I am a runner. For the last 12 years or so running has been a big part of my personal life. I have trained over a dozen people for 5K, 10K, Half and Full Marathons through Team in Training programs or to simply share my passion with interested co-workers or friends. I can’t tell you the number of times folks have approached me for advice on running and start with the statement “Well, I’m not a REAL runner yet, but can you help me with (form, shoes, speed, pace, etc.)?” I have often found myself saying“What do you mean you aren’t a REAL runner? I see you running all the time!” Their answers are always along the lines of “well...I’ve only done 5Ks” or “I am very slow” or “I haven’t done a marathon yet.” Here is how I see it...your distance, pace or number of completed paid events do not define you as a runner. If you consciously and consistently get up and put on workout clothes and go for a walk/jog/run 3+ times a week, whether it is because you are bored or to improve your health or to keep you sane...then you ARE a runner.
I hear the same deflections from new real estate investors. “But I’m not a REAL real estate investor; I only own one rental.” Like runners, real estate investors come in all shapes and sizes. Whether you have one property or 1000 properties, if you own a home and someone else pays you to live in it, then you ARE a real estate investor. So how do you shift your mindset to stop thinking like a landlord and start thinking like areal estate investor?
Do your homework. Many people find themselves being landlords either after moving from a starter condo/house into a larger home or after inheriting property from their parents or grandparents. They do little to educate themselves on being a landlord before just jumping in. If this describes you then I encourage you to pause and take some time to learn how to transition from being a landlord to being a successful real estate investor. If you like to read, there are many books that can educate you and help get you in the right mindset. Some of my favorites are: Rich Dad, Poor Dad (Robert Kiyosaki, 1997), The Book on Rental Property Investing (Brandon Turner, 2015) and The Beginner’s Guide to Real Estate Investing (Gary Eldred, 2008). If reading isn’t your thing, try a Podcast. Podcasts are free and there are a lot of great ones out there: Real Estate Rookie, The Bigger Pockets Real Estate Podcast and Lifetime CashFlow through Real Estate Investing. The key to doing your homework is to gain some knowledge on how real estate investing is about more than just being a landlord.
Define your goal. Do you want to have only one rental property, or do you want to have enough properties you can quit your day job? If you do want to grow your real estate portfolio, are you going to focus on single family properties? Multifamily properties? Maybe you want to invest in a vacation property you can use for short term rentals when your family isn’t using it. Just like there are many different distance options for runners, there are many different investment strategies for real estate investors. Your goal is up to you, but now is a great time to give it some thought and define your long- and short-term goals.
Figure out your strengths. Some runners are great at short distances because they are fast, and some find their groove by running endurance events where they sustain a steady pace throughout. It’s the same in real estate investing. Some people are GREAT at finding investment properties. Some investors are natural networkers and are really good at finding hard money investors to help them build their portfolios. Others excel at rehabbing on a budget to get the maximum return on their investment, and some people find they enjoy managing the rentals once they are ready for tenants. (This is me...I enjoy the day-to-day management of the properties!) You may not find your niche until you are well into buying and/or managing your first or fifth property. When you do find it, though, stick to your strengths and hire out the things you do not enjoy or areas where you do not excel.
Develop and implement your strategy. Most people cannot go out and run a marathon without completing a training plan. Similarly, most real estate investors cannot grow their portfolios and quit their W2 jobs without crafting a real estate investment strategy. Take all the information you gained in doing your homework, defining your goals, and figuring out your strengths, then use it to craft your own tailored real estate investment strategy. Maybe you do not even have your first property yet and your strategy starts with making your first real estate purchase this year; then maybe you decide to add one property per year to your portfolio for the next 10 years. There is no right or wrong strategy. Develop one that works for you.
Regardless of how you came to own your first rental property, stop downplaying your accomplishment by thinking “But I’m not a REAL real estate investor; I’m just a landlord.” If you own a rental property, then you, my friend, ARE a real estate investor! Now, here is the exciting part: What’s the next step in your investment strategy?