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Some time ago, I had some problems with the first commercial property I purchased. The tenant's business failed, and due to some mistakes I made, he still owed me quite a lot of money. I learnt many lessons from this deal, and in this article I will share one of the most important...
Lesson 1: Don't Trust People To Get Back To You...
Because this was my first commercial real estate investment, and because it was an out-of-town investment, I decided to use a local property manager. At first, things seemed to be going well, but I began noticing some discrepancies in the figures. The tenant was getting a bit behind in the rent.
I called the property manager, but he wasn't in. I told the secretary the details, and was told the manager would get back to me.
Two weeks passed, with no reply.
At this stage you're probably asking, How did I let 2 weeks go by?
Well, for me, real estate investing is not my full time activity. I have a lot of other things I do in my life, and real estate investing is not my top priority. So when I was told the manager would get back to me, I took it out of my mind, and got on with my normal day-to-day living, expecting him to get back to me.
It was only 2 weeks later, when something triggered my memory, that I thought to ring back and see what was happening.
This same problem happened several times, sometimes with more than a month passing before I remembered to chase things up again.
Now, you might say that the problem here was with the property manager, not me, and that I should drop the property manager on the spot.
I agree that this is grounds for changing the property manager, but in my experience, this sort of behaviour is quite common in the real-estate world. Tenants, Property managers, tradesman... very few of them get back to you at the time when they promise they will.
So the lesson I learned was to NOT expect them to call back when they say they will. Make a note in your calendar on the date the are supposed to reply, and call them back if they haven't. Or, if you want a more powerful solution, do a online search for "Tickler File", as these are a great way of tracking this sort of thing.
The important lesson is to take responsibility for things getting done. Don't leave your investment at the mercy of someone else, and don't expect people to do what they say. Remember: it's your money!
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