Real estate investor Oliver Limcangco is finally living the dream after achieving financial freedom through his property portfolio. In a new regular posting, the 31-year old shares his insights into how he acquired 26 doors and manages it all while travelling abroad.
How’s your morning been? It’s 10.30am and I’m going through my list: I have a tenant move-in for an Edmonton townhouse, two leases that are renewing at end of the month, two tenant move-ins in Calgary, one vacant suite in Calgary after a former tenant was evicted, three windows that need to be replaced, and a suite for which the floors need to be renovated due to flooding. Sounds like a handful, right?
Many people give up managing rental units after one suite, however, we seem to be able to hand close to 30…and still travel the world. How?
1. Tenant Selection. This is the most important part of the process. While most people put in the first application that comes in the door, we spend most of our effort ensuing we find the right tenant for our property. Why would I trust my asset worth hundreds of thousands of dollars to just the first application? It is less expensive to leave your suite vacant for one month than to kick out a crappy tenant for months while they destroy your property.
2. Property Management. Yes, you’ve got a property manager and you can leave all your worries with them right? Absolutely not! Remember, they have hundreds, sometimes even thousands of doors to look after. It is your job to make sure that yours are taken care of better than anyone else’s.
3. Tenant requests for repaid. If you want great tenants, you need to provide them with great rental suites. However, you can’t just give them blank cheques. Make sure that every repair / renovation that is over $500 needs to be approved by yourself before it can go ahead.
4. Fast Decisions. Your property manager is one of your greatest resource and they will do most of the dirty work. However, they will need to get your decisions once in a while – make sure that they get this as soon as possible. As an investor, it is your responsibility to enable your team to do their best and your PM can’t do a lot of things without decisions from you.
TIP: It’s always a give and take. They may make decisions that may not be the best once in a while – during these times, do not be emotional and take it rationally. How much did it really cost you? If it isn’t that much, don’t sweat the small stuff! It is way better to have a great relationship with your team than to save that $50 from something that they missed.
Remember, investing in real estate is not passive. It’s like a baby that needs constant attention and you need to tend to its needs right away. Build your team, implement your systems, and make fast & rational decisions – and watch your investments grow (even if you are traveling the world).