I hate my rentals- should I just sell and be done with this game?

[Tiffany Roberts]

I'm looking for opinions on if I should sell my rentals. I have 5 single family homes and I hate them. They are under quasi-management (long story) and largely I don't have to babysit them, but every notice of an issue makes me hate them more. Most recently a tenant moved out and left the house full of roaches and another one just had an animal in the attic that somehow knocked down the ceiling light in the kitchen. My taxes are overly complicated and worst of all these houses really only break even for us every year. I know these are basic rental type things but I with a full time job and young kids and my own primary home that needs a lot of attention it just all feels like a huge strain to do anything at all for the rentals.

BUT, we have great interest rates on the mortgages, really good tenants, and the rentals won't always break even-- they will go up in value and in rent. My kids won't always be little and needing so much and maybe I'll even get to retire early with the income these houses make. 

Honestly I'm scared that if I get rid of them all now I'll be kicking myself in 10 years for how shortsighted I was. 

Right now though its just so hard.

If anyone has been where I am now with just being fed up with it all and you can let me know how you handled it-- or if you have any sort of perspective you can offer I would really love to hear it. 

[Carl W.]

You say you hate them and hate is a very strong word. But an important one. Listen to your gut. You should not hold on to something you hate simply out of fear of the unknown. Free yourself.

If you're uncomfortable letting them all go, lighten the load and let one or two of them go instead. You might actually find you love the feeling of letting them go and eventually get rid of them all. You can take your money and invest in other ways. Best of luck!

[Doug Smith]

I could have made more money than I do now as a surgeon, but I would have hated it. You have to be happy. Is there a trustworthy property management company you can engage where it would still cash flow. Will you hate yourself in 10 years because of appreciation? Possibly. Have you thought about private lending or buying notes instead? How about flipping? There is a lot you can do other than be a landlord. I'm always happy to jump on a call and talk through things. 

[John Clark]

Quote from @Tiffany Roberts:

I'm looking for opinions on if I should sell my rentals. I have 5 single family homes and I hate them.

How about selling and buying a six-flat instead? Concentrate the agony instead of spreading it around.

[Jay Hinrichs]

in the beginning of your post your talking about bad tenant  issues.. and then you say you have great tenants. If your your tenants are like you stated at first then maybe  your asset class needs to be improved. so you get better tenants.. I have learned that personally over the years 

[Tiffany Roberts]

Thank you all for your responses. I'm still not sure what to do with these but your replies do help.

[Theresa Harris]

No one has a crystal ball to know what will happen down the road.  You mentioned you sort of had a PM, what if you got a real PM?  I know PM won't care for the home as well as you would (then again neither do tenants). I know what you mean about issues popping up and they seem to all happen at once.

Look at each property on its own and ask yourself if there are one or two that are causing most of the problems over the last 5 years.  Then was it because of the tenants or the house itself?  What do the numbers look like for those houses?  Would you be better off selling those "problem" houses, buying another house in 5-10 years and investing that money elsewhere in the meantime?  

Interest rates are up-which affects both mortgage rates and savings.

[Napoleon DeCiutiis]

Quote from @Tiffany Roberts:

I'm looking for opinions on if I should sell my rentals. I have 5 single family homes and I hate them. They are under quasi-management (long story) and largely I don't have to babysit them, but every notice of an issue makes me hate them more. Most recently a tenant moved out and left the house full of roaches and another one just had an animal in the attic that somehow knocked down the ceiling light in the kitchen. My taxes are overly complicated and worst of all these houses really only break even for us every year. I know these are basic rental type things but I with a full time job and young kids and my own primary home that needs a lot of attention it just all feels like a huge strain to do anything at all for the rentals.

BUT, we have great interest rates on the mortgages, really good tenants, and the rentals won't always break even-- they will go up in value and in rent. My kids won't always be little and needing so much and maybe I'll even get to retire early with the income these houses make. 

Honestly I'm scared that if I get rid of them all now I'll be kicking myself in 10 years for how shortsighted I was. 

Right now though its just so hard.

If anyone has been where I am now with just being fed up with it all and you can let me know how you handled it-- or if you have any sort of perspective you can offer I would really love to hear it. 

Tiffany, 

We all have the "I wish I never sold that house" story, but also compare that with your happiness. (Not to make it an Eminem song, but we ALL only have one shot on this rock)...
Have you thought about getting rid of the headache ones and then concentrate on the ones that are performing well? Use the capital from the headaches to go find a less time-intensive property...  A good CPA will also make your life a lot easier.  The old adage of "what is your time worth?" definitely applies here. 

I would make a pro/con list of each property, and see if the "cons" are fixable.  If not- what is your time worth? 

Good luck! 

[Jonathan R McLaughlin]

sell the ones that give you the most trouble, and roll the money into the others. You can leave your original mortgage and pay principal early. Much less hassle, and you will be glad to have them when college runs around.

[Nathan Gesner]

Quote from @Tiffany Roberts:

Not everyone is cut out to be a Landlord.

Yes, you may kick yourself in 10 years. Or you may thank God that the stress was removed from your life. If it's killing you right now, I think your sanity is more important than holding on to something that is causing stress and not producing a good return.

Sell them and invest the money in a syndication that pays a return without any effort/stress on your part.

[James Hamling]

Quote from @Tiffany Roberts:

I'm looking for opinions on if I should sell my rentals. I have 5 single family homes and I hate them. They are under quasi-management (long story) and largely I don't have to babysit them, but every notice of an issue makes me hate them more. Most recently a tenant moved out and left the house full of roaches and another one just had an animal in the attic that somehow knocked down the ceiling light in the kitchen. My taxes are overly complicated and worst of all these houses really only break even for us every year. I know these are basic rental type things but I with a full time job and young kids and my own primary home that needs a lot of attention it just all feels like a huge strain to do anything at all for the rentals.

BUT, we have great interest rates on the mortgages, really good tenants, and the rentals won't always break even-- they will go up in value and in rent. My kids won't always be little and needing so much and maybe I'll even get to retire early with the income these houses make. 

Honestly I'm scared that if I get rid of them all now I'll be kicking myself in 10 years for how shortsighted I was. 

Right now though its just so hard.

If anyone has been where I am now with just being fed up with it all and you can let me know how you handled it-- or if you have any sort of perspective you can offer I would really love to hear it. 

What I read here Tiffany is a person who has come to really know herself, who gave it a go, knows what she does not like, but is more-so asking permission to feel what she is feeling. It is 1,000% A-OK how your feeling! It is A-OK to NOT like what you don't like, and guess what, you CAN still do REI and, not have to do any of those things. You don't have to put square peg's in round holes.

Look, being a landlord is NOT for everyone. And being a landlord is not the only way to REI wealth.

It's very possible that your "happy place" would be in the financial investor side of REI. You hear about it all the time hard-$ and private-$ investors. The people who do that could be landlords, they choose not to, for various reasons but often the exact ones your detailing.

I say, you gave it a good go so listen to yourself and devote your energy to discovering your "Happy-REI" plan. If you keep forcing yourself to do something that grates on your so much guess what, it's only going to get worse, and it's going to make you a worse person, it will bleed over into other parts of life if it hasn't already.

I got a feeling that life as a Private-$ Investor may be a great place to start, and these properties lend a perfect means to testing that out, solving 2 issues in 1 action, because you can JV your way out of the operational side of things AND retain that long term financial upside.

[Kelsey Porter]

It sounds to me like you don't have disdain for real estate investing, but you do for the hustle of owning/managing several single family rentals. If I were you, I would consider two things:

1. Push through this, find new, better management systems/company, and know that someday it will get easier when the kiddos aren't needing you so much and the homes will appreciate over that time even more!

OR 

2. Cut free of your "golden handcuffs" with the minimal interest rates on these properties and sell them all (or the biggest headache properties) and do a 1031 exchange into a bigger property or package of multi families where the cash flow is better, numbers make sense, and you can streamline property maintenance and management rather than having 6 different single family homes. 

This is why our buy-box is only multi family properties! I self manage our portfolio and know that life is probably going to be different if we have kiddos someday/my primary job really takes more time/energy out of me. 

Systems and SOPs are KEY! You have to enjoy what you're doing and if you don't, find a way out of those tasks/activities and into something you will. 

[Chris Angels]

I get where you're coming from. We had a 4-plex that was located near us, was managed by a good property manager, never had delinquent payments (even during the pandemic), & rarely had an empty unit. It was a dream real estate investment, but I hated everything about being a landlord. Some people love it, I hated it. I sold it, did a 1031 into a real estate syndication because I wanted to have real estate as part of my investment. I'm so much happier now, earning more income and tax benefits, don't need to be involved in the properties, and have reduced my liability with an added layer that puts more distance between me and the tenants. Others will see downsides to what I'm currently doing, but I'm comfortable with those downsides.

[Richard F.]

Aloha,

OK, I'll bite. What is your "quasi-management" situation? Sounds like too many cooks in the kitchen, and no solid systems or policies in place, along with different menus. 

[Colleen F.]

@Tiffany Roberts  how long have you hated them?   a month?  6 months? a year? since you bought them? If you have always hated them then let them go.  If it is a more recent situation look for the root cause and try to figure it out before you let them go.  not everyone likes owning real estate.

[Dave Foster]

@Tiffany Roberts, You're doing better than breaking even right now.  If you've had those properties long enough that you have great mortgages then you have made money on appreciation - you just don't get to spend that.  And appreciation will go up and down over the years.  So you don't want to count on it at all for the short term. But you can count on it over the long term.

Your tenants have also paid down the loan for you.  And since you have a low interest rate more is going to principle.  That will be yours one day when you do sell.

You also have paid less in taxes each year because of the depreciation benefit.  

So, while your bank account doesn't show it.  You are doing much better than you think.  That might bring some peace to you.

[Michael Blank]

I started out with single family houses and hated it. Switched to multifamily and everything changed for the better. 

[Lane Kawaoka]

@Tiffany Roberts 

Congrats on snagging those five rental properties. What comes next really hinges on where you're at financially - your income and net worth specifically. If you're already in the accredited investor club, well, then I'd say it might be time to consider moving away from those individual rentals and leaning more into syndications and private placements.

Anyway, if your net worth is north of half a mil, or even a million, then you might want to hop on the LP train sooner rather than later. Personally, back in 2015 and 2016, I was juggling 11 turnkey rentals. Let me tell you, tenants can be a handful. And I reckon you're feeling that too.

You're not alone – even with professional property management, I had my fair share of eviction dances and other major hiccups. It just sorta pulled me away from what I was best at, especially when I was clocking in at my engineering gig trying to progress my career.

A bunch of folks on these forums cover the whole spectrum, from newbies to 1m net worth plus investors. For those just starting out, diving into rental properties makes sense. But if you've hit a point where you're kinda tipping the scales, that's when it's worth considering a shift and step into that passive investor zone.

My perspective shifted when I started mingling with other accredited investors. Surprisingly, a bunch of them were saying goodbye to their rentals too. Maybe I'm just nudging you in that direction, like those folks did for me. But hey, just don't repeat my "buy 11 of them" move.

[Alex Olson]

I will be blunt. Interest rates don't matter but profitability and stress do. If you don't like how they perform, sell, and 1031 exchange into a newer, nice, better located property that makes more financial sense. Sometimes that is out of state sometimes it is in your backyard. If you want to get to a more definitive strategy, happy to talk further. 

[Travis Biziorek]

Tiffany, I noticed you're in A2. We almost moved there in 2017 and even had offers on a few homes that went far more above ask than we anticipated.

We ultimately moved to Metro Detroit and invested in Detroit proper. Are you properties there?

It definitely has its challenges. We also have 2 young kiddos and are doing another big renovation on our new primary. It's stressful but ultimately it's been fantastic for us. We're going on year #5 with our rentals.

It gets easier, and like you mentioned, life will become less complex. Let me know if I can be helpful.

[Dave Skow]

@Tiffany Roberts- thanks ...Lifes too short .....sell them while you can still enjoy your life  with your  young  kids  ( versus  managing these properties )   assuming there are  profits to be made ...you might consider the ones that are most problematic  (  meaning the  houses and not the kids !) ...good luck 

[Henry Lazerow]

The market already has appreciated and rents have drastically increased nation wide. If they still dont cashflow just sell them. Dump the money in SP 500 index fund and spend time on other things. 

[Sam Zes]

Real estate investing is not always easy, especially in the beginning.  If it's something you "hate", you should probably consider selling off your portfolio.  I would say to find a better property manager, but it sounds like you're leaning towards getting out of the game.  Even in the beginning of my investment career, when I was losing some money, I still loved every second of it.  You shouldn't just hang on to the properties in case you will regret it someday.

[Jake Andronico]

@Tiffany Roberts

I'm sorry it's so overwhelming. Definitely been there. 

The beauty is, YOU are in control. 

You do not have to sell all at once - you could keep the 3 best ones and sell off the other 2, for instance. 

If they've gone up in value (not sure when you bought) you could then pay off the mortgages (yes they're great rates, but you clearly despise the situation) on the better ones. 

2-3 properties fully paid off with good PM's in place is a pretty sweet place to be. 

Sometimes scaling isn't the answer for YOU. Your properties, your life. 

I hope this helps even a little, and hang in there!!

[Mike Dymski]

Rents and values skyrocketed over the past few years.  That should make small stuff like roaches and a ceiling light insignificant, particularly if you switch to full time 3rd party management and get out of the details.  If your rents and values did not go up, then that's a problem independent of the love of the game.

[Beth Davidson]

@Tiffany Roberts I appreciate your honest share. I am a newbie and I can't help but wonder if there are many people like you who wake up one day and think "What have I done? I own all of these properties that I don't like." The themes that I am picking up from the discussion outline a few possibilities:

1. sell and upgrade to better properties, better, PM, better systems.

2. Upgrade your PM and systems and hold the properties

3. Stop being a landlord and find another avenue within the REI marketplace.

I think if it was me, I would hold the properties and research better systems. Maybe you need to upgrade the properties to prevent some of the headaches? I don't know.

I wish you the best!

Beth