When it comes to the world of investing (or most other things) there are always tales of “conventional wisdom” I don’t have a problem necessarily with conventional wisdom really – but I do think it needs to be questioned much more than we do.

Also conventional wisdom tells you that property ownership – especially apartments – is very time consuming, stressful, heavy management and a huge pain in dealing with people and all their stories and troubles and don’t even get me going on the evictions and unpaid or lost rent. For active hands on owners this may be the case but for most of us that are NOT doing the day to day managing this is not the case. We are active owners without being actively involved in the stress of management. My partners never talk to tenants and I do only on my inspections. I will admit in the early years when I WAS doing everything it was nuts (boy do I have stories) and just when I thought I had seen it all – well another doozy would appear.

One thing to always keep in mind is that there are Landlords and there are Investors. Both own the real estate but that is where the similarity ends. A Landlord is typically fixing toilets, faucets, sinks, changing lightbulbs, showing and renting apartments, painting, cleaning, etc. You get the picture. Most of the Landlord’s time is spent on working in the day to day operations of the property. An investor spends their time on one thing – the numbers. The investor spends their time working on raising property rents, working on reducing property expenses, in other words making the property as profitable as possible. This is being done by the investor constantly. In other words the investor works ON the property.

Folks let me tell you, the money is freeing up your time so you can spend as much time working ON the property NOT in it! The money is not in being able to do a good job fixing a faucet – its in being able to increase your cash flow by $2,500 this year! That’s where the money is!

Conventional wisdom would tell you that you should be a Landlord! No problem – BUT – make sure you get to INVESTOR status as soon as you can and frankly, if you can make this decision right out of the blocks its probably best and really should be your first decision before even going into an apartment or commercial property – do I want to be a hands on Landlord / Manager – or not? No wrong answer here but how a Landlord and how an Investor spend their time is crucial to how fast a projects cash flow and value will increase.

I do often recommend to people that it may not hurt them to be a Landlord/Manager for 6 – 12 months so you are familiar with how everything goes, that way you know what you are looking at or listening too when talking to your management folks or looking at a management report – you know what to look for and what to question. This is for folks that want a large portion of their net worth into real estate. Then I recommend eventually “graduating” to investor. If real estate is not going to be a big part of your net worth and just one of your investments then I recommend skipping the Landlord / Manager track altogether and going straight to investor.

Bottom line is in order to be really profitable and successful as an apartment property owner you don’t need to spend any time being a Landlord – it doesn’t hurt but it is actually more profitable NOT to..

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