Landlord Education - Worth More Than You Think
The most important skill you possess as a millionaire investor.
During a recent radio interview I was asked: “Is there one most important skill you possess which has made you a millionaire investor?” My answer; "Yes there is". But when I blurted out "landlording", the airwaves suddenly went dead! Regaining his composure, my host said; "Okay Jay, I think I get it, being a landlord gives you the right to collect the money!"
Obviously, collecting rents is part of a landlord’s job, but that wasn’t what I meant at all. Landlording skills go far beyond collecting the rents. Landlording is mostly people skills! It’s about your ability to successfully oversee and manage the people who occupy your properties.
In my landlording book, “MANAGING TENANTS AND TOILETS”, KJAY Publishing, I use the term Getting the fish to follow the boat. It means, developing a good relationship and cooperation with the folks who live in my properties. Not only does it make the job easier, but I can do it without becoming an alcoholic! I realize this may sound a bit cute or even disrespectful, but almost any day of the week you can read about tenant rebellions, lawsuits and rent strikes. This stuff applies double in my state (California) where the tenant support groups and civil liberties union nearly outnumber the renters.
For the record, the number one reason many starry-eyed beginners give up on their life-long dreams and either sell or walk away from their properties is
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because they fail to learn how to manage and control unruly tenants. Most of these beginners are quick to learn how to evaluate property values, write decent offers and how to finance their deals, but they seem to think landlording will work out just fine because they’re the owner. Please underline this next sentence and don’t forget it. Hardly anything works out fine without knowledge and education. One of the main reasons I strongly recommend buying your first property as quickly as you can and start managing it yourself is to gain the experience working with real live tenants. This on-the-job training (the best kind there is) will help you decide if owning rental properties is still your dream – or does it seem more like a nightmare.
Without knowledge, you might conclude that landlording is simply the nasty part of owning income-producing properties. Many beginners and even some experienced investors believe landlording is simply the price you must pay to own rental properties. They don’t seem to see the purpose or value in seeking further education! If you share that opinion – stay with me here! I intend to show how to use your landlording skills to earn big bucks!
It’s not my purpose to brag here – well, maybe just a little, but I do consider myself a highly skilled landlord. Even the worst behaving tenants don’t frighten me much! I’ve learned how to deal with most every kind of renter problem that comes along. I’ve developed remedies that work fairly well for just about any kind of tenant situation landlords must deal with. My “Managing Tenants by Mail Techniques” are an excellent example.
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In my book, MANAGING TENANTS AND TOILETS, I write about many different situations where I use them and how effective they work. The bottom line is this. The more landlording skills you have at your disposal, the less problems you’ll have with tenants. Now, let’s turn the subject to making money.
There is absolutely no easier way to negotiate super-size discounts than buying income properties from sellers who are trying to hide or get away from their tenants. I often talk with property owners who are downright afraid of their tenants. In my latest investment book; “SWEAT EQUITY”, I tell the story about negotiating a substantial discount when I agreed to purchase a five unit property from a highly motivated seller who was trying to get away from his tenant. Right before we were all set to close escrow, I asked the seller if he would show me the property corners hidden in the tall weeds and brush. "I can’t", he shouted, sounding almost hysterical. He then explained that his tenant in the small yellow house had told him – if you show up on the property again, I’ll kill you! That threat lowered my purchase price about $190,000. Obviously, I felt this tenant would treat me a bit kinder! The moral to this story: Landlording skills create a golden opportunity to earn big bucks from intimidated sellers.
In the example above, I was able to capitalize on the seller’s weakness, his lack of landlording skills! He was totally baffled by his tenant’s threats – and afraid! I later found out that he’d been fighting and arguing with his tenant for nearly four years before selling the property to me. I continually encourage beginners to learn all they can about landlording. The ability to handle tenants will allow you to purchase properties that most buyers want nothing to do with.
Most tenant problems are what I call “short-term problems”. I’ve found that sellers will do most anything to rid themselves of what they consider, a “problem property”. Big discounts and easy pay seller financing terms are what I’m seeding.
I’m more than happy to trade short-term tenant problems for “long-term” money-making benefits.
Since money’s not everything, there’s something else I consider just as important and very powerful. When you have superior landlording skills, no tenant will ever be able to intimidate you again! You’re truly in the driver’s seat. I subscribe to several monthly landlord-investor magazines. They each have a section for landlord-investor questions, which are answered by several local attorneys. I’m always blown away by how simply the questions about landlording are. I call them third grade questions. It’s apparent to me, based on these questions, how vulnerable many landlords are! They could easily be victimized by their tenants. Managing properties and tenants without knowledge puts any landlord at very high risk.
With education and solutions under your belt, your confidence level will rise to a point where mountain lions will quietly tip-toe around you. Can ya dig it!