Is landlording the way to go?

In my opinion, becoming a landlord was the biggest mistake I made in my real estate career.

I bought $10 million dollars in rental properties during my first four years in the business, and it made me a multi-millionaire. I followed the instruction of the books and seminars precisely. It made me rich. But it was a costly mistake.

I can clean out toilets pretty well. I've cleaned out quite a few. It's not the most fun activity I've ever had. I never thought of it as a party. But I can clean toilets in the maintenance of rental property as well as anyone.

Cleaning toilets is symbolic of all the upkeep jobs necessary for being a landlord. But let me assure you, there are many, many other detestable jobs required in landlording, too.

For example, you can have electrical problems.

Once I had a tenant living in a four-plex who got behind on his rent. He was one of only three cases in my career who I actually had to put out on the streets. Most moved out voluntarily when they didn't pay or after they were evicted. But even after the lengthy time-consuming eviction process, this young man continued to live in my apartment. So, the next step (according to the Tennessee Landlord-Tenant Act) was to arrange a mutual time with the Deputy Sheriff to transfer all of his belongings from his apartment to a big pile on the street. This was a very unpleasant responsibility within itself. However, the landlord has no choice in reclaiming his property when the tenant refuses to move out.

In this case, the young man had left most of his belongings in the apartment, and was gone when we arrived with the Deputy Sheriff. As we dumped his worldly goods onto the street, we discovered that he had not only refused to pay his rent. He was not paying his electrical bill, so it had been cut off. We found an extension cord to his buddy's apartment in the same four-plex that supplied the bum with lights and a fire-hazard hot plate. But more recently, he had broken into the crawl space below the fourplex apartment, and had jumped the electrical meter to supply him with 220 amp service! This gave him heat by turning on the burners of his electrical stove and oven to keep warm during the winter at my expense! During the entire eviction period, he had paid no rent and no electricity.

This was a horrible experience, but I could tell you war stories forever about the maintenance problems I encountered as a landlord of so many properties. And these problems multiplied with the purchase of every additional property.

I can clean out one toilet. But cleaning out toilets in $10 million dollars worth of properties is a little beyond me. So, that's why I had to start an in-house maintenance company.

I can rent one apartment to an applicant. But renting $10 million dollars worth of properties is a little beyond me. So that's why I had to start an in-house management company.

Any person who becomes a landlord can handle a few properties. But a few rental properties seldom make you rich. I “became rich” as a landlord by acquiring a lot of properties which required a lot of renting and a lot of maintenance work.

Eventually, my landlording life became helter-skelter.

I never want to be a landlord again.

Real estate investing has too many better opportunities other than landlording.

Dr.Phil Speer