Naturally, we are approached by many people who want to buy a rental home, 4-plex or small apartment complex. Some are seasoned investors and others are new to the business. I say business because that’s what it should be.
We like to interview potential new investors to get a sense of them. Ron has a simple scenario he likes to pose:
Your tenant is a single mom with two kids and a husband who has just left her. She comes to you with her story asking if she can have an extra couple of weeks to get the rent together. What would you do?
- Tell her its okay and you’ll work with her until she is on her feet again.
- Tell her to contact friends and family to get the money for her rent and advise her you will begin eviction proceedings if the rent is late.
Many people say they would work with her and some say they would evict her if the rent was late. Either answer is real, yet a true investor would seldom, if ever, let the rent go unpaid without initiating an eviction.
The business of real estate investment is not always fun. tough decisions have to be made. If you can’t make them, in your favor, we caution that you have a very good chance of losing thousands of dollars if not the home itself.
There is another choice though. You can hire a property manager whose job it is to make the tough calls. In addition, they can talk on the day-to-day duties including scheduling repairs, collecting rent and finding new tenants as needed. You’ll find more about this in our article on Property Management.
