“90% of millionaires became so through owning real estate. ”
That’s according to David Bach, author of The Automatic Millionaire Homeowner.
And he’s not alone in that belief. Many of the world’s richest people made their money in real estate. So, to be wealthy, you need to start thinking about real estate investing. While it’s true that you can rely on the property manager to manage your investment, it’s far better to manage rental properties yourself in the long run. Being a landlord not only maximizes your rental cash flow, and
greatly accelerates your portfolio growth but also provides valuable experience. So, when it’s time to find a manager for your sizable portfolio, you know who makes a good property manager.
So, what makes a successful landlord?
1. They’re always learning
The best landlords are lifelong learners. They understand that the real estate market is constantly changing and that they need to change with it. They read books and blogs, listen to podcasts, and take courses to stay up-to-date on the latest trends. To be fair, a great learner would succeed no matter what they do, and being a landlord is not an exception.
2. They delegate and build a team
The best landlords know that they can’t do everything themselves. They build a team of experts to help them with different aspects of their business. This might include a real estate agent, contractor, accountant, and handyman. While in the beginning, a hands-on approach may be more cost-effective and easier. As your portfolio size starts to grow, it’s far more effective to delegate and manage things at a project level, than to work on the nitty-gritty of drywall, painting, flooring and etc.
3. They have a long-term plan
The best landlords have a clear vision for their business and know where they want to accomplish. They don’t just buy any property that comes their way. They have criteria for the type of properties they want to add to their portfolio and only make investments that fit their plan. This allows them to stay focused and not get sidetracked by opportunities that may not be the best fit for their business. Having consistency between the properties within the portfolio adds value to the portfolio, because, it’s easier to liquidate a homogenous portfolio than a mix-match of all types. Having a long-term plan is just about the acquisition strategy, but also about the exit strategy. Some have the ambition of building a real estate empire, while other would stop once they reach a certain level of passive income, and would rather slow down to enjoy the freedom they have.
4. They know the market
The best landlords know their rental market inside and out. They understand what renters are looking for and what they’re willing to pay for it. They keep up with trends and know when it’s time to make changes to their properties, like adding new amenities or renovating units. This knowledge allows them to charge rent that is in line with what the market will bear.
5. They understand the numbers
The best landlords know that real estate is a business and, like any business, it needs to be profitable. They keep track of their income and expenses and make sure they are cash flow positive. They understand the tax benefits of real estate investing and how to maximize them. They also have a solid understanding of financing and use leverage to grow their portfolio.
6. They take care of their properties
The best landlords take pride in their properties and work hard to keep them well-maintained. They understand that happy tenants lead to higher occupancy rates, which leads to more profitability.
7. Use the right landlord software to automate low-level tasks, such as managing receipts, accounting, managing turnover leads, accepting payments, etc. Websites, like PortfolioBay, are becoming increasingly popular for landlords to automate and streamline their rental management, so, they can focus on the strategy part better while managing a sizable portfolio. For example, late payment is one of the biggest wastes of time for landlords to follow up. PortfolioBay automatically enforces late fees to encourage on-time payment without the landlord even lifting a finger to enforce.
While there are other traits successful landlords may have, these are the seven most common traits in all successful landlords. If you’re thinking about becoming a landlord, or you’re already a landlord and looking to improve your business, make sure you are doing these seven things, and being successful at landlording can be very rewarding in the long run.