08 Jan Making the Switch from Landlord to Real Estate Investor
We can all probably think about someone who has made an impact in our life whether they are a teacher, parent, supervisor, etc. We can learn so much from our mentors, especially when they have already gone through many of the life experiences we face. I am fortunate to have a mentor who has taught me a lot about owning, investing and managing property. His name is Scott Taylor.
Scott published what is probably the best guide to owning and managing investment property, The Fifteen Minute Landlord. For my money, it is well worth the modest cost for any would-be real estate investor who has rental property in his/her portfolio. Please visit his website at www.tfmll.com for more information as well as to purchase a copy for yourself.
For this blog post, I’m going summarize one of the topics covered in The Fifteen Minute Landlord. The concepts are universal.
Real estate investors generally own property as part of an overall investment strategy. Most have full time jobs and careers and want to balance their portfolio for risk/return. Real estate has an element of both, although generally in the long term the bias is in the return column.
The RE investor is more focused on looking at the value of the asset, a balance sheet emphasis. Equity build-up through debt reduction and appreciation are a much more useful metric to the investor. The investor makes sure his real estate is well capitalized so that operations and long term maintenance are done when they need to be rather than when cash flow allows.
Real estate landlords are focused more on operations and cash flow and by necessity requires a more hands-on approach. The landlord looks at the income statement as the main barometer of performance. Cash flow to the landlord is King; and sometimes represents a significant portion of the landlord’s monthly income stream. The landlord treats the investment like a second job working nights and weekends to ensure the property is being maintained and the tenants concerns are addressed; it is a 24/7 commitment.
At MLM professional property management is our ONLY business. If you are tired of the stress and frustration of riding the fence between landlord and investor, we can help. Let us show you how you can move from landlord to investor and help you grow your investment portfolio. Please give us a call at (310) 220-4495 or visit our website to learn more about Metro Property Services! We are always happy to consult, free of charge to offer you advice about how to proceed with your home or property.