Real Estate Investing – Use Property Management
When it comes to real estate investing most investors make mistakes as they work to build up their portfolio. Hopefully we learn from those mistakes as we move from one deal to another so that we can become better and our deals (hopefully) get easier. As a real estate investor I am certainly no exception to this. Last month I shared a post on real estate investing and rehabs and a costly mistake I made with my general contractor.
Today I’d like to share a mistake that I’ve made more than once when it comes to rentals and why I’m a big advocate of property management now. I’m a huge fan of rentals that cash flow. They can (and should) be the least work of any type of real estate investing. When you couple real estate timing with holding properties as rentals it is certainly the best way to make money in real estate.
The biggest drawback with rentals is that you actually have to have tenants in the properties 
Now don’t get me wrong, there are a lot of good tenants out there. But there are also some professional bad tenants out there who have radar for “suckers for a good story,” like myself. These professional tenants just seem to know what rentals to apply for where the owner is gullible enough to buy their lame excuses about why they can’t pay the rent.
I had one such tenant in a fairly upper end home that managed to come up with story after story after story. Mostly because I seemed inclined to listen to them! I didn’t finally evict them until they owed me 6 months of past due rent! They bounced 2 checks during that time, made numerous promises and delivered on none of them and finally trashed the house. Then to top it all off, this tenant was arrested for assaulting his wife and he had the unbelievable gall to have his attorney subpoena me to testify on his behalf as a character witness!!! Needless to say when the attorney heard what I had to say about the character of his client he released me from the summons without testifying.
You know what the worst part of this whole story is? These were not the first tenants I had to evict. I’d heard the sob stories before from other tenants. My wife tells me I’m too softhearted, which is certainly true. But I think more importantly I’m too gullible to be a property manager.
But real estate investing is about learning lessons. I’ll tell you this, I still love rentals! I love real estate timing and cash flowing rentals as my favorite investing strategy. So what did I learn from all of this? That I can’t manage tenants! Oh sure, if I kept doing it over and over and over again I would eventually get better but the simple fact of the matter is that I don’t like dealing with tenants. It’s too much work, too much headache and simply not worth it. I will never self-manage a rental property again. I will always use property management to handle rentals for me.