Your attitude will make or break you in the investing world. Are you buying your first rental? So, are you after cash flow or long term equity? Either way, if your attitude is wrong going in, you will be angry, upset, disappointed and, ultimately, you will quit!
Many so-called “investors” purchase, inherit or otherwise gain their first piece of real estate with the idea that they will be able to continue on their merry way through life and that, somehow, at some point, they will cash in on their “investment” for tens of thousands of dollars. Unfortunately it is an attitude like this that causes most first timers to crash and burn, hate the business and run away discouraged, injured and, in many cases, broke. To find these individuals all you have to do is look at the Schenectady, Albany, or Troy, NY real estate markets, or any city today, and talk to nearly every investor that is trying to sell a rental property.
We are not in a market that is conducive to selling investment property so nearly every one that is on the market is from a disgruntled land lord.
So what attitude works? When you buy a rental property you are starting a business! You must expect to invest your time, talent and financial resources in that business in order to reap the reward of long term equity appreciation and, if you are really good, short term cash flow in the mean time. If you have a vacancy, it represents 100% of your profit. Unlike many businesses that can limp along with a weak month and meet expenses, when you have a vacant unit in a two family home you are losing 50% of your revenue. No matter what business you are in, that is a substantial hit. Yet I see time and time again when a new investor has a vacant unit it sits for months until enough weekends have accumulated to finally get the unit turned around. No one can be successful with that kind of revenue loss, but for some reason, it is acceptable if you are a land lord?!!
Take my advice; if you are considering buying a piece of rental real estate treat it like you would treat a full blown business. If you are not prepared to do that, then leave it alone! This is NOT a passive investment, it is WORK.
Connect with the right Real Estate Broker and the right Mortage Broker to get ALL the information you need to make good choices!
The rewards are amazing, but it takes the right attitude to succeed!
