The vast majority of my property journey so far has been spent as a ‘Dormant Landlord’.
After being a landlord now for 17 years, roughly 12 of those were spent with me being very inactive and I had my head buried firmly in the sand. This was due to being in negative equity (about 50k worth) and a few other reasons.
Now I have pulled my head out of the sand, I consider myself a regular run of the mill landlord. My negative mentality has held me back in the past but I can’t let it creep back in as I push on. The thing is I’m not content with being a landlord, I want much more.
I want my passive income (profit from rent and other investments) to exceed my expenses. In fact it isn’t just a want, it is going to fucking happen sooner or later. I just need a bit of momentum. The fact that I found myself in the Tunisian desert (sandwiched between Libya and Algeria) at the end of 2019 shows I’m willing to go just about anywhere to get where I am going.
The way I am going to do it is a mix of rental income and income from my Lifestrategy 80/20 fund (I will be reviewing my funds performance over the last 6 months next week).
With regards to the fund, I have got my head around the fundamentals of investing in the stock market and have chosen a fund I am happy with. Then it will be left as it is a set and forget strategy (again more on that next week) and I will check on it twice a year.
Property will be more involved as I manage the Buy-to-lets along with Mrs Duffy. The aim is to get 20+ rentals and this will mean FI (Financial Independence).
At the moment we manage our 4 rentals with a simple excel spreadsheet. This is fine and I now feel that we are organized. In previous years, we would have properties that weren’t insured or didn’t have a Gas certificate. Not intentional, it was down to a serious lack of organization – not fucking good enough.
I feel being a landlord is quite straightforward. That is if you are organized. You can also get horrendous tenants that can be quite stressful but you learn to take more care (due diligence) in choosing tenants as the years go by. You also learn to manage them and keep on top of rental arrears etc.
If it goes to plan and we get more and more properties, we will need an automated system. This will be done using software and letting agents to manage our properties.
My feeling is that when we get to about 10 rentals, the excel spreadsheet will no longer suffice and it will be time to use processes and systems to help us scale up and grow as a business.
This will help me move from landlord to property investor. A landlord does all the day-to-day tasks that come with managing a property like finding tenants, arranging all the legal documents and collecting rent. I want a more passive method and that is why I will eventually get all of the rentals managed.
When I have read property blogs and books (a book I strongly recommend is Property Magic by Simon Zutshi) it is clear that a property investor is more hands-off than a landlord. The property investor has the systems in-place so they are not getting calls from tenants (like I have a blocked toilet and I need you to come round and un-block the toilet and wipe my arse at the same time) and they have more free time to focus on buying more properties and growing the business.
Time will tell if I can move from ‘Dormant Landlord’ to landlord to Property Investor. One thing is for certain is that I won’t be having another 12 year break if I get any further bumps in the road.
If it goes wrong and I don’t quite manage to become an investor I can handle it. What I can’t handle is sitting on the sidelines and doing nothing – If I fail I will keep going. From all the self-development I have been listening to I like a quote from Will Smith: “Fail early, fail often, fail forward.”