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
- Rental Property Investor · Youngstown, OH · Member since 2023 · 128 posts · 124 votes2y
A good, hefty repair/capex budget is how I handle RE stress lol.
Now I failed high school math 3 times, but...
$45,500 spent over 20 units in the span of a year comes to be $2,275/unit.
If you had an adequate repair/capex budget in place, you should've been fine. For example, if you were setting aside $200/mo per unit, that's $2,400/year for each one, or $48,000 total. Would've nearly wiped out your budget, but you wouldn't have had to break a sweat with concerns.
Even if you were setting aside $150/mo per unit, that's $1,800/year for each one, so a total of $36,000. You'd have a deficit, but I would imagine (and hope) with 20 units you'd cash flow enough to be able to cover it, and then... ideally... you won't have to worry about replacing at least 4 of those roofs in the near future, so less capex expenses to worry about lol.
Consider this an expensive lesson and make (and stick) to a good repair/capex/emergency budget, or... if you're going to hate RE regardless... just hire a PM... but make sure that's in the budget, too lol.
- Investor · Fort Lauderdale, FL · Member since 2020 · 1k+ posts · 755 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 feel you to an extent though I am not nearly as stressed with only 10 tenants and things are mostly good so I don't have much in the way of complaints/issues. I don't know if it is really worth getting more doors for me but I am always in the hunt for a good deal. I don't have kids or any major expenses and have plenty of time for vacations so life is good. It sounds like maybe you are doing too much and need to diversify your strategy a bit. You could always hire a PM too but I know it is giving away a lot of money too. Just breathe and hope the rest of the years goes better haha.
Recently, I started getting into private money lending for flips mostly in the Orlando area but for some other ventures as well. It is certainly a lot less headache but of course, there is a little bit of risk to it. I will say that the returns are a lot better and it is nice that the money is liquid in case I have do have some major expense like a roof or AC pop up. Last year, I had to unexpectedly remodel a unit after a tenant trashed it but it led to me meeting an amazing contractor who I will be working with on future projects. - Member since 2019 · 7k+ 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.
in contrary to popular opinion, if you follow biggerpocket opinion you would lose money, so I do reverse of bbiggerpoeckets :
1. invest for appreciation
2. buy in california only, do flips, do BRRR
3. focus on quality not quantity.your problem is you purchase non-appreciating asset with leverage for cashflow.
What I do is I purchase appreciation-asset with leverage with little cahflow for appreciation.
And I do not collect rental property.
I collect primary, when it's sold, it's tax free.invest in real estate, but do not follow bigger pocket advice blindly, you would lose money, lol
- 2yNicholas L.Pro MemberFlipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
appreciate your perspective on these issues. honestly i think a lot of folks just aren't honest about what things cost. i see a lot of pretending that capex is some kind of expense that lives in the sky and isn't associated with a specific property. in my little portfolio, i have properties that i have genuinely made 'cash flow' on - where i just haven't had to replace the HVAC on and have had little vacancy or turnover. i have others i've 'lost money' on - but they've still appreciated and provided tax benefits. so i am coming around to your way of looking at it.
- Member since 2019 · 7k+ posts · 4k+ votes2y
Quote from @Nicholas L.:
appreciate your perspective on these issues. honestly i think a lot of folks just aren't honest about what things cost. i see a lot of pretending that capex is some kind of expense that lives in the sky and isn't associated with a specific property. in my little portfolio, i have properties that i have genuinely made 'cash flow' on - where i just haven't had to replace the HVAC on and have had little vacancy or turnover. i have others i've 'lost money' on - but they've still appreciated and provided tax benefits. so i am coming around to your way of looking at it.
these problems are very common actually (HVAC stolen/roof issue in midwest). Good thing with expensive property like @jason mentioned is that the appreciation per year basis is rising faster than expense cost.
Also home in CA does not require HVAC, so it can't be stolen. Tenant in CA is also always always more credible.To cut the story short, my buy box is buy in area where DOM < 10 days, avg price > 700k. I would rather have two 700k SF than 14 100k OOS SF in semi-rural midwest that appreciate very little.
one better invest for appreciation for RE asset.
For cash flow I could use stock market. - Developer · New York City, NY · Member since 2015 · 812 posts · 718 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.
We manage over 400 of our own units. Some days, it's not so bad; others, it's a grind. It comes with the profession. I'm not sure if you can PM successfully, whether your property or others, part-time. Something has to give: your RE side hustle, your regular job, or your family. It's probably best to protect your family and your regular job. Do yourself a favor and turn over the portfolio to a trusted PMC.
If you do decide to do this, stay away from the franchise ones; they're usually garbage (Real Property Management and PMI. Go with an independent firm. - 2yJoshua ChristensenPro MemberReal Estate Broker · Albuquerque, NM · Member since 2015 · 281 posts · 232 votes
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.
Andrew, you bring up some very real and raw issues regarding REI that many don't talk about. Unfortunately, there are too many courses out there teaching Real Estate for passive income and cash flow - Quit your job...blah blah blah. They don't always teach the business side of real estate which is what you're experiencing.
It sounds like you set your REI business up as a Solopreneur where you not only have another full time job and family, but you're the maintenance, leasing agent, manager, project manager and etc. You have too many full time jobs going on. Of course you're stressed. Then to add insult to injury, you get hit with multiple large CAPEX items at the same time.
Let's look at some solutions. Your business is at capacity. 1. You can hire someone full time to work at $20+ per hour - $800 per week or $3200 per month (simple calc. not accurate). or 2. hire a Property management company who provides multiple employees to cover your asset for 10% or less per month which probably works out to less than $2500 per month. They report directly to you. You have to manage them, but they are now your "Staff" to take the stress off your shoulders.
Is $30k a lot per year? Sure it is. What's the cost of never being present with your kids or wife? Priceless? Did you get into real estate to create margin and freedom in your life? How's that working out?
Look, smaller properties typically don't create massive amounts of cash flow in the early years. They grow in value, the tenants pay down mortgages increasing equity, you get tax benefits, and there's the appreciation. Depending on leverage, you'll start to experience cash flow years 3+.
As far as CapEx. Most people don't set enough aside for this. They get hit, like you did, when big expenses come along. So, when we buy, we always set aside an account for operating and CAPEX for each property. Monthly, money goes into those accounts. When they are "fully" funded, I may stop adding to them and put that money back into reinvestment accounts to buy additional assets. Always be prepared for worst case scenarios.
A place that could help is on turn overs. Damages can eat up your profits quickly. Rather than doing damage deposits, look into deposit insurance programs like Rhino (only one I can think of off top of my head). The tenant pays a small amount monthly in lieu of a deposit for $5-10k of damage insurance + lost rent insurance in the event of eviction. It can save your budget where as one month of rent doesn't come close.
You have to start thinking about your assets as a business or the stress will eat you alive. It is a hard business that is sexy from the outside and really messy on the inside. Welcome to the game!
- 2yTheresa HarrisPro MemberMember since 2019 · 15k+ posts · 11k+ votes
The average person doesn't have 20 units to deal with. Part of the problem you are experiencing is due to the number of units-more units equals more work. Everything seems to happen at once, so hoping it goes back to being quiet again.
In the big scheme of things it comes down to how long you have the home, the type of home and renter. Most of the money is made by the tenant paying down your mortgage and covering your expenses. The bonus is if the price of the house goes up over time and you also make money from appreciation when you sell.
If you hire a PM, you will bring in less money; however, you will have more time to be with your family. Alternatively, find a good handyman (person) who you can hire for a day each month and get them to go to the units and do minor repairs.
- 2yJoe S.Pro MemberInvestor · San Antonio · Member since 2020 · 3k+ posts · 3k+ votes
Quote from @Chris Rich:
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.
I started putting my rentals with a property manager.
I only have one property I self manage left and they seem to always pay late etc. etc. Interacting with tenants took a lot of my emotion energy and I was not the worlds best screener.
As far as repairs go, you’ll have those whether you self manage or whether you are use a PM so that’s beside the point.
- 2yV.G JasonPro MemberInvestor · Member since 2022 · 3k+ posts · 3k+ votes
Quote from @Joe S.:
Quote from @Chris Rich:
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.
I started putting my rentals with a property manager.
I only have one property I self manage left and they seem to always pay late etc. etc. Interacting with tenants took a lot of my emotion energy and I was not the worlds best screener.
As far as repairs go, you’ll have those whether you self manage or whether you are use a PM so that’s beside the point.
The time and energy is not worth managing, and the liability is for sure not worth it. Liability alone is worth getting a PM.
I wish all landlords, whether it's 1 house or 10, would come to that realization. But it may take a reckoning for them to realize it.
- Member since 2022 · 25 posts · 15 votes2y
@V.G Jason. Why does having a PM mitigate liability? If someone gets injured wouldn't it still come back on the property owner?
- Member since 2024 · 222 posts · 161 votes2y
My current answer is no, the headaches and joys along the way have been well worth it. My wife and I can fully retire any time now. My wife is retired and I'm "semiretired" heavy emphasis on the quotes. We have more than enough equity and reserves to live a comfortable retirement now.
Nothing insane about coming to the exit time. Now it is about working on exit strategies, managing taxable events and making full use of built up tax credits.
The beginning is the hardest time especially when you work through the learning experiences. I also discovered early on that some strategies are more stressful than others. Some ways of doing business are also more stressful.
- Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes2y
Quote from @Andrew O.:
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.
Using the cheapest materials you can find as suggested above is a mistake long term. $30/bundle shingles last about 12-15 years in our climate (Milwaukee), so you'll pay twice for labor. We spend more like $60 on a quality dimensional shingle. By the time you add in ice&water shield, vents and supplies, you are close to $250 / square in materials alone. And yes, we always to full tear off. And new flashing. And sometimes new gutters (and replace any rotten facia boards). There is a cost to doing things right.
But that's in the nature of capex, you are upgrading your assets. We replace 3 driveways every year, we started with the worst and working our way through.
But maybe you don't have to replace four roofs this year. You can usually stretch it another 3-5 years with some selective repairs. Roofs never start leaking on flat areas, its always penetration points or valleys. So pick the better roofs of the four, get someone up there with a bucket of sealer, roofing caulk, if necessary a few bundles of shingles and patch it up until you have the funds to do a full tear off replacement.
20 is a lot to manage part time, I have pushed it to 30 while I still had a corporate job with a lot of travel. A lot of stuff does not get done, you are forced to prioritize. Not always a bad thing. And nobody will watch your money like you do, not even the best PM. But maybe time to think about getting a part time help to run errands, do showings etc.
- Member since 2022 · 186 posts · 192 votes2y
I only have one sfh right now. We put all we had into it. I work seven days a week and 12 hours a day most of the time. I would work from 3am- 3pm then renovate house from 3:30-6:00 most days. My wife and have never argued so much. When we finally got place on market on the first two months we responded to probably 5 calls with 3 of them ghost calls for nothing. We questioned what we got our selves into. Our greatest fears were coming true. Fast forward 1.5 years our tenant has been cool. We are making some money. My wife is even encouraging us to look at another property. We are so small but we still questioned our sanity more than once. What you have goin on seems like a lot, that said it seems you can handle the operations part of it, it just appears that you are sweating all that money comin out. Maybe I’m looking at it wrong but whatever money you have to put into it someone else is paying for it. You will recoup your cost. Not saying it doesn’t suck to drop 45k. However you are in a position to be able to do it through loans or cap ex funds. Regardless when the rents hit next month you will be one step closer to getting your money back. You got this. The short term kick in the stomach will be worth it
- 2yV.G JasonPro MemberInvestor · Member since 2022 · 3k+ posts · 3k+ votes
Quote from @Andrew O.:
@V.G Jason. Why does having a PM mitigate liability? If someone gets injured wouldn't it still come back on the property owner?
That's not the only form of liability. Just you engaging with them and making it personal, them asking for favors or push back on rent timing, etc., is the whole other side. Liability created is more than just home ownership, it's also you making your own repairs, negotiating leases incorrectly, not fixing things in a timely per the county/state rules, etc., Too much of that kind of exposure.
- Member since 2024 · 16 posts · 3 votes2y
Andrew, this is a common headache in the industry. There are other people in the same boat, do not think you are alone on this one. Also, do not make any irrational decisions off a whim. You play with the idea of selling or at least exchanging, why not get a property evaluation going? Why not look into other RE avenues like DST's, REITS, NNN...?
I appreciate this post because for the last 5 years I've been seeing a lot of "Passive Investment" Talk when it comes to mulit family investments. This post gives you a window into how much work goes into managing/owning a portfolio yourself. @Andrew O. Would love to connect with you and go more depth on how these properties are operating for you and other avenues you are interested in.
- Rental Property Investor · San Francisco Bay Area · Member since 2022 · 1k+ posts · 1k+ votes2y
I don't know how you manage 20 units with a full-time job and a family. I have to applaud you for your effort.
I have 5 properties/15 units (4 SFHs with 1 local, 3 out-of-state and one 11 unit local with co-owners). The only one I self manage is the Bay Area SFH and that's because I'm renting to family members. All the others have property managers. I think it's well worth the PM fee for the stress factor.
Over $45,000 for roof repairs, AC unit and raccoon damage in an attic? Replacing 4 roofs at one time is a lot. Like Marcus said, can you stretch out those replacements out over a few years? I'm not sure what part of the country you're in but my Indy roof replacement was $9397 for a small SFH. I got estimates for over $12,000. I'm not sure how long I'll keep this property so didn't want to keep pouring money into it.
Echoing what Carlos said, I'm now of the mindset of owning fewer higher quality properties than acquiring doors, fewer cap ex items, tenant issues, PM fees, etc.
If you can't find a reliable PM can you get some kind of help with your properties instead of doing all of this on your own?
- 2yMekkel BlanchardBusiness MemberRealtor · Taunton MA · Member since 2018 · 39 posts · 20 votes
Hey, Sorry to hear all of those expenses are coming at once. I think when anything involves people it will always involve some stress! I currently own 13 units and have had my share of stressful moments but over time building experience and connecting with those who have been through what your going through is very valuable. If you have a rolodex of people that you can call for advice and referrals is huge. It has also been good to set aside capEx expenses so that you are not scrambling for money when issues arise. It sucks now but it will be a learning experience and ideally you will not make the same mistake going forward! Good luck, and keep buying real estate!
- Realtor · Cleveland, OH · Member since 2023 · 340 posts · 215 votes2y
Hi, great conversations I just came by to tell you that I am an Ohio Realtor and if you have any questions, please give me a call. Thanks!
Regina Blake- Ohio Realtor
- Investor · Member since 2021 · 591 posts · 695 votes2y
@Andrew O. having only A and B grade properties with highly qualified tenants makes a huge difference.
As you probably know, the amount of effort to manage an A grade property is a small fraction of how much effort is required to manage a C or D grade property.
Also, over the years I've greatly refined my systems for tenant screening/management/turnover, and this has significantly reduced my workload.
...and as others have mentioned, we're lucky to have these types of problems--keeping that in mind is always useful.
Good luck out there!
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