Investing Outside of Wall Street – “Landlords” then, and now?

There is a perception among many, including judges, that landlords are extremely wealthy and that tenants are much less so.  I believe this was true for centuries since when the term, landlord, came to exist.  Doesn’t the word, landlord, conjure up an image of a medieval time?

I am not familiar enough with anything outside of Japan or the United States.  So, please bear with me as I spell out what I’m thinking as I try to find out some answers:

  • According to Oxford Dictionaries, lord is a man of noble rank or high office.
  • According to Cambridge English Dictionary, informally, lord is a man who has a lot of power in a particular area of activity.

Few in modern times are called “lords.”  The only exceptions I know of are:

  • The Lord – as in God.
  • Lord – as in someone’s last name.
  • Landlords – property owners who rent out to tenants in exchange for an agreed-upon fee.
  • Slum lords – bad landlords.
  • Drug lords – criminals who profit by selling illegal drugs.

Except for God and someone’s last name, all other words that are associated with lords (that I could come up with) are neutral, at best, or very negative.  No wonder landlords are associated with such a negative connotation in the minds of the public – and judges!

Like many immigrants to the U.S.A., I came here with few possessions – some clothing and just-enough money for a one-way ticket back to Japan, which my father made sure that I had.  Aside from that, hope and willingness to do whatever it took – to enjoy life, liberty, and the pursuit of happiness – were all I had.  Terms such as “landlord” and “investor” were not even in the realm of my thoughts in either language for half a century.  An eventual rental-property ownership came to exist in my small world out of necessity vis-à-vis how I viewed where the financial world – as it related to my personal retirement – was headed in 2000.  I think you’d agree that my situation hardly fits the image of a landlord whose wealth has been handed down within the family for generations.

A few years after the market crash of 2000, I discovered real estate as a means to secure my financial future, without having to rely on others: not on Wall Street, and certainly not on the government.  The last thing I wanted was to find myself becoming a ward of the state in my adopted country.  Here is why.  The minute an individual becomes dependent on others, especially on government programs, he/she is choosing to go down the path of an eventual lack of freedom.  Worse, financial dependency becomes a way of life.  And the cycle of poverty is set in motion.  Climbing out of it becomes nearly impossible.  You can see the negative effects of this on any native-Indian reservations or in any inner city in the U.S.A.

Over the years, David and I worked diligently and accumulated what we have today.  As a result, we are very protective of everything we own, including our rental properties; or, more accurately, what’s left of them.  (That’s a whole different story – to be addressed in my book #2, if and when it does get published.)  When we purchased them, our basic guideline was that each of them was safe enough for our then small grandchildren to live in it.  Unfortunately, however, we are unable to claim such an intention about any of our properties publicly due to the highly litigious society that is the U.S.A.  Why, then, am I able to write about it on this post, you might ask?

One of the things we needed to learn as we had set out to accumulate properties was that the public must not be able to identify which properties we own.  Why is this important?  Because there are always some unscrupulous people who are looking for people to sue.  Instead of working to build something positive for themselves, they look for easy targets from whom to siphon off money.  In fact, this country is full of trial lawyers who encourage such behaviors.  I understand that everyone needs to make a living but it is a very sad state of affair, isn’t it?

What is described in the above paragraph is just one of many legal maneuvers that were put in place to help protect our assets from potential predators.

Michigan is known as a pro-tenant state.  Property owners are required to follow certain legal procedures to make sure that the rights of the tenants are protected. It is as if the state government believes that property owners can withstand non-payment of rent for a few months when, in fact, nothing could be further from the truth.  Most of us, who lost a lot of retirement savings during market crashes, are trying to re-build nest eggs on our own.  Unlike for tenants, in the event of non-payment of rent, we have no protection or safety nets.  Nor do we ever want any government help, either.  Frankly, I’d rather starve than expect the government to bail me out. This means we must figure out a way to scrape funds from elsewhere.  As a result, we also run other real-estate-related businesses.  Can you guess to where most of my Social Security and pension incomes go?  You guessed it! Consequently, we (as retirees) are forced to keep our non-essential expenses to an absolute minimum, just in case.  The reality (that I just described) hardly matches the public perception of a landlord, does it?

Because we had paid into entitlement programs throughout our working years, we could have chosen to “trust the system” and enjoy our retirement instead of choosing to do what we do today.  I don’t know about you but I couldn’t.  After what had happened on Wall Street in 2000, how could any of us rely on funds being managed by others – albeit they are OUR money?

Just to reiterate from some of the blogs I have posted elsewhere within this website, Social Security and pension (over whose fate I have no control) are the very sources of income which I have been trying to REPLACE with revenues from our own rental properties (over which I do have some control).

Another point.  As you saw the definitions, above, a lord is a man.  Although David is certainly a man, I am not.  Therefore, I prefer for us to be known simply as RENTAL-PROPERTY OWNERS, which describes much more accurately the reality of what we are.

Unlike centuries ago, I believe there is little difference, financially, between tenants and most rental-property owners.  In fact, the way I see it, here is the difference between tenants and us. Every year in December, some (but certainly not all) of the tenants choose to buy Christmas presents for family and friends instead of paying us rent – forcing us to not feel comfortable buying gifts for our own family.  I’m not sure if you have ever been in my situation but this is no fun at all when everyone else is exchanging gifts and I am not. Such belt-tightening measure makes me feel not only embarrassed but very uncomfortable. So why not go ahead and spend a few dollars to buy gifts for everyone, you might ask?

Well, it is because we have debt obligations which may or may not be covered 100% by rental revenues. When the tenants sign the lease agreement, we’re expecting them to keep their end of the bargain. Unfortunately, however, not all tenants think this way.  I have a question for you. Why should the government help their irresponsible behavior by rewarding them with a roof over their head when it is their decision not to pay us? Why should we, who became property owners because our financial assets were gambled away by Wall Street, keep on paying for others’ irresponsible behaviors?  Again, I do NOT want government protection.  What I would like, instead, is a repeal of laws that protect tenants without cause.

Regardless of whether or not we receive the rent payment, it is my responsibility to see to it that the banks receive payments from us on time.  There you have it.  This is why I am choosing strict belt tightening over gift giving.  Heck, we hardly travel for pleasure by air any more, either. Imagine what we, as a nation, could accomplish if all able-bodied citizens tightened their belts and refused entitlement-program benefits – to which we are absolutely entitled because of our contributions – until and unless we absolutely need to depend on them?  In exchange, if the government gave those who refuse benefits an equal amount in tax relief, imagine how this will help improve our economy.

Needless to say, those of us who choose a continued path of financial independence (through ownership of rental properties) value our tenants as customers.  Satisfied renters help secure our passive income to keep flowing in.  Naturally, therefore, it is in our best interest to keep the place well maintained.  So that’s what we do.

This is not the medieval time any more when only the super-wealthy owned properties.  We are in the 21st century where the word, landlord, no longer fits the reality of the relationship between rental-property owners and tenants.  Today, both parties are essentially equals.  We are all struggling to survive in the world that looks less and less predictable each day.  The only difference between tenants and property owners is how we choose to allocate our limited funds.


Happy investing!




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