Hey, today so what we’re gonna talk about is how people fail at being a landlord, and I know a lot of people talk about what the successes are, and I think it’s important to always focus on success. But I think it’s also good to understand what can cause you to fail as a landlord, because I think that can be very important.
You know, if you give enough deals out there, you will find a good deal. But to get the return out of that property for the next 20 years is making sure that you’re successful; and a lot of people focus on just the acquisition, and they don’t focus on what it takes to do the same thing over and over again to be successful, to get the return out of that investment properties.
You don’t run it like a business
One of the first things I would say why a lot of investors have trouble and why a lot of investors fail is they don’t run it like a business. They don’t have policies. They don’t have procedures. They don’t have structure, and they kind of do things on a whim, and they do things off their gut feeling, and I think that’s wrong when you’re running a business. If you hired somebody, and that person was telling you that they were doing things with no structure, no policy or procedure with, you know, your several hundred-thousand-dollar business; you probably would not be very happy, and you’d probably fire them. But when people work for themselves, meaning they are landlords, they think it’s okay to run it that way. So I think the first thing is they fail because they don’t run it like a business.
I think the second thing is, because they own a property, they’re very emotionally tied to it, and they make decisions based on emotions, and they do not make decisions based on sound business model decisions. So I would say do not become emotionally attached to the deal. It’s a deal because it makes sense financially, not because of emotionally.
Not sticking to your plan
And I would say lastly is they don’t stick to their plan. A lot of people will buy an investment property, and they kind of come up on another tangent or another reason why it would make sense, and it doesn’t match their goals, but they’d twist their goals because of the deal. They’ll kind of talk themselves into why this could be a good deal and why they should buy that. I know because I did that with many deals that I bought, and most of the time, they turned out to be not good deals. Maybe it became a good deal, but it wasn’t because of me. Maybe it was a good area and it appreciated well or I happen to get a good tenant, but the reality was I got very lucky on a lot of deals, and I was unlucky on many deals because of the fact that I did not have a plan. I didn’t stick to my structure, and I didn’t have a goal, and I didn’t make sure that the properties I was buying matched the goal.
So, again, it’s very easy to succeed, but it’s also very easy to fail in this industry; and you wanna make sure you are doing things to make sure you’re not setting yourself up for failure. So this is Steve Rozenberg with Empire Property Management. If you’d like to know more, go to our website www.empireindustriesllc.com. Thank you.