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- Franz and Crystal Espanol bought their first rental property 2014, and now own five more.
- They said being a landlord is not a "get-rich-quick" scheme; it's a business that requires work.
When 37-year-old Crystal Espanol's husband Franz, 38, told her that they should start investing in real estate, she was hesitant.
She was originally more concerned about paying off their combined six-figure student loan debt and felt like they weren't in a stable position to start buying real estate. Franz, however, wasn't convinced it was a bad time for them to start.
"I am really stubborn and I convinced Crystal that this is one way where we can really get leverage, or make our money work for us," Franz told Insider. "So I bugged the heck out of her."
The couple bought their first rental property in 2014. Today, Franz and Crystal own five rental properties in Philadelphia and one closer to home in Southern California, and are looking to expand their investments and operations.
It isn't easy money, however. Crystal told Insider that it's important for those who want to do what she and her husband did to not think of it as a "get-rich-quick" scheme, and to understand what kind of work goes into owning and managing rental properties.
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They shared the following pieces of advice:
1. Start by doing your research
"I ended up reading a ton of books. I went to the library every week and just checked out all these books on real estate and personal finance," Crystal said. "I had to read them in the evenings, on my breaks, and I listened to podcasts."
"That process gave me the confidence to invest in our first project," she continued, by building her confidence and shifting her mindset to understand that investing is a tool for building wealth, not just a risk.
However, you don't need to become a landlord to invest in real estate, she added. Not everyone is cut out to be a landlord, and it's important to know the pros and cons of other options before you buy. "You don't have to buy real estate to get into real estate," Crystal. said "You can just invest with a developer or buy a REIT, which all have different vehicles and avenues."
2. Network with other property owners and get a mentor
If you do want to become a landlord, however, Crystal said it's important to network with other property owners who have more experience than you do. "Go to networking events, meet people in the space," said Crystal. "Pick their brains and see how they got to where they are. Success leaves clues, and you can figure out how people got to where they are now by their journey."
Franz added that networking is important, but it's also important to seek out mentors who can help you with resources and guide you toward success. "Crystal and I have had mentors and been mentors to others," he said. "You'd be surprised how many people within your social circle are vested in your success."
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3. Invest in a good property manager
Crystal and Franz credit much of their success to having a "superstar" property manager who lets the couple manage their rentals in Philadelphia remotely from their home in California.
"We started with my law school buddy, who was our property manager, but he ended up selling his business to another gentleman and he was a terrible property manager," Franz said.
Crystal then took it upon herself to interview five or six other managers. Her gut told her they should go with one of the more expensive options, they remember, but they've found that manager is worth every penny and they have no regrets about making the investment.
4. Recognize that this is a business (and you have to work)
Crystal is a lawyer-turned-life coach who works full-time, but said that dealing with their investment properties is, at a minimum, "a part-time job."
"You continually have to make sure that the property is in good order and that the tenants' needs are being met, and that you're paying the bills," she said.
She thinks some people hear the words "passive income" to mean there's no obligation to do any work after the investment is made — but that's not the case. "There's a lot that goes with it," she said. "It's like a part-time job, but it's something that we love."
5. Understand your obligations to your tenants
It's not just important to be an attentive and responsive landlord for ethical reasons, but also because it's the law.
"Since we're lawyers, we understand real property law," said Crystal. "It's important for us to provide tenants with a nice, clean home and to make sure that they have repairs done to their apartment."
Her own experiences with a bad landlord in Philadelphia when she was a renter made her determined to make sure her tenants don't have experiences like the ones she had. Her apartment "was horribly maintained; awful," she said. It had a mice infestation and the landlord didn't do any repairs.
"We make sure all our tenants' repairs are done immediately," Crystal said.
You have to actually like being a landlord to go into this business successfully, she added. "Some people think 'landlord' is just a title, but people's lives are in your hands."
This article was originally published in April 2022.