We all know that owning investment property comes with risk. There’s always a good chance that investors could fail. Sometimes, it’s not the investor’s fault at all, simply a condition of market trends or the industry in general. In Portland, there are a few specific reasons that investors fail. Many investors who can’t succeed end up getting out of real estate altogether. We want to prevent that from happening to you.
Portland Real Estate Investors Try to Do Everything Alone
There is a really common pattern in Portland, and maybe it’s true outside of Portland as well, in which investors feel that they can and must do everything on their own.
If you don’t want to fail with your real estate investment, you need to operate with a view of the long term. This is true whether you’re investing in Portland real estate, investing in stocks, or starting a business. Lots of people read success stories about business people becoming multi-millionaires overnight. It does happen once in a while perhaps, but a lot of time investors get rich slowly and steadily over time. Be prepared to put in the work for months and years.
Investors often get excited by buying their first investment property, and they will try to self-manage that property without realizing how much time it takes and how much knowledge is required. It’s very easy to think that it doesn’t take much, and they can do everything that needs to be done on their own.
But, this isn’t always true.
Maybe an investor will have a bad experience with their resident or find out the requirements of the Portland rental rule book is way more complicated than they originally thought. The rules and regulations in Portland are so complex that the time, energy, and frustration is too much for most investors. It’s easy to forget something or misunderstand something, and then you’ve made a mistake that has the potential to be very expensive.
Landlords who are trying to do the maintenance on their rental properties themselves will find that it’s very easy to fail as well. Not only are they losing their evenings and their weekends, they’re probably not doing as good a job as what a professional and licensed vendor or contractor could do. They may not be responding as quickly as they would if they were working with a Portland property management company, and that upsets the residents.
When rental property owners try to do everything on their own, they’ll likely get burned out within three to five years. Ultimately, they’ll decide that real estate investing is not for them, and they’ll decide to sell their assets and stop dealing with it. This is a shame because if they had simply worked with partners and property managers, they could have kept the property for the long term and earned a lot more money.
Investors Make Mistakes Not Running a Rental Property Like a Business
If an investor buys multiple properties, the stakes are even higher. If you own 30 rental properties throughout Portland or even in a single building, scaling those assets will bring you huge successes. But, if you get out of the real estate investment game because you’re frustrated with how things work, you need to take a look at where your process went wrong. Were you trying to do too much?
Investors who fail often fail because they don’t run their properties like businesses. Anytime you want to run a business and you go to the bank, the bank will want to see a business plan. If you were to ask an investor if they had a business plan, 99 percent of them would say no. They know that their property is a business and they know there are laws and regulations and expenses. But, they are not putting it all together and understanding that they need an actual business plan as well.
A business plan is going to help you understand your strengths and weaknesses. It will help you leverage the expertise of other people. Don’t let your ego mislead you into thinking you have to do everything yourself. It’s not your job to lay tile or put up dry wall.
When you have a Portland property management company, you are leveraging their staff. You have access to accountants and maintenance personnel. You have qualified people to lease the property.
Most people do not buy real estate to have a second or third job.
Rulebooks Don’t Exist for Real Estate Investors
There is not a rulebook that tells you how to run your rental property.
So, it’s a huge mistake to try to do everything on your own. There’s actually a standardized way of doing most things, and best practices that have been perfected over the years. Normally, your professional property managers will know how to handle every situation that’s encountered. They’ll operate within policies and procedures and effectively run your property like the business it is.
There are a lot of laws and regulations in place here in Portland, and most of those are favorable to your residents. That’s going to make things more complicated in this business.
Don’t let yourself fail as a real estate investor in Portland. It’s very easy to succeed when you think in the long term, surround yourselves with experts, and remember to run your property like a business. Contact us at Mynd Property Management to learn how to succeed with your Portland investment property.
You can also visit our Facebook group of investors, which is called Master Mynd. It’s a real estate investors’ club, where you can exchange ideas with other owners. Check out our weekly podcast as well, called The Myndful Investor. We invite leaders in real estate and property management to talk about their success and, more importantly, their failures. There’s a lot to learn from this relatable content.