Top 6 Tips for New Real Estate Investors📈 | LEARN FROM MY MISTAKES❗❗❗

What’s up, everybody? So here’s the thing. Experienced real estate investors are experienced because they’ve lived through it. The good and the bad. Right. But why attend the school of hard knocks if you could just learn from someone else’s mistakes? I have learned that it’s so much easier to have a bridge rather than just beat your head against the wall until the lesson gets through. So that’s what I’m here to give you everything that I got and help you learn from my mistakes so you don’t have to stress out making the same one. So I’m Jonathan Beasley, and I have six, not so obvious, landlord lessons that I learned personally. And it starts now.

And one of my very first tenants that Rachel and I actually interviewed ourselves and selected, I think was like our second or third tenant turned out that his income source was, let’s just say not so above board, if you know what I mean. But even if you’re prospective resident isn’t a drug dealer, what happens when all their upfront rent is gone?

So they give you six months of rent? What happens at month seven? So there’s a good possibility that all the rest of the money will be gone too. And now you’re going to be chasing a tenant who can’t afford your rent. Now, there’s been other cases where we’ve collected rent upfront that had legitimate reasons for it. We’ve had traveling professionals that just got a large bonus or a housing stipend, and they just wanted to pay for their whole trip, all 90 days or six, six months of it upfront. In those cases, as long as you can actually legitimize and track the money and why they’re doing it, it can be a good thing, but don’t necessarily assume that it is a good thing unless you actually can confirm where the money’s coming from and why they want to pay upfront.

But they’re pretty slick. So one of them is when you’re leaving the unit, after you’ve done the walkthrough, walk them out to their car and take a peek inside the car. Chances are the way the car looks is the way that your rental unit is going to look. So if it’s full of garbage and full to the brim with crap, that’s exactly how your property is going to look once they’ve moved in. Another tenant hack. Don’t ask them if they have animals, ask them how many animals they have, right? Because if you just ask them, do they have an animal, they’re probably going to say no, and you’re going to be chasing them down six months later for the pet fees that you should have collected because now their Saint Bernard is destroy the entire unit.

You have to redo carpet and flooring and painting. I’ve seen it a thousand times and it’s not fun. So don’t buy the idea either that people have animals but they’re not going to let the animal live with them because that’s B.S. as well. Those animals are only going someplace else until they move in to your rental and then bingo is coming home to stay-o. You know what I mean?

And you would be surprised at how many people actually agree to do this. What happens then is the scammer collects the rent, they collect the deposit and then ditch. And so now you have someone living in your unit that thinks they’ve already paid their deposit in their first rent. So now what happens is you have a renter in your unit that’s already paid a deposit and first month’s rent and they’re staying in your place. So how do you keep somebody from stealing your listing? You could use a watermark with your images and your phone number and your contact information. That’s definitely going to make it much more difficult for someone to scam you because they’re not going to waste their time trying to erase the watermarks and the information from an image. They’ll probably just go out and find another listing that isn’t watermark and scam those people, which that isn’t great, but at least you didn’t get scammed. Another tip is never publish the actual address of your home, publish nearest cross streets or other landmarks that are local, and then you can engage with the tenant once you get a feel for them.

There are plenty of instances that landlord tenant laws don’t cover as well, such as smoking or pets like we talked about, parking, painting the interior of the home. Can the tenant paint the interior of the home? What happens if they don’t keep the place clean? We actually just ran into this where somebody was just keeping a terrible, terribly unclean, unsanitary rental, and we got in because we had to do a repair. And so now we’re walking through what exactly the lease says about that. So and what’s more, is if they don’t keep it clean and there’s bugs, who’s responsible for the exterminator fees? So the list goes on and on, and you want to make sure that your tenant knows exactly what’s in the lease and they abide by it. So in order for them to do that, it has to be in your lease in the first place. So once you have a nice long lease attorney approved lease, make sure you sit down, read through it at least a couple of times, actually make sure you understand everything is in it. And then once it’s time to present it to your tenant, make sure you read it to them as well. If it matters to you that they abide by the things that you’ve paid the attorney to write into the lease, I suggest you read it to them and put a line under every paragraph and have them initial it and even highlight the portions that are most important to you. You know, it’s a reality that human nature, we all have selective memory. It’s just part of the human condition. So being as thorough as you can with your lease will go a long way in making sure that your tenants abide by the things you both agree to.

Which brings me to number six record keeping, but record keeping as it relates to repairs, repair requests, rental ledgers, deposits and that sort of thing. If you screen properly, let me give you some encouragement. If you screen properly, most of your tenants are going to be really cool, folks. They’re going to pay on time and it’ll be smooth sailing and good communication. But just to make sure you need some place to track your deposits and your rent ledgers whether it’s an old school notebook, whether it’s a spreadsheet, I got some buddies that just love a good spreadsheet. I hate it. We’ve chosen a cloud based software program that tracks each and every payment and each and every communication. So you want to track whether they’ve made a repair request. You want to mark that down and make sure you mark it when it’s completed. Why? Because you want to be able to prove that you’ve kept good records, and if it’s ever in question, you can prove it. Anything that goes on between you and your tenant needs to be documented, no matter how small.