I recently came across a blog that has great information and a great name called “Fix em Up Rent em Out” that is written by fellow real estate investor Terry Sprouse. What I love about Terry’s blog is that it is full of his real life wisdom and experiences. He also has a very “Zen” like approach to his real estate investing business which is something that I share.
Terry has a passion for fixing up houses and turning them into profitable rentals, and he does a great job of teaching other folks just how to do the same thing. He has graciously offered to write a guest post for my blog called “5 Reasons Why I Like To Turn Fixer Upper Houses into Rental Properties”. You can find information on his blog and his products at the end of his article.
When I was in boy scouts, I slipped on the ice and hurt my ankle. A little old lady had to help me across the street. Despite that early setback, I was still able to start a successful business turning fixer upper houses into rental properties.
I first started buying fixer upper houses and turning them into rental properties in 2001. The economy took a nose dive following the attacks on the World Trade Center, and the hours on my job were cut in half. I quickly realized that I needed another source of income for times like this when my regular job was sputtering.
I started looking for inexpensive fixer upper houses that I could buy, and I came across one about 6 weeks later. My wife, my two boys, and I repaired the property and before long we had a tenant living there who was providing us with a new income stream. One of the greatest feelings I’ve had was when I received that first rental check. It gave me a whole new warm, tingly sense of financial security. My job situation got better and I returned to full time work hours, but I kept buying fixer upper houses in my spare time.
Reasons why fixer upper house investment fits the bill for the part-time investor include:
1. It is easily accessible.
You don't need a real estate license, a business license, or even a driver's license to invest in real estate. All you need is a pretty good credit rating and a desire to learn.
2. The hours are flexible.
You never have to punch a time clock, and you can work around your regular day job. Once you have purchased a property, fixed it up and rented it out, you can draw a hot bath and relax. The hard work is done. Of course, when a tenant moves out you must be ready to swing into action and get a rental property ready for the next tenant. In my case that only happens every few years. You must respond to the occasional repairs that come up, but that can be farmed out to a handyman.
3. It provides passive income.
A rental house can be as passive or as hands on as you want it to be. Regardless of your approach, the rental checks come in every month no matter how little work you do that month. Try that on your 9:00 to 5:00 job and see what happens! Every day, whether it’s sunny, raining, a week day or a holiday, tenants are always paying you money to be in your rental house.
4. You can learn as you go.
After you have been through a few house closings you learn the drill and quickly realize how easy it is to buy houses. With each new house, your repair skills and tenant management skills improve. Before long, handling tenants will be as easy as herding cattle (or at least as easy as it looks on those old westerns).
5. Long-term earnings can outpace your day job.
If you are like me and you pursue your real estate investing diligently over the course of nine years, you will be making more money from the monthly rental payments and the equity build up in your rental property than you do from your day job. The longer you do it, the better it gets.
Abraham Lincoln said, “I will prepare myself and perhaps my chance will come”. Why not prepare yourself now and your chance for a steady second-income, and perhaps even early retirement will come too. You can still do it, even if you made a couple of slips earlier in life!
Terry Sprouse is author of the book “Fix 'em Up, Rent 'em Out: How to Start Your Own House Fix-Up and Rental Business in Your Spare Time.” For more information, see Terry’s blog at www.FixEmUpRentEmOut.com