidding me? When will I have time to buy my second, third, or even fourth investment property? What a nightmare.
At the end of the day we all want to be that savvy investor. The reason we fail is because we end up taking on too much to save a buck. Where does that leave you besides more stress, extra weight and less hair? Do your homework on real estate but leave the property management up to the experts. They do it everyday and are worth every penny. You don’t want that weekend call from your tenant that the air conditioner is out when you’re out on the lake with your family. You don’t want to be standing in lines at the court house trying to file a judgment to get your tenant out of your beautiful home. These are all issues you shouldn’t even be considering. You need to be focusing on that next great real estate deal that is around every corner right now.
This is even more crucial if you are an out of state investor. So many investors make the mistake that they can play this game from long distance. I don’t want to tell you how many sad cases I have seen or properties I have taken over that have been in this situation. It is never pretty and is always thousands of dollars in lost mortgage payments, fix up costs, and most importantly time. Few investors also realize that most states can fine owners for not having an in state statutory agent representing them. These fines can be as high as $1000. There are also very specific laws that differ from state to state in regards to the Landlord Tenant Act and what your rights are as an owner and tenant. This is what I mean when I say do your homework.
Be smart and get in the investment game. Just don’t already be losing before you even start playing. Make a plan and then work the plan.