I’m a firm believer in the idea that rental property is an essential part of attaining financial freedom. It’s different from any other capital asset you can purchase. I mean think about it: for what other asset can you get a loan for the purchase price? I’m not aware of any bank loans for stocks. But I do know a lot of programs geared toward obtaining mortgages.
Having a rental property as an asset also gives you tax advantages. The government allows you to depreciate the purchase price of the house. You also get to deduct repairs and other expenses associated with owning the property on your tax return.
But the best part about owning rental property is that once you find a great tenant, they pay for the house and are glad to do it for you. What other asset offers that opportunity?
I have written before about the notion that since a tenant creates the houses cashflow, they are your asset, rather than the house itself. That idea came into focus for me when we received a call recently from someone viewing a rental we have on market.
The caller informed us that someone had spray-painted graffiti on the house’s privacy fence. We went over there to inspect, and sure enough, someone had scrawled a slur in big black letters on our fence the night before.
I thought to myself, “Really? Who does something like that in Calhoun?” Let me qualify that.
When I think of graffiti, my mind gravitates to the urban areas of Atlanta and Chattanooga. (Which by the way, the people do those murals are some the most gifted artists I have ever seen. How they get a spray can to make those pictures — all while hanging upside down and off the side of an overpass — is beyond me. I mean, that’s some David Copperfield/ Chriss Angel type of stuff.)
But we’re not in that kind of area. This house was three doors down from a middle school in Northwest Georgia. This wasn’t a street artist, it was a vandal. And defacement of private property like this just doesn’t happen around us.
I couldn’t help but notice school had just gotten out for the summer break. My guess is some kid trying to impress someone else, did his best Beavis and Butthead impression and said, “Ah-huh-huh-huh, watch this.”
As a result, we had to take a belt sander to our fence to make the letters go away.
I have written to you before about the four jobs of a tenant, which are:
No. 1. Take care of, maintain and improve the property. No. 2. Pay on time. (Notice that taking care of the property comes before paying on time.) No. 3. Be a good neighbor. No. 4. Be comfortable to work with by being respectful and keeping in good communication.
The whole reason this happened was because we didn’t have a tenant in the house doing the No. 1 most important job of a tenant — taking care of the house. Caretaking also means protecting it from spray cans held by pubescent kids trying to impress others.
Our previous tenants left last month because they got a job transfer and had to move to the other side of the country. When they vacated, they gave a good notice, paid to get out of the lease and left the house immaculate.
The reason this house is still vacant is because we’re very choosy with who we hire to take care of our houses. We are getting a ton of application that are just not very good ones. Needless to say, because we didn’t have a tenant protecting the house, it was left vulnerable, and the rest is history. And besides their ability to pay for the house, this is the reason a landlord needs a good tenant.
Joe and Ashley English buy houses and mobile homes in Northwest Georgia. For more information or to ask a question, go to www.cashflowwithjoe.com or call Joe at 678-986-6813.