THE BOTTOM LINE

General Thoughts:
This is the section where we are going to let you know the way it really is, where we separate the men from the boys... the bottom line. First and foremost, if you are new to owning rentals, even if it is just one, you must understand that you just went into business, the land lording business...and it isn't always easy. With a business comes the risk of loss, just like any investment. It's amazing how many people think that just because they have a rental, now they are guaranteed an income. Sorry, just like starting or being in any business, it doesn't always work out like you expect.

Who is responsible for your property?:
Owners need to remember that EVERYTHING involved in the property is ultimately their responsibility. It's your property. The property management firm or individual you select to help you with your property does not own it. Property Managers are somewhat like Stock Brokers. We can, to the best of our ability, help guide your investment into a profitable venture. But if the tenant destroys the place, it's still your property. We can't see the future. It's similar to a stock broker advising you, based on a company’s financial's (background), to invest in say, World Com. Then later, the Management of World Com (tenants) take the stock and the company into oblivion. That was not the Stock Brokers (Property Managers) fault. For the most part, TENANTS cause bad situations.... We are not the ones that didn't pay the rent. We didn't put a whole behind the bedroom door. We didn't bring the pit bull into the house, after the move-in. We are here to do our best to see that these problems don't happen in the first place, or handle getting the "situation" resolved once the problem is detected. The old adage that you can't always judge a book by it's cover, is definitely true in the property management business. Having said that, the vast majority of tenants do not cause extremely bad situations.

You will be in the landlording BUSINESS!:
We always suggest to every owner to keep your mortgage payments paid a MINIMUM of one month in advance. What are you going to do when you don't get that rent check you were expecting to pay your mortgage payment with. Instead of worrying, fretting, and getting upset that the tenant didn't pay, you can take the situation in stride because your mortgage was already paid. It's a part of doing business. There are evictions (similar to bad debt expense in other businesses) when tenants don't pay. You need to be able to continue to operate your business (rental) when this happens.... you need to expect it and prepare for it.

Always prepare for the worst!:
You should also keep funds set aside to make a multitude of repairs that may take place after a tenant moves out. Most of the time the repairs will cost less than the amount of time the property/unit is left vacant. If you don't have funds immediately available to get your rental back on its feet, your just costing yourself even more money in lost revenue due to the extra vacancy time. And guess what, you'll still have to do the repairs. Being able to get the repairs done quickly is vital to giving you the best chance for as high a return as possible on your investment.

Basically you should plan and prepare for the worst... hopefully, it will never happen to you.