You may ask, “what could possibly be stressful about owning rental properties?”
Will, let’s start by taking a look at the positives. Things like monthly cash flow, loan pay down, yearly appreciation, and BIG tax breaks have us feeling good.
Make no mistake; there are a TON of positives to owning rental property.
However, don’t jump into the rental property game without seeing that there are negatives and it can get very stressful. People often overlook things like times of vacancy, residents who don’t pay rent, and maintenance issues.
Real Estate provides no shortage of opportunities for stress.
We see all kinds of issues day in and day out with our properties. Anything from roof issues to plumbing issues, bad residents, and many many more. So how should you deal with stress when managing your rentals?
Our suggestion? Don’t let this hold you back. There are negatives to the rental investing game, but it’s helpful to keep this in mind…
The key isn’t to avoid stressful situations, it’s to learn how to best manage them.
We want to help. In this article, we lay out 5 ways you can manage the stress of owning rental properties.
Some of these may sound like common sense, but common sense is not always common practice.
Table of Contents
Number one is getting enough sleep.
Typically, we’ve found that when we don’t have enough sleep, we don’t make very good decisions. We all have a certain amount of willpower during the day, and certain things take their toll.
Things like making tough decisions, avoiding temptation, and getting mentally drained are all kinds of things that tax our willpower.
By the end of the day, if we are tired and worn out and don’t get enough sleep, we make poor decisions. These decisions could affect relationships with residents, property managers, and everyone else in your day-to-day life.
Step 1: Get a good night’s sleep.
Be sure that you are prioritizing different ways to stay healthy, like:
Overall, health is vital in managing stress. Working out, eating correctly, and getting enough sleep will play a role in managing stress.
If you are healthy, the times where rentals are causing issues will be easier to deal with.
Step 2: Be healthy.
Point number three in stress-free property management is having a long-term view of your rental property in mind. Go into the investment or rental period with a long-term vision for what you are looking to accomplish.
Things are going to fluctuate with time. Prime examples of this include having a resident that moves out or going and repairing a house. If you had a resident for a certain amount of time, it could take anywhere between $2,000-$6,000 to get the house back to being rent-ready.
If that is the case, you will be under a lot of stress due to managing contractors, renting the house, etc.
So, always playing the long game is key to not getting caught up in the short-term stress and making short-term decisions. Understand that rental property investing is a long-term play.
It is equally essential to save money during good times. Putting money away to be prepared for future maintenance and move-out processes will save you a lot of stress in the end.
Step 3: Keep the long-term goal in mind.
Next, you will want to be able to roll with the punches.
We recognize that this is easier said than done. When you have a difficult situation with a resident, you need to understand that this is a part of owning your property.
We say this all the time because it is so important to understand. When you own rental property, you are in business. This is not a hobby; this is a business. There are many things that go into that, and learning to roll with the punches is one of them.
Being emotional is not the best way to own a rental property. The antidote? Be objective and roll with the punches!
Step 4: Roll with the punches.
The last tip to stress-free property management is to have a solid team around you.
If you are a landlord doing it yourself, you want to make sure that you have your own CPA. Also, make sure you have a good attorney, a set resident screening process, and a good understanding of how to screen according to your local and federal laws.
These things are very, very important.
But why hire a CPA? As a property manager, you want to avoid doing your own taxes. Although you might pride yourself on being independent, unfortunately, this is where mistakes can be made.
More than likely, you are not qualified to do your own taxes. Rather than taking the risk and potentially costing yourself thousands upon thousands of dollars, seek out refuge from the experts. Avoid expensive problems by hiring an experienced CPA who works with real estate investors specifically.
If you consider hiring a property manager, having a good one is critical to building your team.
You might be on the fence about whether or not to hire a property management company, but a good rule of thumb is if you have a full-time job, you should seek professional help. A property management company can be incredibly beneficial to you and save you time and money with things such as:
A property manager, a CPA, an attorney, a solid contractor, lenders, an investor-friendly agent; all of them together can help you so that you are not doing it on your own.
But, before you go out hiring a team of your own, make sure you conduct thorough research on every individual you bring on. Without careful screening of these individuals, you could potentially be costing yourself a lot of money later down the line.
Suggested Reading: 23 Questions to Ask Before Hiring a Property Manager
Step 5: Build a solid team.
By following these five simple steps, you will be headed in the right direction of stress-free property management. Remember that while most of these steps, if not all of them, may seem like common sense, actually living them is what will be the most beneficial to you in the long run.
Ready to take action today? Here are 3 ways you can right now:
Spencer is the VP of Marketing at Evernest. He wakes up with Google and Facebook on his mind. Having bought and sold over 150 homes in Birmingham, Spencer gets a kick out of helping new and seasoned investors navigate the mistakes he made as an investor. Spencer is also passionate about his love for Michael Jordan and does his best to explain to the Millennials (who never saw him play live) how much better he was than LeBron. He loves to hang out with his wife, kids, and the world’s best black lab, Jett.
Start the conversation!