Mindset.

Mindset is a commonly overlooked aspect of real estate investing, but it can be a huge factor in your overall success. It should not be something that you take lightly in fact it should be given a lot of thought. Your mindset can greatly influence the way that you get properties and how long you stay in the business.

In the real estate business there are a lot of events that come up that can make a landlord furious. Sometimes to the point where you lose all desire to even be in the business.

I would like to take this time to tell a story of when my dad in the real estate business. He started out with a small house in a town close to where he lived. That house did well for him so he decided to buy another house the following year. Each property was making its own payment and he even had a little bit left over at the end of the month to save. Well, the next year he found himself in the same position that he was in the previous year and he decided to buy yet another house to rent. That left him with a total of three houses. Each property was making its own payment and every year that he owned them the value of the properties was going up so he was building equity all the time. It was in about year five that he had a problem with a tenant. It seems that a lady either had a heart attack in his house or died of a drug overdose. No one knew for sure. But believe it or not that was not the problem. It seems that the lady had a son who decided to move in that day. Keep in mind that he did not live there before he just took it upon himself to move into the house. I think that he knew that just by moving in my dad would have to go through some kind drawn out eviction process to get him out of the house. And in hind sight he probably would have if a judge bought his story. My dad trying to be nice asked him if he was going to be able to pay and the guy got really mad and started to make threats at my dad and said he's moving in and he couldn't do anything about it because it was his moms house. It ended up that my dad paid him off by giving him 200 dollars to leave. That was a good amount of money in 1975. Sounds like it was handled well and everything was fine from that point foward.

Well here is where the mindset factor comes into play. This Transaction cost my dad a great deal of money because as he told me later the fact that he had to deal with a person like this and give him money upset him greatly. What he did was make it personal and in turn it made him think that he no longer wanted to deal with people like this and for that matter be in the rental business at all. Within a year he was totally out of the business and to this day is something that he regrets doing but he let his emotions take over and that was that.

As a landlord you are going to have people trying to, at some time or other, take advantage of you. Your mindset can act like a shield against these kinds of attacks on you. Because if you let them get to you they most certainly will wear you down. I have seen so many people get into the business after talking to me about rentals and deciding that it was something that they might want to do. Very few of these people lasted very long because they let every little thing get to them. They needed a different mindset to get through the first start up period where they are learning the business. Experience will help you avoid problems by identifying them before they ever come up in the first place. But gaining that experience may take some trials and tribulations.

(See the section on avoiding problems later in this book.)

The following is a list of some things to keep in mind when forming your personal mindset. I feel that it is improtant to really think about mindset and identify what you personally can and can't handle and act accordingly.

Take the emotion out of the equation all together.

This may sound simple enough but you really do have to make a effort to always keep this concept in the forefront. you can always be pulled back into the trap of getting emotional if you are not careful. Most landlords really do want to help there tenants but there are times that you simple cannot do this without hurting your bottom line or jepordizing your own success in your business. I am not advocating being totally cold hearted, but you should always keep a firm and steady grip on the situation. You have to keep in mind at all times that you are running a business and that is all you are running. Charity work can be done outside of your business. When was the last time you were able to go to your local department store, and because of a lack of money on your part you got a large discount on a product. The answer is probably never.

There are a lot of sad stories that you will face as a landlord. They usually have something to do with a medical condition of some kind. If I had a nickel for every time a tenant came to me with a story about how they cannot work because of back pain I'd be rich. That seems to be the most common excuse I've encountered. A emotional person would try to help them out but a business person would realize that the property taxes, house payments, repairs, and insurance will keep coming month after month. And the owner is responsible. You could if you don't watch out end up in a cash bind that could cost you a bundle.

Seperate what you would do from your business.

When you go to look at a property try not to think about what you would do if you were moving into the property. Obviously the very fact that you are looking into buying a rental property means that you have some kind of success in your life, and you do not want to take a step backwards in life. It is very rare in fact I never heard of a landlord who only buys houses better than the one he lives in.

It does not matter if you would live in house or not it only matters if the house is a good investment to you. I learned this lesson on the first house that I bought. It was a very small house with two very small bedrooms that could hold a bed and maybe a small dresser if the bed was small enough. The bathroom was tiny also you could hardly turn around because of the cluttered layout of the bathtub and toilet.

(When I sold the House I competely remodeled the bathroom and the the layout was much better and the bathroom turned out quite nice. And size was not even a issue after that point. )

The other rooms were decent size but the idea of living there to me was a very scary proposition. All the financial factors of the property were favorable but I started to have doubts as to whether or not anyone would want to rent the house. That is until my first open house. I had cars lined up and down the street, and they showed up about ten minutes early. I couldn't believe the way that everyone that came through just loved the house and thought it was perfect for them. After that I had a whole new outlook on properties and how I could make money with them, without having the need to want to live in them.

Think of function in your remodeling over the Fancy looks.

This Kinda goes back to the Idea of seperating what you would do rather than what you should do to rent a property. When you first buy a house there is a tendacy to make the place really nice and fancy thinking that you can somehow pass this onto the tenants. This does not always work out for your average rental property. A clean freshly painted well maintained property is what most potential tenants are looking for out of a rental. Sometimes it would look better to use a nice ceramic tile over plain linoleum but the cost involved will not be reflected by the rent receipts.

Look for a carpet that wears well over looking great.

When you look at any property you must look past the minor flaws.

As easy as this may seem it is harder than it looks. Sometimes there will be a lot of trash piled up in the property. This problem although unsightly can cause someone to think that the property is a complete wreck. I know how I the won with him know what didn't the him in the end the him know will you will do I know you the name and that is an him all I was in it is the going to hear you were to whom you won't need an old