least learn to fake it). Interacting with tenants is probably the most significant difference you’ll encoun- ter when you become a landlord. Keeping the property occupied is a critical function of your operation. If you don’t have tenants, you’re losing money. You need to anticipate move outs (tenants don’t always give you proper notice), and you need ample time to market, make-ready, and rent the property. Conversely, you may be forced to evict tenants on occasion. This is never an easy thing to do, but you have to be ready to step in if your tenant’s occupancy jeopardizes your investment. Falling far behind on rent or allowing the property to fall into disrepair both cost you money. Not only do you lose money if you don’t have renters, but the longer your rental property sits vacant, the greater the chance that problems could occur. Unused plumbing and other systems in the home can begin to degrade, and if a pipe bursts, there is no one there to report it to you in a timely manner. But a vacant property can also become a target. Occasionally, properties are vandal- ized, but in some areas, the more distressing scenario is that your property may become an attractive habitation for squatters. It may seem like a random concern, but we’ve had to deal with it on many different oc- casions. Unauthorized occupants, or what I’ve heard referred to as “Prop- erty Pirates,” can cause any num- ber of problems and cost you loads

to change direction. A down economy may decrease demand from home buyers, but people still need a place to live in any economic environment. So, the logical strategy was to shift from selling properties to renting them. That way, our investments could still flow in cash rather than sit idle and lose money. If you aren’t taking advantage of the strong housing market to build your portfolio of rental properties, you’re leaving yourself wide open to failure. The robust housing market in many areas of the country right now is a blessing for savvy forward-look- ing real estate investors. You should resist the urge to go from one flip to the next without building your real estate portfolio. The wise strategy is to flip a couple of properties then

renovate the third with the goal of holding it as a rental, so you have regular income in the event that there’s downward pressure on the housing market. The concept makes a lot of sense — build an income-generating portfolio to sustain you during the lean times. But, being a real estate investor doesn’t so neatly equate to being a property manager, so mind the gap! Completing a renovation or construction project is one thing, but managing properties is a complete- ly different beast. Being a property manager requires a different skillset than home construction and reno- vation and comes with its own set of unique problems. If you aren’t a people person, you’ll need to become one quickly (or at

> Continued on :: PG 80

Chris Ragland, Chief Operating Officer of Noble Capital, spearheads the expansion of existing and new business lines for the company. For nearly 20 years, he

has built firms that specialize in loan servicing, loss mitigation, full-service brokerage, insurance, management, maintenance, rehabilitation, construction, and REO disposition. Chris is a successful serial business entrepreneur and investor.

thinkrealty . com / hnr | 29

Made with FlippingBook Online newsletter