What to Hate about Owning Rental Properties

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I’d be amiss if I only ever told you the good things about real estate investing. Not to be cliché, but if it were that easy, everyone would do it. And whether it’s easy or hard, the other reality is that it does come with things that some people just flat out aren’t going to want to deal with. In those cases, no return is worth the hassle in their minds.

Trust me, I get it. I’ve had moments where I’ve been more than ready to throw my hands to sky (middle fingers up) and call it quits. But that’s just par for the course; it comes with the territory of investing.

So, taking the pretty roses away from the picture of how great and profitable rental properties can be, I’m going to just be blunt with you and tell you the parts of rental properties that I personally detest the most. I occasionally have to remind myself, when I’m frustrated by these things, how infrequent those frustrations actually come up… and how much money I make in exchange for them (rental properties can be stupidly profitable!).

I’m listing these in no particular order because they all have fairly equal potential of sucking equally. Also, to help ease the pain of this conversation, I’m going to give you some helpful tidbits with each one on ways you can try to minimize the impact of the problem.

Grab your beer, come sit around the campfire, and let’s roast some rental properties.

Tenants

Tenants can be absolute nightmares. Not only can they be total and utter headaches, but they can cost the property investor a fortune. These expenses can include, but are not limited to: property repairs, unpaid rents, and eviction costs. It seems like it should be easier to collect on damages caused by tenants and any owed rents, but I’ve rarely heard of any rental property owner ever actually being able to collect on those things. At most, maybe they get a judgment against the tenants, but collecting is a completely different story.

Remedy: It’s not guaranteed that this will always put a perfect tenant in your property, but the nicer your property is the better chance you’ll have at finding a high-quality tenant. It makes sense—what high-class person wants to live in a rundown property on a sketchy street? Yes, some of the best tenants live on sketchy streets, and some terrible tenants can move into the nicest properties, but’s about lowering the risk level. When you have a nicer property, the chances are less that you’re going to get that dreadful tenant.

Repairs

Repairs are inevitable on any property, and paying for them sucks no matter how much or little they are. The real rub, though, is when the repairs start to get more excessive. This can get very costly to an investor quickly.

Remedy: The nicer of condition the property is when you buy it, the longer it should be able to go before excessive repairs are needed. Be sure to get a thorough property inspection on the property prior to closing on it so you’re aware of any looming maintenance items. Try your best to stay on top of preventative maintenance items, such as replacing air filters. The better you are at preventative stuff, the longer everything will last. Lastly, back to that tenant issue, try to place responsible tenants who will help take care of your house. Don’t be fooled by landlording naysayers—good tenants do exist. You just have to find them.

Contractors

When a repair is needed on a property, assuming you don’t know how to fix it yourself, you have to hire a handyman or contractor to do it for you. I don’t know if you’ve worked with contractors lately, but they can be incredibly frustrating to work with. They say when they’ll come so you clear your whole schedule, all for them to no-call, no-show. They can overcharge you. They can take forever to get the work done. They can do the work wrong. You name it… hiring workers to help with repairs can be painful.

Remedy: Similar to repairs, the best mitigation for having to constantly deal with obnoxious workers is to minimize how often you need them. Additionally, if you can spend some time really scouting out good handymen and contractors to have as a go-to, life can get tremendously more enjoyable when you have a repair you have to deal with. When you find these people, make sure to express your gratitude for them and make them happy that they’re working with you. It’s not just about whether you like them or not; they need to like you too! A good handyman or contractor is worth their weight in gold when you can find them, so treat them well so they keep coming back.

Property Managers

Honestly, it’s a toss-up between which is worse, a bad: tenant, contractor, or property manager. All of them… all of these humans… can really ruin your day. The good news is that they’re all replaceable. The question then is how much damage do they do financially to you before they’re replaced?

The particularly painful thing about property managers (the bad ones) is how far the problems can trickle. If you have a bad property manager, they can: place bad tenants who cost you a fortune, overcharge on repairs, not fix repairs that turn into something bigger later, let you property sit vacant unnecessarily, and the list goes on. It’s not just one expense aspect at that point; it’s a whole bunch of things that can add up quickly.

Remedy: You first need to be keeping an eye on your property manager, and at the first sign of trouble, be ready to take action. If the required action is to fire them and hire a new one, be willing to do that. Don’t waste time convincing yourself they’ll get better or you run the risk of costly expenses building up during that time that you’ll be responsible for later. If you need help firing and hiring property managers, watch How to Fire a Bad Property Manager and Hire a Good One.

Don’t get me wrong, not all tenants, contractors, and property managers are terrible. There are some absolutely fantastic ones out there! Same with repairs—there are many properties out there that experience very little repair need outside of normal maintenance. The only reason I present these things in the doom and gloom fashion that I did is so you are in fact aware that rental properties aren’t all roses and rainbows, and hopefully it’s impactful enough to prompt you to stay on your toes about these things throughout your time as a rental property owner, so hopefully you can catch problems before they get too big.

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