Posted over 4 years ago

Preventing Landlord Burnout

Preventing Landlord Burnout

 

One of the most fascinating parts of BP (Bigger Pockets) is seeing all the new real estate investors and landlords. Sometimes I see a new landlord introduce themselves every few hours.  It's like watching the maternity ward at the landlord or investor hospital.. A happy place...

 

Of course, just as one bright, new star emerges another probably burns out or fades away. It is one thing to rent a place once and another thing altogether to do it over and over for many years.

 

How can you keep your star burning bright?

 

My posts and work is largely designed to help part time landlords manage their property. One theme I try to infuse is work-life balance, and more specifically the ability to balance your day job with your rental property activity (and life). This is not a commonly addressed topic in the landlord literature.  But it does show up in some BP forum posts.

 

There are a range of time and money saving practices at every stage of landlording, from choosing a property to selecting tenants and turning around units, that can help landlord sustain their rental business for the long term and avoid burn out.

 

Below are some broad areas and themes to help prevent landlord burn out. Working on these major areas can go along way to alleviate the common sources of landlord stress and help build a sustainable rental businesses that can last for many years.

 

 

Tenants: The quality of your tenants will directly correlate to your stress and longevity. Good tenants will take care of a unit, pay rent and stay through the lease and even renew. Troublesome tenants will quickly make their problems yours. Their inability to manage money or keep a job will result in extra time, stress, and even evictions. In addition, their conflicts with neighbors or co-tenants will find their way to you as well.  Bad tenants may even multiply with unauthorized occupants and have excessive traffic and visitors.

 

Building Selection: Location and condition are key to a long term rental property . Location is key for you (to easily show and maintain the property) and for the tenant, in terms of their work and lifestyle. The condition is key to your success and longevity as well level too. If you buy an outdated, defective building, the upkeep, repairs, or just extra work hustling to find a tenant, can lead to burn out.

 

Scale: For most part time landlords with full time jobs, trying to run one hundred rentals is really not sustainable long term (although there are exceptions).  What level and type of reactivity is al estate sustainable. A busy professional might opt for a couple of condos or an accessory apartment rental, but a semi-retired part time worker could handle a few four-plexes.  Fitting the scale of the operation to your lifestyle can help avoid burnout.

 

Expectations: Make sure you set reasonable expectation--for yourself and tenants. Understand fair rental condition (and how it is not perfect showroom condition). Learn to accept and work with normal wear and tear. Things will break. You will get a complaint now and then. Bend but don't break and remember the axiom: the perfect is often the enemy of the good. In fact, many concepts in landlord tenant law require as much --like wear and tear. If you can keep the long game in mind, the small stuff along the way will be more bearable.

 

Delegate: Contractors can be key players for the landlord. One primary reason for burnout could be simply trying to do it all. Remember that doing your own property management does not necessarily mean doing everything. But when and how to properly delegate tasks to contractors can be complicated.  Learn all you can about this topic.

 

Time frame: Keep in mind we all have a shelf -life as landlords. Think about your goals and long term plan. It may be that your interests or life have changed. Just as a situation brought you to landlording, future events may lead you away. You may even want to think about exit strategies like selling, outsourcing management.

 

More than money: While financial gains can be a prime motivator for landlords, finding other aspects of the activity you enjoy can help avoid burnout.  You are housing people (which is very worthwhile and important). And most people can find some aspect of the process they like, be it meeting people, showings, cleaning, painting, the pride of ownership, being own boss, or just staying active. When I see a new landlord introduce themselves as simply "Seeking 20K in cash flow a month", I know it probably won't end well. However, when I see someone excited about a newly purchased duplex, fixing it up, showing it to tenants and renting it out, this is bright story of the small time landlord making a big time difference in the US housing market...


Comments (2)

  1. Thanks for the comment Jerry... We have a lot in common... I have those same thoughts (and costs!). You are on a larger scale than me (I kinda balance a few rentals with my day job)... But we both have Wyoming roots ( I grew up in Evanston 3rd-10th grade; # 19 on the license plates) and once on football trip to Cody stayed in Thermopolis  (at a unique hotel that I think had some sort of game/trophy room, but I am not positive). And I think when I first moved to Wyoming we had Thermopolis Bobcats in our conference as 3A in 80's , but  I was a kid then so I watched alot of games and matches .. 

    Speaking of WY, I think you have also been up against a tough labor market in that state in last few years--as many good workers could easily drive to 100K jobs in the oil fields (both to the south, east, and even some west, etc)..... Probably many every able bodied workers were off to fight in the 100-150 dollar a barrel energy war.

    But that is slowing down, so maybe the labor market slacks statewide and allows some better help (at a reasonable rate!)... Some ideas may be a younger worker to train, looking outside town, like even regionally or state wide, or even checking the local high school for handy seniors (from industrial arts, wood shop class or something) about to graduate or able to work weekends and summers (sort of grow your own handy man).. Lots of energy there but needs lots of oversight. I am guessing Northwest CC in Powell there is the closest college for that age worker...Maybe the incentive would be summer housing plus some kind of salary there... (but then summer tourism work may pull some of those folks)...

    You know yours is a heck of a large scale for one guy with a job. One way to keep the cash flow and lighten the maintenance may eventually be an owner finance of some units, but you really need the right buyer (someone with the people, property skills plus financial management)... May be limited pool of buyers there, too, locally. So branching out the feelers to potential buyers may work there someday to scale back. 

    Last time I was out there in Wyoming, like 2004, my buddy had a decent construction outfit and he just went to the wrestling coach and asked for the toughest hardest worker that summer and hired him on (and worked him like crazy all summer).... Might give you some vacation. 

    Let's stay in touch! 

    Best,

    Mike


  2. Michael,

       Very good article.  I am a full time professional, and have about 30 doors.  I personally manage all but 12 units that are an old apartment complex of 3 buildings.  Originally there were 2 of us running the show and we had a few less houses.  Three years ago I bought the last partner out and have added about 8 more houses.  I am also involved in a small commercial project and have taken over the management of that and will probably buy the remaining partner out of that.   My professional life is taking a little bit of a beating due to the pace of my rentals but luckily I am the boss.  I have found that I no longer take vacations, and holidays are spent working on rentals.  I cannot find reasonably priced help that is competent.  I cannot afford $125 for plumbers for example, to repai9r leaky faucets or even change out a water heater.  It costs $1,200 to have a water heater changed out, I can do it for $500 and it takes 2 hours.  I have always worked long hours but it is getting out of hand.  I guess the first step is realizing there is a problem, then figuring out how to cure it.  I have worked hard to get tenants that are low maintenance, but roofs still need replaced, and water heaters still break.  I cannot seem to keep even one competent handyman as their prices go up fast when they are good, or their work is not acceptable.  Well time to get to work on an action plan to address it.  Any additional suggestions would be welcome.