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 If you buy an outdated, defective building, the upkeep, repairs, or just extra work hustling to find a tenant, can lead to burn out.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...