Learning to be a landlord
Interesting article from Saturday’s Wall St Journal, and incredibly on-topic for the Real Estate Genius site! In Learning To Be a Landlord, Jeff Opdyke covers the pros and cons of getting into the landlording business by talking to a number of novice property investors. Some of the challenges faced by the investors he spoke with included:
- repairs taking much longer than expected, leaving properties unrentable in the meantime
- overpaying for the property, meaning the landlord could never get to positive cash flow
- the problem tenant, full of daily complaints
- underbudgeting for repairs
- the dreaded Christmas Eve “my toilet is broken” phone call
Opdyke speaks with an expert who points out that “You’re buying an income stream, not a pretty house”. And that pretty much nails it right there– it’s all about the cash flow!!!
You’ve got to have a good sense that the cash flow will work in your favor right upfront. That’s why you should always run the numbers with a real estate cash flow analyzer. It might only take a few minutes and cost you a few bucks, but it could save you from getting into a bad deal.
