Whether you’ve planned, researched, and set out to purchase a rental property, inherited a property, or just decided it was time to rent out your own home, there are multiple paths you can take to become a landlord. Here’s how it happened for me.
It was the late ‘90s, and I was a high school student who didn’t have a clue what I wanted to do when I was older. My mom sold real estate, and my dad was in construction. Being very observant at that age I would regularly overhear them talking about investing in real estate. Strangely, however, neither of them tried to steer me in one direction or the other. Maybe it was because four kids, bills and just plain ol’ life getting in the way deterred them from pursuing their idea and of investing in real estate. But something was planted inside of me, and it turned out to be something I would think about often.
Let’s jump ahead to late August of 2005 and talk about certain events that would be pivotal in my journey. After Katrina—you know the hurricane that pretty much devastated the greater New Orleans area? Yeah, that one. It’s hard to forget. But sometimes such a crisis can force a person to face up to challenges and find ways to solve problems. I began gutting houses for a contractor and running materials to different job sites. It was then that I realized that 100s, if not, 1000s of people were putting their homes back together, and just as many weren’t. It seemed like a golden opportunity to buy up these houses, renovate and then sell them. Well I didn’t have superb credit, a stellar job, or the knowhow for that matter. So I did what anyone would do . . . got a real estate license. “I’ll figure out what needs to be done after I get this license,” so I thought.
But then, the market stagnated, and I managed to work with one buyer who looked at one house. I decided this wasn’t going to cut it, and it was time I got a “real” job. So I inactivated my license, which ended up being a way better decision than just letting it go all together.
The year was 2008, and I was making more money civil surveying at an oil refinery in a week than I knew what to do with. And then the unimaginable happened. The housing market, along with the economy, tanked. I was beginning to think real estate just wasn’t in the cards for me. I did, however, manage to buy my first property which was my primary residence.
In 2011, my interest in real estate was reignited, and I decided to reactivate my license in the hopes of assisting a few friends in the home buying-and-selling game. It worked! As more and more of my friends were buying and eventually selling their homes, I was becoming more and more familiar with the housing market. The only issue? I couldn’t save any of the money. Light bulb! If I rent out my house and move in with a family member, I’ll be able to save enough money to buy my first investment property!
And so my journey into landlording began! I parlayed that experience along with the money I saved into a down payment on my first official investment property—it was a single-family home that was banked owned. (You’ll get a chance to read about the details of this deal in a later blog.) I have since amassed multiple buy-and-hold properties and also bought and flipped a few. I also manage other people’s rental properties. My own experiences and the research of other investor’s prior experiences played a key role in giving me the motivation to start my own brokerage and expand my property management business.
That’s my story. Yours might be different. But I believe there should be some common denominators in everyone’s landlording journey if they expect to become successful. Dive right in! Of course don’t go in blindly but ACTION is the start of success. Don’t over think it! “Paralysis by analysis” is a quote that sticks with me when I am analyzing a potential deal. There is only so much research one can do before they start to lose touch of what really matters…growing your wealth!
Whether you start growing your portfolio of properties or decide to seek the advice of a qualified professional to get into the business, I suggest you do a couple things. Find a company or individual who is an actual investor and make sure you interview multiple Property Managers/real estate agents.
Jack Harris, Broker/Owner
Pelican State Realty