We have a good relationship with our property management company, but when my cell phone rang at 10:15am on Sunday morning and I looked down and saw their name on the caller id, I have to admit, my heart sank.
“Ugh.” was my initial reaction. Nothing good can come of this.
We were 200 miles from home. We were just about to leave my parents house to attend the 5th birthday party for our twin nephews. We did not, under any circumstance, want to have to drop what we were doing to deal with one of our properties.
I answered the phone.
I listened to our manager tell me that the tenant who had just moved into our second property was reporting water and sewage back-up in the basement.
She asked if I wanted her to contact her plumber or call one of my own.
I said, “Please call yours.”
She said, “No problem, I’m on it. Have a good morning.”
I hung up the phone.
And then I thanked the Heavens above for property managers.
As the day went on, the importance of what had just happened sank in.
From the very beginning, we factor in the ability to pay for someone else to 100% manage our property – leasing, maintenance requests, rent payments – before even looking at a property.
Let me say that again, in a slightly different way: We won’t even look at a property, let alone offer to purchase it, if the numbers don’t support a healthy cashflow *on top of* the costs of a property manager.
This all goes back to our core purpose in even having rental properties in the first place: residual income. Creating an asset that will pay us back with minimal involvement.
Managing the property and having the responsibility and the ties to worrying about it is NOT part of that equation.
Also, this has to do with emotion. I want to talk more about this in a later post, but the short version is that if you let your emotion get in the way, you put your core purpose at risk. If we really wanted to purchase a rental property just for the sake of having one, because we were excited to own an additional home or to say that we had a rental, how likely are we to stick to our defined qualifications and our initial intentions?
Answer: not very likely.
When we purchased both of our properties, we stuck to the facts, to our specific qualifications. Does this property fit? If not, it’s not an option. I don’t care how perfect the location is or how cute the kitchen remodel is or how much I love the back yard. Facts are facts. It fits or it doesn’t.
Sticking to the facts and being patient, waiting for a property to meet them versus adjusting our qualifications to meet the property, ensures that you get what you want.
What we wanted? Someone else to take care of things when a tenant called and reported that water and sewage were backing up into the basement.
And that’s just what they did.
What we wanted? A passive, cashflowing property.
And that’s just what we got. And that’s exactly what I’d recommend you shoot for, too.
Your twin nephews will be very grateful when you do.