Mack had never dreamed of being a landlord. He had two children, a boy and a girl, under the age of 5, a full time job and his own home to maintain. He was hesitant at best. His father passed away when he turned 25, and left him with a little three bedroom home in rural OH.
The market wasn’t great for selling, so Mack grudgingly listed the home in the local newspaper, where a young couple saw it and rented it out. They were good tenants and never missed a rent payment, and even did some of the home maintenance themselves.
Even so, Mack was meticulous at keeping records of each low-risk transaction.
As time went on, Mack began to wonder why he had never considered investing in property or being a landlord before.
As the years passed, and money allowed, Mack began to buy rental houses once every few years, using the income and equity he built from the properties to take out mortgages. The importance of tracking everything became higher and higher on his priority list. Whether it was what he promised his tenants, the $5 lightbulb fixes, or the roof replacements, Mack had to have a way to know whether it made sense for him to continue owning each particular property.
As Mack started branching out, buying in different towns and buy more properties, things got a little more complicated. But Mack never changed his method. He consistently tracked everything, including agreements, rent renewal dates, missed rent payments, projected dates of possible needed maintenance and more.
Mack tracked every single expense and had a good record every year of just how much he brought in. Mack was rarely caught off guard by unexpected taxes, expiring leases, or huge unexpected maintenance costs.
Why Mr. Smith was successful:
- Tracked everything.
- Had a calendar/schedule so he never missed an important date.
- Kept track of when preventive maintenance should be due.
- Recognized and rewarded good tenants.
- Got rid of properties that were draining money.
- Had an understanding of just where he stood financially so he could figure out what he could afford.
By the time Mack’s son was ready to go to college, he had 12 rental homes and they were all paid off. He discovered just how he was going to send his kids to college! And after college? Well, it just looks like he might have some passive income to help him through retirement!
Also published on Medium.