Should I buy a rental property?
My answer will always be "YES!".
To be honest, I’m not sure I have EVER heard a single story of someone who regretted it.
Doesn’t mean it hasn’t happened, I’ve just never heard of it!
When I came home from singing on cruise-ships, buying wasn’t even on my radar. I was looking for a place to rent….
Then my friend (THANK GOODNESS!!!) laid down some wisdom.
“Why would you pay rent to someone else and pay off their mortgage when you can pay off your own?”
Cue: Heavenly voices
I am literally indebted to this friend for this one piece of advice for the rest of time. It’s why I now have a real estate portfolio that has launched me into millionaire status at the ripe old age of 40.
There were obstacles for sure, so if you’re not up for figuring this out, you may not be a rental property kinda person….
First obstacle: There was NO WAY I was qualifying for a mortgage on my own.
Well to be fair, I didn’t look into less “traditional” mortgage options like B lenders etc…So off to Dad I went and asked him to co-sign. He was of course apprehensive at first, but we made a deal. I told him how much the monthly payments were…he agreed that if for some reason I couldn’t pay it, I had three month and then he would sell the property. Fair trade I thought….
Here’s the best part. It never happened. He did not have to contribute to the house at all. His name was simply as a “backup”.
So get creative. Don’t assume anything. Ask for help. And research your options.
Where there is a will, there IS a way.
Second obstacle: I couldn’t afford anything REALLY nice.
I bought a 3 unit house, planning to move into the main floor and live there, but honestly it wasn’t very “nice”. I had taken the advice of my realtor (also a rental property owner) who said, buy something ugly, move in and then slowly make it pretty.
Good thing I surround myself with smart peeps eh?
Third obstacle: Bad tenants
Ok this one is super important. When I first bought the place there was a rule..when you purchased a rental property you could not evict the current tenants. Mine were not the greatest….but to be fair, neither was the house!
So I was patient. I waited and waited and waited. I increased the rent the legal amount whenever I could. And I waited and waited. And while I waited I set aside some of the income I was generating, so that as soon as a tenant left I could jump into that unit, freshen it up, make it pretty and then advertise the unit at a higher rent. I did this with all three units in a few years.
After 3 years all three apartments were completely transformed and the equity in the property had gone up so much I was able to leverage that property to buy a second house.
Fourth obstacle: Living in a construction zone.
Look, I’m not gonna lie. I didn’t love the unit I lived in at first and it certainly wasn’t my dream house. The fact that I was working on it on and off for 3 years was frustrating at times, but at the end of the day I knew the sacrifice I made NOW was going to pay me LATER. #worthit
Fifth obstacle: How do I choose new tenants???
Here’s the fun one.
You have to trust your gut. I wish it was more precise than that, but when people say to me,
“Oh I would never be a landlord! I have heard HORROR stories!”
I can very honestly say the only time I regretted a tenant is when I rushed into a decision and did not listen to my gut. It happened once and never happened again. I do the normal credit check, employment letter, references, first and last month's rent, but NOTHING beats your gut when it comes to selecting who can live in your house.
At the end of the day, rental properties are not for everyone, but I LOVE them. They are part of my retirement plan and have created an extra stream of income that made a big difference over the years. So if you’re up for some challenges and a little hustle and sweat equity…..
….then "YES, buy that rental property!!!!!"
Happy landlording!!!! 😍 Need help finding a property or just want to ask me some questions! Click the CONTACT button on my page!