During your early days as a BWB—when you first take over an income property—particularly a residential one—there is a period during which you are getting comfortable with your property. Here is what I mean by "getting comfortable:"
• Happily (we hope) or unhappily (we hope not) you are learning the truth about the building (this is usually somewhat different from what the seller might have told you).
• During your visits to your building (and you will make many visits at the start), try hard to get to know your tenants.
• The actual expenses of your building will become clearer to you because you're paying the bills! These expenses may be somewhat different from what the seller told you—they may be more, or they may be less than you were told. Usually, they'll be more!
• Your income and expense calculations show you changes to make to improve your income from your building.
You will find the "getting comfortable" time is longest with your first building. Why is this? Because you are learning a great deal, as listed above. For your second and future properties, you will feel comfortable sooner.
Take my advice: for your first property, take your time to get comfortable with it. If you rush this process, you may find you do not learn as much as you should about your building. After you are comfortable with your building, you are ready to expand your real estate holdings, should you wish to do so. Here's how you can do this:
Was this article helpful?