What Does it Take?

I’ve owned and managed my own rentals for 17 years now, manage other properties, have written a book about the business, recently got my realtor’s license, and am going to be getting my broker’s license soon.  I’m frequently asked, “What does it take to be a property manager?  What personality traits are essential?”

I’d never thought about it but here’s the short list:

  • You must be very organized.  There are records to keep, tenants to manage, etc.
  • You must be laid back.  Things happen that are beyond your control and you have to roll with it.  (Hmmm … organized and laid back?  Those qualities don’t appear very often in one individual.  Most laid back people aren’t organized.  Most organized people aren’t laid back.)
  • You have to be willing to evict people quickly when they get behind in their rent payments.  This is an income-producing business, and although tenants run into rough situations, you can’t let your heart rule your head.  You can’t just hope they’ll get caught up next week, or next month.

Tenant management issues are the main thing that drive people out of this business.  I’ve learned — the hard way — to stick with my lease agreement.  I’ve modified it through the years and it’s short but air-tight.  It protects me from all of the “sticky” situations that can pop up, and I know that if I adhere to it, I’ll be okay.

So for those who are considering buying their first rental, my advice is to educate yourself before jumping in.  Look at your finances, your personality, your risk tolerance.  And if you’re still excited about the possibilities, go for it, and enjoy the journey!

Multi-family Construction Leading the Way

New housing starts have been flat for years now, but one sector is leading the pack and growing by leaps and bounds — the multi-family market.  This includes buildings that house at least two units.  Foreclosures have driven people into rentals, whether they be apartment buildings, duplexes or single family homes.

According to the Wall Street Journal, multi-family construction starts in November increased by over 25%, while single family starts limped along at just over 2%. Here’s the link to the article: http://online.wsj.com/article/SB10001424052970204791104577110204041040514.html:

We’re still not seeing healthy growth in the housing market, as foreclosure looms over thousands of homeowners and job security is an issue throughout the country.  Economists aren’t predicting an upswing in the housing market until mid-2013.  (Yikes!)

Even so, the Commerce Department states that compared to a year ago, housing starts rose in three out of four regions in the US, led by the Northeast.  Only one region had a decline in starts — the Midwest.  Well, Indianapolis is right in the middle of it (sigh) so I guess the good news for us investors is that rental demand/occupancy is up and this situation is likely to continue for some time.

As I’ve said many times, now is the time to buy rental property . . . single family, duplex, small apartment building . . . there’s a lot of opportunity out there for the smart investor.  And the time is now!   🙂