Elizabeth Colegrove calls herself a “reluctant landlord,” but there’s nothing reluctant about the way she runs her rental business. Since she and her husband bought their first property six years ago, they’ve added to their portfolio, even though they move a lot. Elizabeth has become the ultimate remote landlord.

Her husband is an active-duty Navy pilot, so he’s reassigned or deployed to a new location every few years. The military lifestyle inspired the couple to create some ambitious financial goals. They want to retire in their early 40s, and live and travel wherever they want, something you can read about on her blog.

They decided real estate will help get them there. Today they own and self-manage eight single-family homes, from Texas to California, and they aspire to own 20 properties total.

We caught up with Elizabeth to learn the secrets to her success, and see what kind of advice she’d give to anyone who’s thinking about buying their first rental property, especially military families.

What inspired you to get into real estate?

Elizabeth: My husband and I decided that when we were done with our military world, we wanted to be financially independent and control own our destiny. We quickly realized that even though I have a masters degree, moving frequently and living in different locations means following the career path I had in mind wasn’t going to happen. So we started picking up rental properties.

We bought our first house because we knew it was cheaper than renting. Then we realized if we picked up more of them, we could retire in 20 years. My parents were accidental landlords for 26 years with one property. So we knew that owning a property and having that side income was a great investment.

Tell us about your first real estate purchase.

Elizabeth: We spent two years playing in the stock market, and while everybody else made 30%, I lost $100. I quickly realized that my strength wasn’t in the stock market, but I was good at real estate.

We agreed to give real estate a try in Virginia Beach with a single-family home that was nothing special. Honestly, it was our worst buy to date. But it still showed us that we could slowly buy these houses and start producing income.

I can’t say buying rentals was our plan from day one, because it wasn’t. Our plan from day one was to make income that would let us be independent in 20 years. Now, we want to own 20 properties, but the end goal of being financially independent has never changed.

What inspired you to self-manage your properties?

Elizabeth: After I got my masters degree, I worked for a small company that owned six apartment complexes and a bunch of commercial properties. I quickly learned how to read contracts, and I was so disillusioned by the property management contracts and the concept that I decided to give self-management a try.

When we got started in 2011, we had a lot of ups and downs. I didn’t know about BiggerPockets or real estate Facebook groups. And Cozy didn’t exist yet. So I made every mistake you think of. But since our first four properties were on the east coast, and we were on the west coast, I learned how to conquer the distance factor.

What are the financial implications of self-management for you?

Elizabeth: Between my eight properties and the four I manage for my parents, we would be spending about $44,000 a year to hire property management companies (at 10% cost with a placement fee). Our tenants tend to move every year or every couple of years—it’s that demographic—so it just doesn’t add up.

For all the headaches that come with self-managing, the fact that we’re doing it ourselves means we’re saving what’s basically a full-time income. It just made sense.

Which one of your financial achievements makes you most proud?

Elizabeth: When my husband was deployed overseas, I knew we wanted to make some big financial goals. The Navy teaches you to turn everything into a positive.

So I moved into a buddy’s house, and we had about 3000 square foot of stuff in 1,000 square feet. Every inch was filled boxes or furniture. But it was worth it. I took a better job and we didn’t have much of a housing expense, so we saved $60,000 in 10 months.

We also bought two houses during that time, and we’re selling one of those right now. We have enough profit and equity in that one house to be able to buy a much nicer house for $100,000 more. That way we’ll increase our rent from $1,300 to $2,100 a month.

It seems like you’re good at being flexible and shifting your goals and strategies based on what’s working and what’s not. What’s your current focus?

Elizabeth: The markets have done really well lately, which stinks for buying new houses. We’ve been working on buying a house in Washington for 15 months now, and we’re living on a boat while we wait for it.

What we’ve realized, thanks to the market being so amazing, is those 12-year-old starter homes we bought have enough equity for us to sell them and buy new houses instead. I’m doing a 1031 and selling three of my houses and three of my parents houses, and turning them into brand new houses. Our current rents are $1300, $1425, and $1540, and in the new houses, we’ll collect about $2100 a piece.

There will be lower maintenance costs because the houses are brand new, and we’ll be making more per house by almost 33%. Also, we hope to rent to a clientele that will stay longer.

What are the challenges military families face when it comes to buying real estate?

Elizabeth: No military family ever has the luxury of buying their dream house. The reality is that 95% of military isn’t somewhere long enough that they can buy a house and ignore the market. Every house you buy has to have an exit plan, whether that’s renting or selling.

The problem is, having a plan to flip your rental doesn’t work, as demonstrated by the last recession. So you need to have a rental plan. Your mortgage has to be less than the current rent. You basically have to buy a rental everywhere you go with that mindset. And then you have to be willing to know you’re going to manage a house anywhere in the world or hire a property manager.

It has to be a business plan from day one. Real estate is a 30 year commitment. That’s what you sign up for with that mortgage. If you can get someone else to take over paying the mortgage, whether you sell or rent, that’s great. But you’re signing up for a 30 year mortgage.

That comes back to the idea of being flexible.

Elizabeth: You may get last minute orders for a place you don’t want to go, and you may stay there for 10 years. You never know what’s going to happen in your life. Welcome to the military.

The reason we’re living on a boat is because if I knew we were going to be here for 12 years, I could buy that big old house and ignore the market. But the reality is, we’ve got two to three years’ orders up here. When we leave, we need to know what we buy is going to become an asset, not a burden. The only way you can do that is by buying with an exit plan. Civilians should buy with the same mindset.

What do you tell military families about a VA loan?

Elizabeth: The VA loan is a great loan, with zero percent down. But since many military families fall under income restrictions, there are a lot of other loans available to them. So before they use the VA loan, they should see any other loans are available to them. There are lot of first time home buyer loans out there, so once you use a VA loan you’re not eligible for them. With a VA loan, your eligibility never goes away.

Do you know families who self-manage properties from long distances? Internationally?

Elizabeth: With technology, like Skype and email, it’s doable. I know many people who’ve managed rentals in the U.S. from Bahrain. Military’s actually kind of cool because if you’re stationed overseas, you have the ability to fly the military version of standby. So you can fly home if you’re flexible.

Also, military communities are really strong. We help each other out. We show houses, we grab keys.

What advice would you give to someone who’s thinking about buying their first rental property?

Elizabeth: Buy it as your home first, then turn it into a rental later. Buying a pure rental property is very hard. You’ve got to put 15 to 25 percent down and your interest rate is higher. You’ve got to figure out a lot.

Even if you’ve used up your VA loan, and there’s a five percent conventional loan, buy that. Try it out. Live in your house. Make sure it’s ready to go.

Don’t over update it. Granite countertops vs laminate countertops probably isn’t going to make a huge difference in your rent amount. Rent it out when you move out. That’s the best way to let someone else grow your income.

What should people look for in a house they’re going to live in and possibly rent out someday?

Elizabeth: Location, location, location. You should buy the crappiest house in the nicest neighborhood with the best school district. The reality is you can change that kitchen, and maybe not increase square footage, but you can’t change the neighborhood. So don’t buy that new build that’s gorgeous but the neighborhood is $200,000 and the house is $325,000 in the worst school district.

Things to keep in mind when looking for a new house: Does it have new siding? Does it have a new roof. How are the windows? How are the bones? Look at entire structure of the house.

What are some of the risks of owning and managing rentals?

Elizabeth: Being a renter means when the roof gets blow off in the storm, you call the landlord and they deal with it. So when you own it and the storm blows the roof off, you have to deal with it financially. You’re assuming the entire risk.

There are ways to lessen the risk though. One of the reasons I love Cozy is it’s super easy to run a background check and a credit check. Military shouldn’t assume that just because you’re renting to fellow military they’re going to be perfect.

What other kind of smart decisions can people make for their rental businesses?

Elizabeth: Put together an emergency fund and write a good lease, because everything’s great until it’s not. A lease sets out what we’ve agreed to and how we’re going to treat the house together.

So if they decide to smoke and the lease says there’s a $500 penalty for doing that, then that’s what they’re going to pay. Your lease is what you want to go back to. If you’re having an argument, you’ll refer to that.

Are there ways to make rental properties a short-term investment?

Elizabeth: Not realistically. It’s important to remember that just because you made a lot of money in 2011, that’s not going to happen every year. Buying a house brand new then selling it to your renters for a $30,000 profit three years later is not normal. If you do that and you get lucky, that’s amazing. Congratulations. I’m super excited for you. But that’s not how buying typically goes.

For us, this is a long-term game. We’d love to get to 15 or 20 houses and by the time we retire have a nice portfolio and leave it to our kids. I’m not going to get rich and cash out. Sure we’ve done great, but we’ll do even better at 20 properties. This is something that’s going to last and be that gift that keeps on giving.

So when you reach your goals, and you and your husband retire in your early 40s, what will your life look like?

Elizabeth: We want to have kids and take our kids on an around the world adventure. Our biggest dream is to sail around the world, but more importantly, it’s to be able to write our own future.

We’re hoping to able to avoid chasing that best job. Instead, we’ll be chasing what works best for our family. The finances will come second. We won’t need to make decisions based primarily on finances, because we’ve already made the decision to make our money work passively for us.

You can do it, too. Take baby steps. We started with one rental and had the opportunity to buy two, then three, then four. Don’t get overwhelmed. Just buy one. Then, when you see a great opportunity for your family, buy two.

A house is a little business. You can rent out a room, rent out your basement, or rent out one half of a duplex. Ultimately, you can control how you allow someone else to pay your mortgage.