Does owning RE question your sanity?
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Jonathan GreeneBusiness Member
Real Estate Consultant · Madison, NJ · Member since 2016 · 6k+ posts · 7k+ votesYou bought too much without the correct why. Read this again, "Owning RE sucks. I own and manage 20 units all on my own while working full time with a family." Why do you own 20 units and manage them all full-time? You probably are either not doing well at your real job, not doing well managing, or not doing well with your family, or unfortunately, all three. What's your why? If it's passive income, that's not landlording as you have found out.
Why not sell all of the properties if you hate it and bank the money and consider other real estate adjacent opportunities like syndications and take your family on a nice vacation?
45 Replies
- 2yJake AndronicoBusiness MemberRealtor · Reno, NV · Member since 2019 · 1k+ posts · 938 votesSelf-managing 20 units sounds like a lot. I appreciate this post because a lot of people leave out this important element in RE investing.
Quote from @Andrew O.:
Good afternoon,
I was just curious how everyone handles the stress of owning rental properties? Owning RE sucks. I own and manage 20 units all on my own while working full time with a family. This past year has been rough with maintenance issues and things breaking, and right when I start to think things are getting better, I have to replace 4 roofs (1 is just a carport), an AC unit gets stolen, and a racoon destroyed an attic. From all the quotes I've gotten, that's going to cost around $45,500 and it all needs to be done asap. I don't know how the average person could afford this. I'm not sure how I'm going to pay for it all quite yet either. I'm in RE for the long game, but I don't understand how people make money off of rental properties. It is always one thing after another.
The headache factor.
It's a long term game, but it does require being active (especially in the beginning). The more I work with larger investors, the more I understand why they are willing to take a smaller return for less headache.
Unpopular Opinion/Question: What if you just sold these and paid cash for newer properties?
You will not make as much, but if you're "making more" and it sucks, why continue that way? - 2yJonathan GreeneBusiness MemberReal Estate Consultant · Madison, NJ · Member since 2016 · 6k+ posts · 7k+ votes
You bought too much without the correct why. Read this again, "Owning RE sucks. I own and manage 20 units all on my own while working full time with a family." Why do you own 20 units and manage them all full-time? You probably are either not doing well at your real job, not doing well managing, or not doing well with your family, or unfortunately, all three. What's your why? If it's passive income, that's not landlording as you have found out.
Why not sell all of the properties if you hate it and bank the money and consider other real estate adjacent opportunities like syndications and take your family on a nice vacation?
- Member since 2022 · 25 posts · 15 votes2y
@Jake Andronico I've considered selling, but all of these houses I've already gutted, fixed up nice, and have good tenants. Once the roofs are done, there shouldn't be much else that can be major. I've also never BRRRR'd any of the properties either so if I absolutely had to, I could cash out and pay for the expenses that way. About 8 or 9 units I'm locked in around 2.75% interest rate so I'm trying to avoid that.
@Jonathan Greene When I got into RE I knew it wasn't going to be passive. I wanted the additional income in hopes of doing this full time, or at least retire from my main job early. I'm lucky to have a job where I can start early and be off at 3pm everyday with no weekends and I can pretty much take off whenever I need to. 20 units is just an awkward phase where I don't think it's worth having a property manager, but it's also getting to be much managing on my own. I fix my units up nice when I purchase them so I don't get too many calls, but sometimes luck just isn't on your side.
I think about selling all the time, but I don't quit that easily. I've opted to vent my frustration on BP and suck it up for another year, then see where things are at. How much worse can it really get? A vacation would be nice though!
- 2yMichael SmytheBusiness MemberReal Estate Agent · Metro Detroit · Member since 2023 · 4k+ posts · 3k+ votes
@Andrew O. we all get a 15 minute pity party once a week.
Yours is NOW OVER:)
It may help to look at how much the value of your portfolio has increased:)
Solution time!
Either suck it up, sell or hire a PMC.
Logical Property Management4.9453 Reviews - Member since 2022 · 25 posts · 15 votes2y
@Michael Smythe Haha I feel a little better today but I agree, it's time to suck it up. I just have to think long term. The portfolio increase is definitely nice and it'll only continue to get better!
- Real Estate Broker · Northeast PA · Member since 2017 · 2k+ posts · 2k+ votes2y
@Andrew O. you are so fortunate to have these 'headaches'. Remember these famous words: "If it was easy, everyone would do it!"
I'd keep in mind that real estate is cyclical, and we won't always be in such a strong market. If you can't handle the stress of growing (too fast?) what will you do when SHTF?
Pay attention to @Jonathan Greene; slow down, sell a couple, two-three, take a deep breath, take the family on a vacation, and regroup.
If we're in this game long-term, slow and steady growth with a lower cortisol level will beat explosive growth with high blood pressure levels every time. Have some fun with it and count your blessings.
Good luck, keep investing and moving forward. (Perhaps a bit more slowly?) LOL.
- Developer · St. Augustine, FL · Member since 2018 · 311 posts · 384 votes2y
Anyone in your situation is gonna feel bad. It just happened that you are in a bad situation right now. As long as you get through it, it's gonna be better.
Slowly build up your cash reserve and equity. Be frugal.
Right now I'm in a position where I barely hear from my tenants but collecting monthly rent. I self manage 30+ properties and I can double the volume before I hire a full time PM. If things break down from one property, I just call the right vendor/contractor to fix the problem and pay the cost. If roof needs to be replaced, I call the roofer I trust and replace the roof. 90% of my tenants renew their lease every year. I do maybe 3-4 tenant placement a year and that's actually real work. Other than that, my LTR properties are pretty hassle free.
50% of my rental properties are new constructions I built so I control the qualities. I usually sell out the old ones and build new ones. That's why I'm not the investor who chase the "number of doors." I like to own high quality, high profit margin, low maintenance rental properties.
- Member since 2022 · 25 posts · 15 votes2y
@Marc Winter. That's true! There's a lot of people on social media that makes it sound like owning RE is a walk in the park. They either don't know what they are talking about or trying to sell their book lol.
I think SHTF already lol. I don't mind getting no heat/no ac calls, plumbing leaks, section of a fence blows over, etc. I wasn't prepared for reroofing 3 houses and a carport all within a week or two. That's a little more catastrophic.
I agree, slow and steady growth! I'm going to get past this month, take some time off from purchasing new properties, and regroup! I might have to skip the vacation this year, but early next year would be nice!
- Member since 2022 · 25 posts · 15 votes2y
@Ke Nan Wang. That's awesome you self manage 30+ properties. That was initially my goal to hit around 30-50 properties. I wish I could build new construction and rent them out, but I'm in a market where the sweet spot for rent is around $1,000/mo so there's no way to make the numbers work on a new build. Usually when I purchase a property I buy them in distressed and gut the inside. I do a lot of work myself to help cut costs, but I was single when I bought the majority of my units so it's a little more tough now lol. I'm in the same boat as you though where showing the properties is the most work I usually do on my existing rentals. When I do get calls, it's for no heat/AC, roof leaks, or maybe a sewage stoppage. I agree though, the quality of doors is more important than the number of doors. I think a lot of the people that chase the number of doors are more of the slumlords that don't care.
- Rental Property Investor · Honolulu, HAWAII (HI) · Member since 2011 · 4k+ posts · 2k+ votes2y
Hey, sorry you're going through this. I totally get it. Back in 2015, I had 11 rental properties myself.
(5 in Atlanta, 1 in Indy, 4 in Birmingham, and one in PA)
And yeah, the same issues here. Every time a tenant moved out 3 out of 8 evictions or so, it felt like a gamble, with someone leaving the place in ruins. The cost to fix everything? Could easily hit $30,000. It's enough to make you question everything, not just about people, but about the whole rental game. It certainly made me rethink my strategy, after seeing my profits disappear.
If you're an accredited investor, I'd say it's time to change course. It's what I did and what I've seen many in our circle do to move up to syndications and private placements is the way to go.
As a limited partner in these deals, you're not dealing with the day-to-day. No debt in your name. No legal headaches. And definitely none of that BS.
I would sell the properties on roof stock to a new investor. - Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes2y
Quote from @Andrew O.:
Good afternoon,
I was just curious how everyone handles the stress of owning rental properties? Owning RE sucks. I own and manage 20 units all on my own while working full time with a family. This past year has been rough with maintenance issues and things breaking, and right when I start to think things are getting better, I have to replace 4 roofs (1 is just a carport), an AC unit gets stolen, and a racoon destroyed an attic. From all the quotes I've gotten, that's going to cost around $45,500 and it all needs to be done asap. I don't know how the average person could afford this. I'm not sure how I'm going to pay for it all quite yet either. I'm in RE for the long game, but I don't understand how people make money off of rental properties. It is always one thing after another.
Why are you involved with the " day to day" ? I have let's just say a few more then you and live on the beach in FL. while my PM handles it all in Cleveland. My phone never rings, well once in a while. Also, with 20 units why do you still have a full-time job? I would think 20 units would net about 10k -15K a month at least. Also, you need better contractors. We get our roofs done for 225k a sq. avg roof is 25 sq, so about 5k. Also, when buying and getting it rent ready, we replace roof, furnace ( 1200 bux ) and other costly items so they are good for 15 years or more.
How do we make money? All in SF 80k, full reno, rent 1300. All in Duplex, 85k 900/900 or more rent. , 7 UNIT, all in 230k, NET about 38k,,,,, RE IS ALL about numbers. If you are not making money, then you did not buy correctly. All repairs should have been figured into your PP.
All the best
- Property Manager · Orlando, FL · Member since 2023 · 106 posts · 64 votes2y
Quote from @Andrew O.:
Good afternoon,
I was just curious how everyone handles the stress of owning rental properties? Owning RE sucks. I own and manage 20 units all on my own while working full time with a family. This past year has been rough with maintenance issues and things breaking, and right when I start to think things are getting better, I have to replace 4 roofs (1 is just a carport), an AC unit gets stolen, and a racoon destroyed an attic. From all the quotes I've gotten, that's going to cost around $45,500 and it all needs to be done asap. I don't know how the average person could afford this. I'm not sure how I'm going to pay for it all quite yet either. I'm in RE for the long game, but I don't understand how people make money off of rental properties. It is always one thing after another.
Sorry to hear you are having such a rough time Andrew. 20 doors is definitely not a small portfolio, so things are bound to happen. I would just remember that it is cyclical. If you have generally good tenants who pay on time, that's the biggest hurdle. Be thankful for that, handle these challenges now, and remember why you are doing it.
One day you will look back and be glad you powered through it.
- 2yAlecia LovelessPro MemberMember since 2019 · 3k+ posts · 2k+ votes
@Andrew O. My vote is whatever you do DON’T QUIT.
I started in Real estate investing when I was 21 and ended up quitting at age 24 because of some hard luck. I got back in at age 44. The bug never left me the whole time in between. I’ve always loved real estate. If I hadn’t of quit I’d likely be worth about $20M today given the way my local market went during the intervening years and the different opportunities I had.
If you just aren’t enjoying managing your property anymore put it with a property manager and be done with it.
But keep it for the long run you’ll be happy you did in 20 years. Trust me.
- Member since 2022 · 25 posts · 15 votes2y
@Bob S.. I wish I netted $10k-$15k haha. I haven't seen any properties net $500-$750/door. Maybe if they were all paid off I could. On average I probably net $350-$400/door (that includes my mortgage - I've seen some investors not include their mortgage payment when calculating cash flow). I'm replacing one roof now that is 26 sq and the bid was $12,350. I'm not sure how you can get it done for $5k, I don't think that would even cover the cost of materials here. Same for a furnace, that would easily cost $1200 in just material.
I make money on the properties I have rented, I think I just grew too fast. The costs of renovating the new properties is more than what I'm getting from rent in the others.
- Member since 2022 · 25 posts · 15 votes2y
@Chris Rich. Thank you. I do have good tenants that pay on time and all units are rented currently. I just need to get past this month and start building my reserves back up.
- Member since 2022 · 25 posts · 15 votes2y
@Alecia Loveless. Wow, that would have been an awesome investment! You must live in a booming city! I'm in a population of about 110k and it's just maintaining. Majority of adults are state/city employees so income is steady, but there's not a lot of people moving here. Houses definitely won't appreciate much here, if I held on to them for 20 years I'd estimate they would only be worth $100k more than what I paid for them. It's hard saying though.
I don't mind managing the properties. I really don't get too many calls. I'm mainly just stressed about having to replace all of these roofs at once. I know a lot of people don't agree with paying mortgages off early, and I'm not fully convinced it's a good idea either, but I'm at the point where I'm not sure if I want to continue to expand my portfolio and so I wanted to at least pay off a couple properties, but that will have to be pushed back until next year.
Hopefully in 20 years I'll still be doing it! I can't sell these houses at full price with a leaky roof so I'm going to have to replace them regardless. Might as well ride it out and see how things go from here!
- Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes2y
Quote from @Andrew O.:
@Bob S.. I wish I netted $10k-$15k haha. I haven't seen any properties net $500-$750/door. Maybe if they were all paid off I could. On average I probably net $350-$400/door (that includes my mortgage - I've seen some investors not include their mortgage payment when calculating cash flow). I'm replacing one roof now that is 26 sq and the bid was $12,350. I'm not sure how you can get it done for $5k, I don't think that would even cover the cost of materials here. Same for a furnace, that would easily cost $1200 in just material.
I make money on the properties I have rented, I think I just grew too fast. The costs of renovating the new properties is more than what I'm getting from rent in the others.
Sorry yes, I was assuming they did not have a loan. All mine have always been free and clear So netting 800- 900 per or more (on Duplex) is realistic. Materials for a roof are about 100-120 MAX(HD always has sales, 30 a bundle 3 bundles for a sq) per sq. So, 220 a sq gives my guys not less than 100 per sq for labor, done in one day so they make 2500ish in a day, two guys. 460 per sq is INSANE, and a total rip off. Not sure where you are but that is ridiculous. But then again, when I lived in SC we paid 500 per sq, ( 55 SQ do the math, OUCH ) NO other choice they ALL ripped you off LOL
Furnace 80k BTU 700 bux material at HD. We buy from a local supplier and get then for 600 with all, 500 to install, takes 3 hours.
All the best, keep up the good fight :)
- 2yV.G JasonPro MemberInvestor · Member since 2022 · 3k+ posts · 3k+ votes
Physical asset investing isn't for the faint of heart. Hence, why I preach quality over quantity less overall capex/tenant issues and likely better locations. Not always true but more than likely will be.
Those stresses you mention don't stress me, but I underwrite the worst case for everything and keep reserves way more conservative than 99% of folks and definitely BP "investors". I've learned from previous experiences of letting go, having systems in place to manage efficiencies, creating a liability barrier, and rewarding the teams that do it properly.
- Member since 2022 · 25 posts · 15 votes2y
@Bob S.. Ahh that makes a lot more sense. That must be nice to have them all paid off! I have 8 loans locked in < 3% for 15 years so I don't mind having loans on them. The others I've been debating about paying off early.
The roofer is actually charging $475/sq. All the big names charge that much at least. I have a friend, well more of an acquaintance, and he gave me a number of a roofer who is supposed to be good and reasonable. I'm scared to go with individual guys though, the first time I did that the guy showed up drunk and high and did a poor job on the roof. Ended up having to have a portion of it replaced a few years later.
I'll have to start looking around more though for my contractors. I'd think my market is smaller than Cleveland so if you can get those prices I should be able to as well. I've just used the guys that were recommended to me from other local investors and realtors.
- Member since 2022 · 25 posts · 15 votes2y
@V.G Jason. I agree, quality is definitely better than quantity. I don't think old roofs would be a deterrent though to purchasing a home if the price is right.
Once you have the system down and a big reserve the stresses go away. It just all happened at a bad time and trying to pay for everything at once is going to be a struggle. My reserves were big enough to cover 2 roofs, but not sure how I'm going to pay for the rest yet.
- 2yNicholas L.Pro MemberFlipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
hire a property manager! =) i have 8 rentals and i just self-manage 1. there's no threshold you have to hit before you are entitled to one.
- Member since 2022 · 25 posts · 15 votes2y
@Nicholas L.. There's not any good PM companies here unfortunately. I've heard nothing but horror stories. I don't mind fielding the calls as I don't get many. My issue is the big expenses as of late. It's taken a huge hit on my emergency funds. I didn't think I'd have to replace 4 roofs at once.
- Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes2y
Quote from @Andrew O.:
I'm in RE for the long game, but I don't understand how people make money off of rental properties.
Appreciation (forced and organic)
- Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes2y
Quote from @Andrew O.:
@Bob S.. Ahh that makes a lot more sense. That must be nice to have them all paid off! I have 8 loans locked in < 3% for 15 years so I don't mind having loans on them. The others I've been debating about paying off early.
The roofer is actually charging $475/sq. All the big names charge that much at least. I have a friend, well more of an acquaintance, and he gave me a number of a roofer who is supposed to be good and reasonable. I'm scared to go with individual guys though, the first time I did that the guy showed up drunk and high and did a poor job on the roof. Ended up having to have a portion of it replaced a few years later.
I'll have to start looking around more though for my contractors. I'd think my market is smaller than Cleveland so if you can get those prices I should be able to as well. I've just used the guys that were recommended to me from other local investors and realtors.
I get it, think about it, About 365 per sq labor 26sq , there making about 9k for ONE day job. Two guys, if they only do 1 job per week, 468k a year working ONE day a week, Hey want to open a roofing co LOL
- Rental Property Investor · San Diego, CA · Member since 2013 · 3k+ posts · 4k+ votes2y
Quote from @Andrew O.:
Good afternoon,
I was just curious how everyone handles the stress of owning rental properties? Owning RE sucks. I own and manage 20 units all on my own while working full time with a family. This past year has been rough with maintenance issues and things breaking, and right when I start to think things are getting better, I have to replace 4 roofs (1 is just a carport), an AC unit gets stolen, and a racoon destroyed an attic. From all the quotes I've gotten, that's going to cost around $45,500 and it all needs to be done asap. I don't know how the average person could afford this. I'm not sure how I'm going to pay for it all quite yet either. I'm in RE for the long game, but I don't understand how people make money off of rental properties. It is always one thing after another.
I started my RE journey while I had a full time job. I got to about 150 units before doing RE full time. Best decision I ever made. I now have 2000 units and a team that allows me to focus on just the parts I enjoy (mostly the deal making)
I don't see anything I could have ever done that would bring me as much income and wealth.
It doesn't question my sanity. What I question is the sanity of those who want to jump in, but after years of tire kicking, never take that first step.
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