3 Industry Secrets to Making REAL Passive Income as a Landlord

We are addressing a topic that is near and dear to our heart, which is passive income and profit for you landlords out there, which is the another, and the other way about talking about this new concept that we want to drop on. You call mail box. Now, a lot of people, if you Google the term mailbox money, you’re going to find a lot of reference to the stock market. The term mailbox money comes from the idea that you can be sitting anywhere,whether it’s in your new recording studio or in that landlord dream, what was That? What’s that Mr. Post office, I’ve got a letter. Hold on. I’ll be right back. No, and in our new house, the way we have to get our letters is we have to go to the thing where all the other people get and you have to use your little key, and then sometimes you get packages and the other little thing, Anyway, you get your money. The, the, the bottom Line is, is that mailbox money is when checks just show up in your mail on a regular basis. And that is sort of the base on the foundation of being a landlord. Like that’s the reason why people get into this game is that they want to make money passively.

So when we pull landlords, when we pull, whether it’s our property management clients, DIY, landlords, or newbie investors looking to get started, when we pull landlords and say, why are you in this business? Why are you getting into this business? The number one answer is retirement. It’s like, you want a plan. You want an asset that, you know, you own that you have that appreciates while you ideally do whatever it is you want to do in the background On your own time dress, how you want to dress showing up how you want to, right? And the rental, the rental income that you get, the investment properties that you own are the key to do that. The problem is that oftentimes people get caught up in the minutia and they don’t really understand what it’s going to really take to take them from, Hey, I’ve got this great idea of earning passive money with investment properties, to being toes in the sand. As we talk about all the time on the beach, doing what you want to do, there is a gap between those two areas, but really it’s not that hard to cross the bridge over that from being not knowing to knowing everything, Right? So we’ve got three key tips that we want to give you today. Little things, big things, really, but little shifts that you can make in your mindset and your approach to owning a rental that are going to help take you from this place, which is the landlord, the landlord land of like, ah, to this place, which is the landlord, peanut colada in hand toes In the sand nail Choice. I choose her, but the wife of your choice or spouse of your choice, it’s important. You continue to clarify That you’re here by choice Debbie or by choice. It has nothing to do with shared property laws.

Is there a zero to do with that? I’m just here. So I don’t get fine. Okay. So let’s just talk about the two types of investors that we tend to run into. Now, the first type of investor is the person who is just like analyzing the numbers. They’re looking at everything like when’s the best time to gov jump into the market. Where’s the best deal? How could I maximize my money? And they think, and they think, and they think, and they think, and they take zero action. They have analysis paralysis and they’re not doing anything. And this is the type of investor that’s like, man, I just, I just wish I jumped in five years ago when I started talking about jumping in five years Ago. Right. And what we find with this type of event, this type of investor, or would be investor, is that they they’re stuck in this analysis paralysis. And it doesn’t have to be that hard. And we’ve spoken at length on this topic before. So you can ping us if you want to link to any of our past videos on this topic. Cause that’s not what we’re talking about today, but we do want to address this type of landlord or would be landlord who gets stuck here and who we find is a big member of our audience here at landlord code. Cause you’re trying to educate yourself. So the three things we’re going to teach you today are actually much more important than this like analysis paralysis of trying to find like the very perfect rental.

Exactly. Well, that brings us to the other type of investor that we work with is the type of investor that generally we see more often than not. It was like, okay, I’m in the game, I’m doing all the things that I’m supposed to be doing, but I’m not really feel like I’m getting ahead. I’m not really feeling like I’m getting to bet that place I want to get to in terms of relying on my investment property for passive.Yeah. Right. And in particular for our brick and mortar business. So we also own foundation homes, property management, serving single family homes in Marin county, California. What we find from many of the investors and landlords who come to us in that company is that people have come across these rentals, whether they’ve inherited them or it’s been their primary residence that they’re turning into a rental. So they haven’t had to do this like scrimping and saving that people who are becoming an investor for the first time have, so they have not done any of this analysis. So on one hand, we’ve got over analysis. On the other hand, we’ve got like very little analysis to beyond what rent can I get? And like, what’s my mortgage. And there are problems with both type of investors, right? So there’s three strategies that will solve a lot of these problems and get you on that path to making that mail box money while we did that, we’d even be Hearst. That that’s awesome. So just because you’re here by choice by choice. So what’s the first thing. The first thing is something. If you’ve been following us, you hear us talk about very frequently.

You need to treat your rental like a business. This is a mindset shift from either. This was my house or this is, this is my investment. I’m a landlord. It’s not that hard. It is not that hard. As long as you take the time to spend the planning and to set the rental up like a business. So the tip number one is in order to treat your rental like a business, you need process. And we’re not talking about one little process we were talking about when you go through the cycle of property management, if you think it starts with let’s call it marketing or marketing and marketing, having a vacancy is the first step to qualifying the tenant or writing the lease to moving the tenant in to the actual managing of the tenant. YouWere handling maintenance requests, how you’re handling inspections. So the actual end of the lease when a tenant moves out, like I’ve always said, you’ll never be able to judge how the quality of that tendency until after the tenant moves out. So knowing the process in each one of those steps, and there’s a lot, we’ll help you help you get to that place. So if you think of there’s about 12 different steps, you can divide it up in a number of different ways. But basically our course, anyone who’s been following us, it’s not for sale right now, but we will be releasing it for sale. Again, sometime this fall TBD, our course breaks down each of these sections of the property management cycle. And we give you a process for each of these sections.

Okay. Important Thing about the process is that we take you from a place of being reactionary to like, you know, oh my gosh, this is how this is happening to me. All this stuff is happening to me with my rental, my tenants giving me problems, all these things to a place of being proactive and actually involved in your rental in real life. So that when things do come up, you know exactly what to do without thinking about it. And here’s the thing. Every single property management company out there knows that unless it’s like a one person shop and they’re just kind of winging It, which they’re brand new, they don’t know yet. Which like That was us. We did that. That was you looking at brand new people. Yeah, Yeah, yeah. But every, every seasoned property management company knows this. It’s like non-negotiable. So if you are a DIY landlord and you’re asking yourself, why am I problem? My tenants always causing me these problems, or if you’re this newbie landlord newbie investor looking to get started, and you’re worried about all these other numbers, the things you need to focus on are your processes. And they don’t need to be complicated. We’re talking one to three steps, one to 10 steps, depending on what phase it is. But you need to have a process and you need to have a plan. It’s not complicated, but it does take some time. The other thing is having Optics, right? You want to know where you are so you can determine on where you’re going. And the biggest thing about that, that you really need that I really want to drive home with here is, is that you need to be incredibly brutally honest with yourself and, and your property for where it’s at. Like you can say, oh, I’ve got a house in this really awesome neighborhood and things are going up and all that, all this,

That, but is your house updated? Is it Well cared for, have you put any money into how’s your roof? Look, those types of things. What’s your bottom. My look, how much money do you have to invest into your property knowing that? And it doesn’t matter how bad the picture is painted. If it look you can, you can always build off that to get to where you’re going. If you are not honest with yourself, then you’re not going to be able to, to write that the most predictable approach you won’t be able to prepare. Right? And you won’t be able to predict what you’re going to do next because you’re not going to be working on a false pretenses. Yeah. So specifically our tip number two for the day is to know your numbers and know your ROI.

So we developed an ROI calculator, which again, is going to be for our members. And as part of our course, and we actually use it for a lot of our clients in our property management portfolio. And we used it for our own property when we were analyzing, okay, should we be selling this home? Or should we be turning it into a rental? You need to know your numbers because just like, as if you were to invest in any other business, say you were to open up a franchise, right? You are going to know those numbers and they are going to be helping, you know, those numbersbecause they’re taking a piece of those numbers in the case of a franchise. But any business that you would be opening up, right? That’s one of the core keys to your success is knowing your numbers. So when it comes to a rental, you need to know what you expect to spend on your maintenance. And that’s when Chris was talking about things like the roof, but also there are a numbers to know averages to keep in mind about your repairs. And when you know these numbers, when you know where you’re going, as the repairs come up, they’re not so scary. It’s not like, okay, it’s another $300 for a dishwasher repair or what do we have at one of our properties? I think I saw Glen here, right? We’ve got something about a hot tub and water leaking over the edge and causing water damage. Like when you have money budgeted in for the unforeseen repairs, it doesn’t become so scary when they actually come up because you know where you’re going and you know what your end result is with your number. And that is simply true for any business. You have any rental is no different. Yeah. And the other Thing too, is that you will be able to budget for actual improvements too. So like, if you know that by adding a new vanity or new appliance, there’s a new countertops is going to cost X amount of dollars. But you know, that’s going to increase your rental by a certain percentage. You’re going to start being, you’re going to be able to figure out when it’s appropriate to make that investment. So you can start reaping the rewards of your rental. And the third thing that we’re going to be talking about too, is setting up your team. Team work makes the dream work. And no one wants to draw. I mean, the landlord business is a super lonely business, but it doesn’t have to be a solo run mission. Having a team in place is going to help you get to where you want to go, not faster, but like lightning fast, Right?

So you can do this, whether you’re hiring a property management company or whether you’re taking the DIY route, we’re not pitching necessarily either direction. When you hire a property management company, they’re essentially your team, right? They’re going to have all the vendors, they’re going to have all the context. So you don’t have to go and find them, but you are going to want people like a, a CPA who specializes in working with landlords, a, an attorney while you’re Landlord tenant attorney, that’s specialized to working with landlords. Right? And then also also someone who, you know, your landscape team, all these people inplace that you’re going to need to know we’re going to help opp make your property run Better. Yeah. So in our course, we have workshops, worksheets, not workshop. We have about those too. Yeah. We’ve got worksheets to help you tell you, who do you need to know? You need to fill in their name, have their number ready to go get their insurance information, make sure they’re licensed bonds, insured, all that good stuff. We have worksheets to help keep you on pace to do all that.

But if you’re a DIY landlord and you want to do it yourself, one of the biggest tips that we can tell you right now is to have your team set in advance again, in the theory and the theme of treating your rental, like a business. If you’re opening up a business, it’s not going to be just you. You’re going to be hiring the pros. You’re going to be hiring the people to help offset your workload, whether it’s your employees or contractors, vendors who work with you. So there’s nothing different about when you’re setting up your business as a landlord. And even if you’re Already in business and you don’t have this in place, it’s never too late to start. So don’t feel like you have to go back to the drawing board, sell your rental property, start all over and build it back up again. You can start by building out your team since it really simple. Just make, just make the first phone call and maybe even create a flow chart. Okay? So the three tips for today, again, to reiterate are number one, the first idea that you are a landlord and you need to treat your rental like a business to do this.

You’re going to need process. And you need a process built out for every phase of the property management cycle. Number two is to know Your numbers, know your numbers have optics. So you know where you are and you can plan for where you’re going to be. Number three is to have your team set up. So you are not reactionary when a problem comes up, when a problem comes up, you know who to call and again, you know where you’re going with this team.

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