Lay it on me friends, I want to hear what you hate about land lording. What should I expect that is a real PITA? I read in someone's post the other day that they hate land lording. It is my goal to try land lording and purchase and run a rental property. If you are a veteran landlord, which parts of it are the rough spots? What are your hassles? I know that good management can take care of a lot of your issues. What should I be prepared for? Thanks!
Two things I have learned in the past 10 years that to me are most important:
1. Buy the property at a good price. Never overpay. Other deals will come around as a buy and hold investor.
2. Screen tenants in depth from day 1 and never sacrifice any of your guidelines for what you deem a quality tenant.
What's the worst part about landlording? People who don't pay rent of course.
Totally agree with @Michael Noto ! Don't overbuy and keep reserves for unexpected repairs (and planned cap expenses, too)
@Karen M. a few things that are annoying to me are:
When tenants don't get along and they gripe to me about it.
When something urgent is has to be fixed (e.g. furnace, plumbing). No matter how much you like landlording, these type of situations are likely to be annoying. I have young kids and a full-time job. So having to also fit in time to attend to a serious problem at a property can be annoying and stressful.
That being said, I love landlording probably 95% of the time. So for me it is definitely worth putting up with the annoying parts.
Overall, I enjoy being a landlord. But it's certainly not without it's challenges! Least fun things:
1) Having to evict someone.
2) When I had a management company for one of the properties, having to chase them to get any sort of communication. I fixed that one, and now they are the ex-management company.
3) Chasing late rate.
5) Stuff breaking. Often in statistically unlikely patterns, like going through a stretch where it seems like something is breaking all the time. And then you go through a few months with hardly anything. You definitely need to always maintain some reserves.
For me, it is not being able to control when the workload hits you... right before vacation, during vacation, during the holidays. Also the stress level during the days or weeks when you know you have a problem but don't yet know how much time or money it will take to resolve it. A property manager can shield some of that, but it is still on you. People earn you the returns, not the property, and people are unpredictable.
For me, without question, it's the lying. Most of us are in the situation where we have money we can invest because we made wise decisions. We worked hard, diligently saved, etc. Some inherited money or made it off of selling their primary residence, but still, if they are looking to invest in real estate they are at least attempting to make a wise financial decision. Most of us mean what we say and have good intentions. Unfortunately, many of the tenants we rent to do not. And doubly unfortunate, many of the areas we have to invest in to find favorable returns attract those who do not. The most frustrating part for me is how difficult it can be to trust the words of the people we have contracts with. "It's in the mail", "I will have it soon", "No one else is living here", "Ill be out in 2 weeks", etc. are all too common and can make it difficult to know what to think as a landlord. If you are going to get started in landlording, my advice would be to prepare yourself to enter a world where people will take advantage of you and lie without much hesitation. Not every tenant is like this, but many will be. I would 100% recommend using a property manager for this very reason. Property managers have a vested interest in keeping a tenant in place that is paying rent and getting one out that has stopped paying. They are also much more likely to only take on more qualified candidates who are more trustworthy in the long run. It was a bit of a shock to me how irresponsible some of the tenants I rented to in the beginning could be and how little their word meant to them, and it took some adjusting to get used to. If I could go back in time, that's one of the first changes I would have made. Preparing for the fact not everyone thinks like me.
Hard part is finding a quality property manager....
I think they have all been covered: lying, vacancies, lack of care about that property, evictions, complaints... but what really burns me are some of the laws that really favor tenants and IMO are really unjust.
I completely agree with @David Greene . Lying is very common and the main thing I don't like about this business. "It's cleaner now than when we moved in" seems to be the one I hear the most. My answer: "No it's not. I have pictures." This usually ends that argument.
Definitely do a thorough background check. Everyone looking at your property will be all sugar and spice. So you think that they will be great tenants. Nope. Assume everyone is lying to you and verify it all.
This is very helpful. I want to make a prepared and informed decision about investing in rental real estate and becoming a landlord. I wouldn't have thought about lying, good to know. Your insights are very helpful.
Follow up question: (wait, I will start another topic for the follow up). Thanks!
Showing properties, worst part IMO.
Nick, what is it that you hate about showing properties? Is it just that it is time consuming?
I'm really surprised something people say showings are worse than evictions (or bad tenants in general)
For me, it's dealing with contractors and others. Tenants are easy, I think, but managing people is not so easy!
I agree with Brandon, finding good people (contractors) to do your business like you would do it at a cost effective price. That's the part I don't like. Sifting through Craigslist ads and replies to Craigslist ads, calling for estimates, following up on shoddy work, making sure I'm not being overcharged and making sure it's done the way I requested. Huge pain with little gain.
Dealing with difficult tenants...90% great..10% more challenging...You will learn to weed the bad out with experience...
I just went through my first and hopefully last one ever. All the tenants had to do was JUST LEAVE. But nope. I guess when you have....
no money (you use it to drink and smoke)
I guess you really have no place to go.
hardest part for me is getting those phone calls or texts which say "no heat" or "need new water tank" . My heart always sinks when I realize that I'm about to shell out a chunk of change!
Not having money to buy more properties!
Terrible landlords. Especially those that have a lot of properties in the same area. Tenants can trash our properties and that changes our perspective, but it should be a lesson. When an owner has multiple properties in a nice area and all the units have problems, the owner is the problem, not the tenants.
@Michele Fischer You are spot on. Unpredictable people and unpredictable weather and unpredictable failure of appliances/building materials, all at unpredictable times.
@David G and @Michelle L. You are right about the lying. During screening I verify everything I am told. I tell our tenants at the onset that I value open and honest communication and if they choose to lie to me at anytime about anything, it would seriously harm our relationship.
@Brandon Turner and @Bill S. Yes, it is a challenge to find the right people, with the right work ethic, with the right skills, at the right price, at the right time. I maintain a vendor list over 30 names long from Accountant to Window Washer and must continually update it. Most important vendor?... the plumber that will come at all hours of the day, get dirty in the muck of a broken water pipe or broken sewer line and still have a good sense of humor!
Pest control...I hate paying the pest control man (although I need them). I can't blame the tenants even though a lot of pests can be caused by them. It's just a matter of terminating the leases on filthy messy tenants.
Long evictions....professional tenants that know the system...they can put a damper on cash flow.