Years ago, long before I had my first bank account, I heard the adults around me talking about fascinating things like “landlords” and “rentals.” I remember picturing an odd feudalism with glittering royals swanning into people’s houses while the residents bowed and presented them with freshly baked goods and their best silks. As I got older, I learned the reality—most of the working professionals I knew didn’t own their homes, they rented a property from someone else. I got in a bit of trouble once when I asked my mother’s friend why she didn’t simply buy a house. “It seems smarter than renting. To me, anyway,” I told her, my teenage brain certain this was the right thing to say at a friendly gathering. She briskly walked away, leaving me to sit alone and wonder what I’d done wrong. Sure, the comment was blunt, but even today I stand by it. Wouldn’t you rather be the person receiving rent payments from tenants than scrambling to pay a property owner? Even in my younger years, I knew I didn’t want to be the one reliant on anyone else to keep my bank account full. I wanted to be the one in charge of how much I made and when, but I didn’t exactly know how to get started. Clearly, many people rented, and owning a few apartments or small houses could keep me from the drudgery of a desk job. I asked around to see if anyone could help me better understand how a young man like myself could get started on investing in properties, but I hit a wall almost instantly. I found myself swimming through a bog of information and emerging muddy and exhausted any time I tried to get a clear answer. Books kept me from buying because they threw around too many technical terms and left me intimidated. Every author seemed to assume I came from a background in property ownership. No one tackled the topic on a beginner’s level. So I switched gears and started asking friends and family for advice on getting started. To my shock, everyone seemed to think he or she was a consummate expert on purchasing properties or renting them. But whenever I asked, “So, you own some properties available for rent?” they would blink in surprise and negate all their previous comments with a simple, “Oh, I don’t own any property.” All of this kept me from getting started. Although I knew what I wanted to do and that I could do it well, years passed before I spent a cent on a property. The sense that I wasn’t ready, that some piece of information was out of my reach and, therefore, I couldn’t possibly take the plunge and bid on a condo or house, was impossible to shake. I’d pass “For Sale” signs and feel a little jump in my chest. My entrepreneur self would cry out, “Hey! There’s a cute spot! I bet lots of people want to rent there!” But then my doubt crept up. “But you’re not an expert! Your renters will expect you to know all the things you don’t know, and you don’t know what you don’t know, so you can’t possibly educate yourself! It’s a trap!” Tired of this push and pull, I finally went for it. I found a little place near to where I lived and offered a down payment. The place wasn’t pretty—it was a small, two-bedroom home that needed some fixing up, but that added up to a low price that I could afford. At last, I had a place I could make a home for my first tenet. Sure, I felt terrified, but I bet on myself. I was going to make this happen. To my complete shock, buying and managing a property was much easier than I realized. After some initial clean-up, a fresh coat of paint, and a once-over by a couple of handypersons, the place went up for rent and got a resident almost immediately. My tenant paid me his first month’s rent and deposit in cash and went inside his house. I stood there holding the money and felt as though I could see for the first time in my life. What on Earth was I so afraid of that it took me that long to just buy a place and rent it? Why didn’t I do this years ago? I could have had several properties by then if I’d just trusted my instincts! I decided right there to do something for other would-be owners. I wanted to let people know the basics and how to get started, not hit them with a bunch of tax codes and legal jargon (all that can come later). Instead, I wanted to share my story and help others like me to go for it and buy the dang place! That was five years ago. Today, I have several properties that I manage and that help me stay in financial shape. I cannot believe how intimidated people are when it comes to buying a new place to set up a rental, an Airbnb, or some offices that can easily earn you money. This book is my chance to give something back and walk my fellow property-lovers through finding, buying, and renting a place to make a profit. I’m so excited to share my passion with you and hope that you’ll gain as much as I did from your new business ventures. I don’t want to wait any longer and neither should you. Let’s get started!
Let me start by saying no, this is not a get-rich-quick scheme. Anyone who insists you can make a fortune in an exceptionally short amount of time is definitely scamming you. Rather, this is something that will require work in the short run and then benefit you in the long run. I have some guesses how you make your money right now. You work from 9 a.m. to 5 p.m. for someone else, maybe yourself, and your job takes up a lot of time. You have the money for your first property, but every time you search for useful information on buying and renting a place, you get overloaded with information. You want to find some passive income and make a sound investment, but all of these feel unattainable. Trying to learn about rentals from day one is like taking a 12th-grade algebra test in the 3rd grade. It’s too much, and it’s not how we learn. I want to get you through the basics and help you take one baby step at a time toward your first rental property. I want you to make mistakes and find your way out of them so you can see your path to an endpoint—one with you as a landlord. Let’s start with one major question: why should you invest in property? Why Real Estate? Ask anyone who works in finance, taxes, or wealth planning and they’ll tell you the same thing: real estate is the best way to produce a consistent, passive income and hold down a steady job. Think about that for a moment. You don’t have to quit your job if you feel it’s necessary to hang onto it for security or health insurance (or because you like it). Yet, you can add a secondary income for yourself by buying and managing a property. Property management doesn’t require the same number of hours as teaching or designing. It’s something you can do any time of the day. That also means you can continue earning money doing what you already know and feel comfortable about while you earn rent money from your tenant. Sounds good, right? It should. Real estate is a fantastic way to make your money work for you and keep your bank account in good shape. Another reason to enter real estate is the tax breaks. Any expense you cover for your property—a visit from a plumber, a re-plastered wall, a can of paint—can all be deducted from your taxes. A lot of states also offer a tax break for property owners to help you keep an improvement budget so your property doesn’t become dilapidated over the years. You want it to appreciate in value. Appreciation of property simply means that houses get more valuable. Have you ever visited an older house that went on the market and allowed potential buyers to walk through? A well-preserved home becomes more beautiful over the years and attracts more attention than a brand new, never lived-in space (though that can be nice, too).