Landlording & Rental Properties

Low-Stress Landlording—Yes, It’s Possible!

Expertise: Landlording & Rental Properties, Real Estate Investing Basics, Personal Finance, Real Estate News & Commentary, Business Management, Real Estate Deal Analysis & Advice, Real Estate Marketing, Mortgages & Creative Financing
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If you’re looking for a job that’s stress-free, your best bet might be to find a gig where you crunch numbers in a cubicle and don’t have to deal with people. But heads up, jobs like that can get old quickly.

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Landlording is pretty far on the other end of the spectrum. It’s definitely not a stress-free job, but it doesn’t have to be overwhelming.

If you understand what stresses you out and develop a plan for mitigating those factors, you can carve out a successful career as a real estate investor/landlord—and genuinely love what you do!

Major Causes of Stress

Your personality and other situational factors will dictate the level of stress you experience as a landlord. If you’re anything like most people, you’re likely to be impacted by the following:

  • Poor cash flow. Nothing is more stressful than dealing with cash flow problems and wondering if you'll be able to pay the mortgage, taxes, and bills to keep the property above water.
  • Late payments. One of the biggest frustrations landlords have with tenants is late and/or irregular payments. Not only does it impact cash flow, but it also causes the landlord to waste time and energy tracking the money down.
  • Legal issues. Real estate can be complicated. If you aren’t careful, you could end up in legal trouble for even the simplest of mistakes or oversights.
  • Careless tenants. Bad tenants have a tendency to be irresponsible with a property, causing damage or problems that stick around long after they’re gone.

These are the hot button issues for most landlords. Being able to pinpoint them and wrap your mind around why they stress you out is a good starting point toward resolution.

Related: The Rookie Landlording Mistake Most New Investors Make

4 Tips for Overcoming Stress

Once you know what stresses you out, you can develop a proactive plan for overcoming these issues and finding peace.

Here are some suggestions:

1. Hire a Property Manager

“There are certain relationships in life that function best when there is a third party go-between to separate the emotions and eliminate the pitfalls that can occur when two parties work directly with one another,” explains Green Residential, a Houston-based property management company. “The relationship between a landlord and a tenant is one of these relationships.”

If you want to avoid some of the friction that comes with interacting directly with tenants, hire a property manager. It’s usually worth every penny.

2. Carefully Screen Tenants

Good tenants equal stress-free landlording. If you want the rest of your experience to go well, it all starts with the screening process.

“Screening your tenant means looking into the information they provided, as well as analyzing outside information you can discover, and coming to a reasonable estimate on the kind of tenant they will be,” veteran RE investor Brandon Turner explained in his step-by-step tenant screening guide. “I say ‘reasonable estimate’ because there are no surefire ways to know the future quality of a tenant. As a landlord—it is our job to simply screen effectively and choose the best possible applicant for the property.”

landlord, lease, rental, tenant screening

Turner looks for six specific qualities in a tenant: ability to afford the rent payment, willingness to pay on time, job stability, cleanliness and housekeeping skills, aversion to drugs and criminal activity, and a low stress quotient (how much stress they’ll cause you).

3. Automate Rent Collection

Manually collecting rent—either face-to-face or through the mail—is slow, inefficient, and cumbersome. If you want to limit the amount of effort it takes (and lower the stress quotient) try automating rent collection through an online platform. Better yet, require your tenants to set up direct deposit.

Related: 5 Practical Solutions For Landlords With Rent Payment Drama

4. Keep an Emergency Fund

In an effort to prevent cash flow and money-related stress, you should create an emergency fund for each rental property you own. The fund should essentially be a dedicated cash savings account that has enough money to bankroll your property for three to six months. This will give you something to fall back on in the event of a worst-case scenario.

low-stress, reduce stress, landlord, landlording, rental property, tenants

Above All, Enjoy What You Do

The role of landlord doesn’t have to be daunting. When done right, it can be exciting!

But in order to enjoy the perks of the job, you have to address the pain points that so often frustrate people in your position. Implementing the strategies above will hopefully pave the way for greater freedom and enjoyment during your tenure as a landlord.

Do you have experience landlording? How have you dealt with the stress? Are you apprehensive about landlording-related stress? What are your major concerns?

I’d love to learn from your experience. Comment below! 

Larry is an independent, full-time writer and consultant. His writing covers a broad range of topics including business, investment and technology. His contributions include
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    Christopher Smith Investor from brentwood, california
    Replied over 1 year ago
    I have PMs for all of my properties in all of locations. Actually enjoy managing all my managers quite a bit, and wouldn’t like at all doing what they do (which btw they do very very well). My PMs take about 15% of my bottom line without including appreciation, and between 5% and 10% including appreciation. Since they do 95% of the work, it was simply an offer I couldn’t refuse.
    Dave Rav from Summerville, SC
    Replied over 1 year ago
    Great article. Thanks Larry. I agree with you that we can make Landlording less of a hassle. The methods you suggest are all reasonable. I would like to add on to the section on late rent payments. Possibly even debunk it. Hear me out. So, we all know automation is helpful. But when late payments are an issue, especially recurring ones, this can be stressful if not managed correctly. I was want to demonstrate how I late rent actually doesn’t have a negative connotation with me. Late rent, when managed properly, can generate income. In compliance with state laws, late fees should be charged when applicable. Every time. Don’t get slack. After all, what happens if you let that tenant be late 5 times, then on the 6th episode you wait until 20 days past due and they skip out on paying altogether. Now your not only out that entire months rent, but you have lost 20 days because you didn’t file on them and now have to wait for the the eviction process to play out. Take swift action We charge late fees, with tiering up of fees if it drags on. We also charge the tenants for any eviction fee, plus admin charges to reverse it if they come current on rents. This happens. We once had one tenant reverse 10 evictions. Why would we put up with this tenant you’re probably wondering? Because he actually was a good person, just a bad budgeter (word?). We gave him several opportunities to remedy his poor financial planning but we never could get it right. We even offered to re-write the lease to accommodate but he refused. Pride got in the way. So, each month he paid quite late and averaged $150 in late fees. After the second instance we got it down to a process, so it was stress-free. And financially not too bad either! Something else to consider in cases of late rents is making rent due dates opposite the dates bills are due. That will allow breathing room if rents are later than expected. Helps CF management.
    John Underwood Investor from Greer, South Carolina
    Replied over 1 year ago
    I have many properties and self manage. I have processes in place and keep tenants a long time. It take very little of my time to run the empire. If a problem comes up I text someone who will go take care of it and I pay them. I have 30 seconds in the issue. My tenants pay ACH or put it right in my account. I don’t have a 3rd part getting a fee or accepting payments and adding a delay to me receiving the payment. The most work I do is when I have a turnover and have to screen tenants and have a couple of open house. No one is going to place a tenant faster than me. I will often have a tenant lined up before the person leaving has moved. a PM is going to cost you a month of lost rent and they are going to charge you up to a months rent in fees for placing someone. That is now 2 months worth of lost rent.
    Dave Rav from Summerville, SC
    Replied over 1 year ago
    John, excellent points. Essentially, nobody manages your stuff like you. And I agree you probably outperform the PM on all fronts. Don’t get me wrong I have used PMs, and will likely again in the future. But you better believe I will improve my efforts to manage them. My worst case and experience came with a PM allowing a tenant to stay 3 mos rent-free and in the end we evicted. So, ultimately I lost 4 months time + rents for using this professional. A green back investor could have better managed that property.
    Christopher Smith Investor from brentwood, california
    Replied over 1 year ago
    Unless I have substantial work that needs to be done on a property my PMs typically take less than 2 weeks, often times less than 1 week to replace a tenant and they charge no tenant renewal or replacement/finder fees. But more importantly to me is the liability mitigation service my PMs provide. Many of my properties are in a potentially very litigious jurisdiction with highly tenant favorable laws, so having a pro who has 40 years of tenant screening and relational experience ensures only top flight tenants meet the test and very little that could cause legal liability for me personally in dealing with them occurs.
    Jassem A. Investor from West Point, Virginia
    Replied over 1 year ago
    Self managing is the best route unless you can find a PM that will care more than you do about your properties that also has systems in place to list properties efficiently and minimize turnover costs using in-house staff.
    Jim Kleyman
    Replied over 1 year ago
    In addition to “punishment” for a late payment via added late fees, I “nudge” early/on-time payments with rewards. I give $10 back per month on time with a VISA cash card at the end of the lease – a year’s on-time payments gives them a $120 gift when they leave, or renew, and the nudge has improved on-time receipts. I’m always looking for additional incentives to retain good tenants and get referrals.
    Angelina McEwen from Atlanta, GA
    Replied 10 months ago
    I like this approach!
    Mary E Copas
    Replied over 1 year ago
    Some years ago, we “self-managed” a property that was located a distance away. There were three major issues: 1- property was located in an economically depressed area 2 – no property management companies operated there 3 – even carefully screened tenants at times were irresponsible or had family members who could be unreliable. Renting to non-relatives from two states away without a property manager eventually led us to the decision to sell the property; severe weather damage or other issues need to be resolved right away and even if your tenant supposedly has a very professional job or title, and even income, they won’t report issues (probably because they are violating the lease in other respects, like live-ins or pets, etc.) Anyway, I hope that comment is helpful. Property management is the way to go.