I’ve talked to many landlords over the years and we all have our individual reasons for becoming landlords. I’d like to think of these are due to our landlord mindset and that mindset may not always involve a straight path.
Some people are using rental properties to create their own retirement income. Others are using it as a vehicle to escape their jobs by creating cash flow right now and others are using it to create long term wealth for not just themselves but their family as well.
All of these are great reasons, but they also require their own unique landlord mindset.
Here are a few of the mindsets I’ve run into along my journey of educating landlords.
Retirement Mindset
For those planning on using their rentals to subsidize their retirement it requires a longer term landlord mindset with plans to use the income and possibly the sale of the property to fund that retirement.
These landlords are primary focus isn’t the now, but the then which could be five ten, twenty years down the road or more!
Day Job Replacement Mindset
In this case your landlord mindset is focused on maximizing cash flow NOW!!
The faster you increase your cash flow, the sooner you can get out of your job. This was where we were at 15 years ago and our focus was acquiring as many properties as possible and getting huge amounts of cash flow coming in.
Long Term Wealth Mindset
This mindset seems to be the landlord mindset that many longer term landlords or Real Estate investors evolve into once they see their portfolio grow and better understand what they’ve created for themselves.
Sometimes it’s by accident, sometimes it’s all part of the master plan!
What’s Your Landlord Mindset?
Of course there are also dozens of other mindsets or combinations of plans that people end up in.
Very common is the accidental landlord who became stuck with a property and tried becoming a landlord (these often don’t end well for the landlord…). There’s also the I Attended a Seminar Landlord, some of whom succeed while others sit on the sidelines forever afraid of pulling the trigger and taking action.
Whatever your actual mindset is, it helps point you towards your eventual goal. Whether it’s the short term or the long term goal, it all starts with that mindset.
If you have a strong plan and a strong goal it becomes far easier to achieve, far easier to articulate to others and even reinforcing to yourself when you share it.
So today’s Friday thought is a question for you. What’s your landlord mindset?
Leave a comment below telling me what your goal is and why and for the brave maybe even share what you’ve learned along the way to help you!
Hey Bill! Nice article.
I think I’ve evolved over the years. I started out as an accidental landlord but always had a long term mindset.
I had some nice extra income and when my rental was paid off I would have a home free and clear to do with whatever I needed. Supplement retirement income, pay for college tuition, travel the world etc.
Now, after a little bit of success, I feel like I want to accelerate my growth to drop the day job.
Thanks Domenick,
It’s actually quite common for people’s thoughts to adapt over time. Some stay on their original path, some quite once adversity hits them and others like yourself discover the opportunity to expand even more.
Bill
Bill, our plan was to offset our retirement income. Our struggle after 10 years of being a landlord, is do we buy more property? We now know the ins and out of the rental business but struggle to decide if we should add more properties to our portfolio.
We have a condo that isn’t generating as much income as we thought, but dumping it might cost us more money.
We also have a property in the US that we are thinking of turning into a rental property. Our friends seem to have done really well with their US property…
Hey Neil,
Thanks for reaching out, we haven’t talked in ages!
I guess in response to your question, what’s your mindset?
You just mentioned you now know the in’s and out’s of rental property now, plus you’ve reached the ten year mark where the properties you already own are really going to start working in your favour. So if you added more properties could you handle it? Would it still be within your current landlord mindset?
With your condo, and I dislike condos as investments as so much is out of your control, make it a business decision. If you did sell it and took a loss now, would you be able to recoup that loss in five years? If you don’t sell it how much will it cost you over the next five years? Would selling it now give you a jump on turning another property into a success?
For the US property, there is a ton of homework you need to dig into as a foreign investor. It can work but again, you need to make smart business decisions and while your friends may have done well looking back over the last say five years, what do the next five years look like? Everyone’s a genius when you use hindsight, but more people tend to get caught buying in after the big jumps and then they wonder what all the fuss was about.
The article was about mindset and really it comes down to what your mindset is. If you’re ready and willing to jump into a new market then perhaps it’s a good decision for you. If you’ve found the formula here, maybe you just need to tweak it and make it work even better.
We often get distracted by opportunities (and I’m jus as bad if not worse than anyone else as I have a hundred different things going on a round me) so the question ends up being, do you focus on what’s working or you’re in a position to try something new?
Your thoughts?
Bill