When you’re just starting out in the real estate business, take advantage of what others have already learned through experience… without sacrificing your own time and money. Here, for example, is a scam that you can sidestep by learning from my own mistake.
When my husband and I moved into a triplex we own in Toronto, we dismissed our property manager and started collecting rent from the other tenants directly. Imagine our surprise when the checks were for $100 more than we expected! The property manager had lied to us about the amount of rent we were getting, and he had been pocketing the difference. We figure he stole at least $2,000 from us in that one year. The worst part is that his scam was easily preventable.
Make sure this doesn’t happen to you by asking for copies of every lease agreement. And ask for photocopies of the checks. If the tenant pays by cash or some other method (we use a lot of e-mail money transfers with our tenants), get a printout of the transfer or get copies of the receipts given to the tenants for cash payments. It’s good to have this documentation for tax purposes… and it will help prevent your property manager from taking an extra cut off the top.[Ed. Note: You may be a beginner – but other people have been there before you. Learn from their mistakes, and you’ll build your wealth much faster.
And be sure to check out the website of Internet Money Club member and real estate investor Julie Broad. In eight years, Julie and her husband have built a multimillion-dollar real estate portfolio in their spare time with minimal cash resources..]