Is this what springs to mind when you think of being a landlord? 🙂
“I could think of a lot easier ways to make a living than being a landlord….”
This statement made last night by a friend, who works 50 hours a week as a lawyer, completely shocked me. After leaving me deep in thought, it had me running for the laptop …
The purpose of this blog is to clear up the fog that surrounds getting off the beaten track and doing something different. It is intended to help others, especially those who don’t know a huge amount about passive income or investing, to overcome the obstacles which pre-conceived ideas and ‘common thought’ provide. They prevent people from having more income, quitting a job they don’t enjoy, retiring early if they want to and living the life they dream of.
Working once and being paid forever more for it, is passive income. The rental income from property is one way of achieving this, but network marketing, stocks and shares, affiliate marketing and owning a business are other ways of achieving this. Property is the route I chose, which enabled me, aged 23, to have the option of retiring and never working again. My mission now is to help others do the same (but younger where possible!).
There are two main points I would love to get clear:
- Pre-conceived ideas are DANGEROUS. Racism, sexism, homophobia, ageism, classism… these are the common ones, and we (nearly) all agree that judging someone based on the colour of their skin, sex, sexuality, age or class actually says a lot more about the person doing the judging than the person in question. However, pre-conceived ideas come in many other forms and I am confronted with them almost every day in my line of ‘work.’ My friend’s statement:
“I could think of a lot easier ways to make a living than being a landlord… dealing with all those nasty students, all that hard work, I couldn’t think of anything worse…”
What stopped me laughing, and left me speechless was the fact that the gentleman works nearly 60 hours a week, and has said that having worked for over 20 years, he is only halfway to retirement – but most importantly, he does not enjoy his job!
I know people who, with no prior knowledge about property investment, and no cash, became financially free so that they can retire if they choose within 1 year. Of course this wasn’t achieved without putting in any work, however to say that 45 years of work is “easier” than 1 year is a BIG statement, which needs looking at.
Let me make it clear that I am not having a go at my friend, or being rude, because I am sure that I had similar views – that investing in property is extremely difficult, time consuming, or risky not so long ago. His view does not say much about him as an individual, but is says a huge amount about the society we live in. We are all led to drink from the same well, and that well is “common knowledge” where unfortunately we naturally react negatively to a path different to the norm. We have a lot of baggage that we carry around with us and all too often we deride others for seeking “get rich quick schemes” or for being naïve.
What is your point Alex?
My point is simple- it is natural and in fact probably wise to be wary of opportunities that seem too good to be true, BUT please don’t make the mistake of rejecting something just because it is different to the norm. The most successful people I know are very open minded, and whilst it is only natural to have pre-conceived ideas, jump to conclusions, or be fearful of the unknown, they try their best to put these to one side and assess situations objectively.
Make sure your safety net doesn’t have any holes!
Property isn’t for everyone, I completely understand that – some prefer different methods of bringing in passive income. But even if someone loves their job, and wouldn’t quit even if they were bringing in a shed load of cash each year without working, I find it difficult to get my head around why someone wouldn’t want to be able to have the choice to not work. That is all a pension is, but property is a better, more secure (Equitable Life?), more profitable (definitely!) version of a pension (see later blog to examine this further!). The security – what if you lose your job? What if you want to look after your children? What if you were to be in an accident that left you unable to work? But unfortunately most people do not enjoy their job and would choose to do many different things from 9 to 5, Monday to Friday without needing to think about pay cheques. Would you go on holiday? Spend more time with your children? Look after your health? Play more golf? Do more charity work?
So – if you catch yourself reacting negatively to a situation and you don’t know why, just wonder if that genuinely is you doing the thinking! You never know, you might just be snubbing an opportunity that would completely change your life.
- Doing the work is very different to having the work done!
Leverage is at the heart of any successful business, and my friend unfortunately demonstrated his ill grasp of this concept by saying that property is a difficult job. My friend and mentor, Rob Moore, says that “property isn’t easy, but it is simple.” There can be many tasks, but if the business is running successfully, then many of these are outsourced, or leveraged, so that other people are performing them. If someone spends all their time sourcing discounted properties, doing the refurbishment themselves, finding the tenants, and then managing the property (and that’s the simple version of the list!), my friend would be completely right – that would be a difficult job and probably not that well paid as you could only be working on one project at a time.
The smart investor however, makes other choices- being a full time landlord is old school! They might hire someone to source them properties at a greater discount than they could achieve by themselves because that person has the time, expertise and contacts to do so; they would certainly hire a building team to perform the refurbishment and maybe even a project manager so they don’t have to manage the builders; and they might hire someone to find and manage their tenants. Yes, these things cost money, but getting experts to perform tasks not only enables the job to get done very efficiently (maybe even better than they can do themselves), but it buys them time, so that they can take on more projects and generate more income or alternatively have less stress and more leisure time.
Leveraging other people to get the job done so much easier, quicker and better!
So, in conclusion – a business is what you make of it. I know and work with many people who have no desire or interest in actually being hands on investors. They simply like the rewards from investing in property. If, like my friend, you think being a full time landlord, managing “nasty students”, is hard – don’t be that guy! If you want to be a hands-free, arm-chair investor, where your only responsibility is to check that your bank account hasn’t overflowed 😉 then choose this route. Reaping the rewards from a business or property does not have to be a whole load of hard work!!
So, if you like the idea of benefiting from passive income, and generating income with very little work then I urge you to think about how you can materialise this goal. As I said earlier, having been lucky enough to achieve my goals, my mission is to help others achieve their financial dreams. If I can be of any assistance – either through guiding you on how to invest safely and securely, or through working with you to generate substantial investment returns or build a portfolio, then please don’t hesitate to contact me now. I offer free initial consultations which can be booked through my website on www.alexszepietowski.com
I wish you all the best of luck!
