Joshua Smith on the Most Important Lessons for Landlords
Since starting his real estate career in 2005, Joshua Smith and his team have sold over 7,000 homes. He was voted the 30th Top Realtor in America by Wall Street Journal, the top 1% of Realtors/Team Leaders Worldwide, and has been featured in Forbes, Wall Street Journal, Inc., and Realtor Magazine. Josh has also coached and mentored thousands of real estate professionals throughout North America.
We asked Josh a few questions about what it took for him to become a successful real estate entrepreneur and what advice he would give to others in the field.
What’s your backstory? How did you get into this field of work?
I got into real estate back in 2005 at the age of 23. I was looking for a career/industry that had unlimited opportunities, where the only thing that would determine my overall success was my own personal commitment. Real estate was the best vehicle that I found to allow for these things to happen.
What is your favorite part about what you do?
My favorite part about the real estate industry is that I can accomplish my goals by helping my clients accomplish their goals. The more clients I help accomplish their real estate goals, the more I am able to make my own personal goals a reality. It’s the best win-win business I’ve found.
I also love being able to work with and help a variety of clients. Our focus is residential real estate but within that niche, we work with those looking to buy or sell traditional real estate, investors (from first-time investors to large multi-billion dollar institutional investors), short sales and foreclosures, and more. Working with different types of clients along with the shifting markets creates a lot of unique challenges (and opportunities) that force me to always level up my knowledge and my skill sets, so there is never any boredom.
What is a common myth about your job or industry?
The most common myth about real estate is that it is easy. 90% of real estate professionals drop out of the industry within the first three years. And of those that make it, 7% of the real estate professionals make 93% of the income.
Like with all business owners, this job takes massive amounts of work, commitment, focus, consistency, and sacrifice in order to create success. To be a successful real estate professional, you must be a good business practitioner, good marketer, good negotiator and you must know your product. My team and I represent many different types of real estate clients, each having vastly different goals and processes. That’s why it’s imperative to know your market, your product(s), and what’s required for all your clients to achieve their various real estate goals.
What do you wish you had known when you started?
The biggest mistake I made early on in my career was not treating my business as a business. I had the belief that hard work alone would be enough to create success. And while it’s important, hard work alone is not enough. It wasn’t until I started becoming obsessed with tracking every element of my business, learning how to hire and delegate properly, and other business best practices that my business really started to take off.
What is the most crucial trait independent landlords need to have?
There are two things that I find to be most important when it comes to being a successful landlord. Number one: Not allowing yourself to operate by emotions. It is important to treat your rentals as a business and make decisions based on numbers, not emotions. Number two: Take the time to learn what exactly you are investing in. Investing can be risky, but the more knowledge you have, the more risk you can eliminate.
What are some common mistakes landlords make? How can they overcome or correct them?
This piggybacks off my previous answer on the traits landlords need to have. I see so many landlords get themselves into trouble by operating from their emotions versus making smart business decisions, and not taking the time to educate themselves about what they’re investing in.
As an example, right now in my market (Phoenix, AZ) we currently have home value prices dropping, rents lowering, and short-term rental occupancy rates going down all at the same time. There are a lot of house flippers who are stuck in a bad position currently — and a lot of landlords (both on long-term holds and short-term rentals) who are now getting bad overall cap rates or are losing money. Over the past couple years we saw so many investors buying out of emotion (e.g., the fear of missing out), instead of being patient, taking the time to assess the overall investment, and accounting for best- and worst-case scenarios.
As difficult as these experiences are, I believe it’s important to treat them as lessons learned and use them to grow, reflect on what went wrong and what went right, and improve your long-term investment strategy instead of just giving up. Failure is all part of success and we are all going to experience failures along the way, but those failures can be minimized by not making emotional decisions, and instead making strategic business decisions based on thorough research of the product and market.
What do you think the real estate industry will look like in five years?
It is really hard to know where the real estate industry will be in five years. Real estate is hyper local (i.e., what happens in Phoenix, AZ may be much different than in Evansville, IN) and there are so many factors in the global economy. However, if I had to give my best guess, I think we are headed for a long, deep global recession (if not a global depression), and I see the real estate industry getting hit really hard — to the point where it could take a decade or more for prices to come back to the 2022 peak (similar, if not worse, than what we saw from the 2008 Great Financial Crisis).
We are now coming out of the largest “all-asset bubble” of all time, and we face a debt crisis (on all fronts: consumer, governments, and corporations) that is far larger than anything we have ever faced — and I believe there is going to be some big economic pain. But ultimately, I don’t see this as a bad thing, as asset prices need to come down and it will create a lot of great buying and investment opportunities.
What advice would you give first-time landlords?
The advice I would give to first-time landlords is to make sure to do your due diligence. Make sure you know your overall investment goals, and take the time to educate yourself on the market and product you are investing in. Be sure to know your numbers, and have a plan for the best-case scenario along with the worst-case scenario.
Can you share your top three book recommendations for our audience?
My top three book recommendations are below — the first two are specific to globalization and the times we’re living in:
The Rise of America by Marin Katusa
The End of The World Is Just The Beginning by Peter Zeihan
The Rich Dad Poor Dad series by Robert Kiyosaki
Is there anything else you want to tell our audience?
One of the quotes I have learned to live by is: “Never sacrifice what you want most for what you want most at the moment.”
Learning the importance of this has allowed me to overcome obesity (by losing over 100 pounds and keeping it off for 10+ years now), to overcome alcohol/substance addiction, to build several successful businesses, and overall changing every aspect of my life. It comes down to getting extreme clarity on what it is you want most in life, developing a plan to get from where you are to where you want to go, then making sure your daily decisions and actions align with where you want to eventually end up.
We can all create the lives we truly want and the pain we must endure to make our goals a reality is always worth it in the end. Go create the life you truly want and deserve!
Where can our audience find you online?
Interested in learning how Azibo’s free platform can help you manage your rental property finances more effectively? Click here to learn more.