Part I: Introduction, Defining Destination & Budget Goals, and Becoming an Absentee Landlord

Whether you're a landlord, a real estate investor, or just a regular wage slave looking to escape the drone-like existence of 9-5, most of us have daydreamed about living on a tropical island somewhere sipping pina coladas and having income wander its way into our checking accounts.

What if you could live off your lease income alone? What would that take? What would it look like? No, it's not a get rich quick scheme, or some kind of snake oil I'm trying to sell, but merely a description of a lifestyle possibility that you may not have realized existed. Welcome to the three-part Absentee Landlord series: you are now reading Part I.

Introduction

Let's start with a disclaimer: The Absentee Landlord lifestyle is not ritzy or glitzy, it's not about shooting Kristal corks at your fellow rap star while girls dance in the background, and it will NOT make you rich. What it will do is allow you to live anywhere you like, stress-free, and work-free, with minimal obligations.

"So what does the Absentee Landlord lifestyle look like? Do I even want it?"

The average Absentee Landlord earns only a few grand per month, which is not much by, say, New York City terms. However, the Absentee Landlord can live anywhere in the world, so they don't have to pay New York City prices if they so choose.

The Absentee Landlord has a property management company handle their lease properties, so the Landlord is only minimally involved. Further, all of their payments are made automatically and electronically.

The Absentee Landlord is free to pursue their dreams, whether that means spending a year in Costa Rica learning how to surf, or becoming a ski instructor in the Swiss Alps, or moving to the mountains of China to become a Kung Fu master. The Absentee Landlord lives frugally but comfortably; they lead a rewarding lifestyle.

"All right, all right, I get the picture. In broad terms, what does it take to accomplish the Absentee Landlord lifestyle?"

First, you need to start building an investment portfolio, with a solid, long-term lease agreement signed on each one. Second, you need to maximize your cash flow from these lease agreement investments. Third, you need an excellent property management company, who can handle everything from tenant screening to landlord forms to eviction procedures, etc. Fourth, you need a Goal Budget, which will become more or less fixed. Fifth, you need a Destination, and the accompanying planning. Sixth, you need to go mobile.

The good news is that those steps do not necessarily have to be done in order. In fact, we're going to start with Step 5, before moving on to Step 4, and then we'll adjourn until Part II of this series.

The Destination

What are your dreams? To live in a coconut shack on a white beach with blue-green water lapping your feet? To ski every day? Maybe to help build infrastructure for outlying villages in third-world countries?

We live in a world that is, for better or worse, driven by money, so you'll have to consider the costs associated with your dreams before you can go about budgeting for them. It costs a lot more to live in Hawaii than it does in Belize, for example. Decide on your first dream, print off some pictures that embody your dream, and put them up around your office, cubicle, home, bedroom, refrigerator, and anywhere else where they'll remind you of what you're working towards. For the sake of argument, I'm going to say that my dream is living in an artsy little town on the shore of Costa Rica, where I can surf, sell my photography, and lead tour groups through the canopy of the rain forest.

Your Projected Budget

What is the historical exchange rate? What is the cost of living in this destination? What will your monthly expenses be? In my case, it will cost me roughly $1,000/month for the comfortable house I want within a ten minute walk from the beach, and within range of cell phone and internet services. I will not need a car, because I walk anywhere in the little town I've picked out. I will need to pay for my phone and internet bills, so I'll set aside $50 for each. I will also need roughly $250/month for food and another $250 for entertainment. I'm up to $1,600/month, and I'm going to add 10% for unforeseen expenses ($160) and another 10% for savings, plus $100/month for health insurance, or $2,020 total.

We now have a goal to work towards, so we'll spend Part II of this series going over the details of accomplishing monthly cash flow through lease agreement investing and other Absentee Landlord principles… see you next time!

Links to The Absentee Landlord Part II and The Absentee Landlord Part III

Customizable Lease Agreement through EZ Landlord Forms

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