20 Things I Wish I Knew Before Investing in Real Estate

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Investing in Real EstateReal estate can be one of the most profitable and secure investments for individuals who do their research and put energy into efficiently managing their properties.

I bought my first property when I was 21 and officially entered the investment game when I purchased my second property a few years later. As my investment portfolio grew, I spent a ton of time talking to other investors, managers, and experienced landlords, attending REI meetings, and reading as much information as possible. I wanted to find out every good and bad situation that could potentially happen during my future as a real estate investor.

It has now been more than 10 years since I first called myself an investor, and there are a few things I learned along the way that I wish I had known in those first few years. Thankfully, I have never had to evict a tenant (thanks to extremely thorough tenant screening best practices) and the rental market has remained competitive enough for my longest vacancy to only be 1 month. While I have been fortunate enough to have a successful rental management history, here are some of the most surprising and important things I learned about owning rental property along they way.  

20 Things I Wish I Knew Before Investing in Real Estate

1. I can’t just change the locks on a renter who didn’t pay his rent.

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2. If a renter doesn’t pay rent, it can take up to 12 weeks before the property is actually vacant if I have to evict him.

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3. I can’t  make any money or profit on a security deposit.

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5. Renters don’t care that there has been a leak under the sink for 6 months. They might finally report it when the floor starts crumbling though.

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6. If I don’t return the security deposit funds back to my renter with a designated timeline, I could end up owning my renter money (even if he damaged my property!).

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7. In Portland, you could have to pay a renter $3,000 to move out if they can’t afford a rent increase. I wonder what is it in my state?

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8. If I don’t keep my tenant’s security deposit funds in separate account I could be fined.

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9. I have to constantly Google myself to find out what my disgruntled renters are saying about me.

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10. My renters will complain when I show up to do routine inspections, even though it’s clearly stated in the lease they signed.

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11. Even though rent is due on the 1st, since I allow a 5 day grace period, I will ALWAYS get paid on the 5th.

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12. There is software for managing rentals that lets me do everything online. Start now, so you don’t have to later.

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13. Renters lie, even the nice ones. Credit reports don’t.

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14. A roof really can cost $15,000 to replace?

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15. I seriously have to re-paint the house every 10 years, and it costs $3,000!?

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16. Spending a hundred dollars a year to clean my gutters can actually save me thousands in water damage.

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17. I’m limited by my state on how much I can collect in late fees.  Usually it’s less than 5% of the rent.

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18. Checking prior landlord references is super important, because a tenant might have been kicked out, but not officially evicted so it won’t show up on an eviction report.

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19. As a landlord, I’m allowed to pull credit, criminal, and eviction reports on all the applicants.  And I don’t have to pay for it, the renter does.

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20. If I enter the rental without proper notice, I might owe my tenant a free month’s rent.  Twelve unannounced entries is a free year of rent.

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