Researched two options;

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Researched two options;

Bruce S.
Member since 2023 · 4 posts · 0 votes

I have two out of state Townhomes nearly identical and rent for around $2,600 per month.

I was planning on finally recasting the loans at a lower balance of $70K each to get $1,200 per month per unit or $2,400 per.month from both in retirement. (Fortunately I don't really need the income at this time but was just going to stack into savings).

That was until one of my tenants got sick??? And hasn't paid rent for Sep, Oct and Nov totaling nearly $6,000; (they deposited a good faith payment of $1,700) I sent an Eviction Order for my protection as I don't want squatters but they are saying they will be out by Dec 1st?? TBD.

I have other rentals in my home state and over the years the tenants seem to all have issues! Some have damaged the properties and others have had issues paying rent. It's always one thing or another!!!!

So I did some pro-forma's to compare the 5-7-10 year gains on these two properties as rentals versus liquidating and just putting the equity into T-Bonds which are currently paying over 5%!!!!

I also ran numerous scenarios through ai and it also showed that keeping the rentals gives a better long term return over fixed income. As expected the longer the term the higher the margin as the five year gain was minimal where the ten-year gain was close to 300K but that was with a lot of positive assumptions.

The other concern is after hearing a statistic last night that 29% of adults this year used BNPL to purchase groceries! Fact checked and it's an accurate statement!

So with rising inflation which is good for real estate...but I I'm concerned there is a paradigm shift taking place where the lower end of this K shaped economy is growing while responsibility is waning.

Is this going to become the new norm where collecting rent is going to become a regular hassle?

Both of these Townhones are great properties 3/2.5 bath with 2-car garages and are only 9-years old.

But; I'm getting Landlord Fatigue with turnover cleaning/repairs, tenant screenings, lease agreements, managing rent payments, repairs, worse tenant issues, etc...

The new tenants all seem super excited and enthusiastic when taking the keys then after about 14-months the communication becomes nonexistent eventhough my #1 statement in my lease agreement addendum is "Good Communication" It always starts like a happy marriage and usually ends like a bad divorce!

Please recommend whether you feel the hassle is still worth the effort these days especially when bonds are paying a historically high rate!

Thanks!

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  • John RacinePro Member
    Rental Property Investor · Casselberry, FL · Member since 2008 · 157 posts · 85 votes
    20h

    @Bruce S. Short answer: yes, I think it's still worth it, and your own numbers say so. A bond at 5% pays you 5%, and that's it. Your townhomes are working on several fronts at once: rent that can go up over time, tenants paying down your loans, appreciation, and tax benefits a bond doesn't give you. That's why your 10-year run came out close to $300K ahead. Over the long term, real estate far outpaces bonds. The bond rate looks great today, but it doesn't grow with inflation, and your rents and property values can.

    What's wearing you out isn't the investment. It's the management. Those are two different problems, and selling fixes the second one by giving up the first.

    I've been where you are. My first rentals were two long-term duplexes in Orlando, and there was always something: weekly payers, late rent, a few evictions. I didn't fix the fatigue by selling. I fixed it by changing how the units are run. Most of my portfolio is mid-term now (furnished, 30+ day stays), and across my properties mid-term has brought in more than long-term would, even after I cover utilities and the other owner expenses.

    If you keep them, a couple of ways to take the hassle out:

    Hand the work off. I've had property managers run some of my long-term rentals. Read their agreements closely, because a lot of the language protects the manager. But the list you wrote out (turnovers, screenings, leases, collecting rent, repairs) is exactly what a manager takes off your plate. From out of state, that alone may solve most of the fatigue.

    Price out mid-term, with eyes open. It isn't hands-off: you furnish the place and turn it over more often. But my 30+ day stays are paid through the platform, so I'm not chasing rent the way I did at the duplexes. Check the HOA rules on minimum lease length first, and use your current $2,600 long-term rent as the floor.

    One more thing to keep in mind: almost every investor I've talked to regrets every property they sold. One tenant who stopped paying is a bad few months, not a reason to give up a 10-year return like the one you ran.

    On that tenant, I'd keep the eviction moving until they're actually out instead of pausing on the Dec 1 promise. The evictions I went through in Florida went well because I followed the process all the way through. Rules vary by state, so check yours.

    Not a financial advisor, just what I've seen in my own portfolio.

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  • Bruce S.
    OP
    Member since 2023 · 4 posts · 0 votes
    18h

    Super informative response John!

    You covered all the bases and nice to have reaffirmstion on continuing down this path!

    Maybe it's time to seek a PM!!!

    Much appreciated!

    Bruce

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  • Divin KanyamaBusiness Member
    Accountant · Seattle, WA · Member since 2025 · 681 posts · 285 votes
    17h

    Sorry about the tenant situation, @Bruce S.. Three months unpaid is stressful, even when you don't need the income. Hopefully Dec 1 works out.

    I don't think this is a new norm so much as a reminder of what self-managing costs. Tenant issues have always come with rentals. The real question is whether the extra return is worth your time and stress, and it sounds like you're already feeling that.

    On the numbers, I'd be careful comparing a 5% bond to a rental pro forma. Make sure the rental side includes vacancy, turnover, repairs, a big-ticket reserve, and bad debt like this $6,000. Then compare both after taxes. Selling could trigger capital gains and depreciation recapture, which can take a real bite out of the equity you'd move into bonds. A ten-year gain built on positive assumptions can look very different with realistic ones.

    The two aren't all-or-nothing either. You could keep these 9-year-old townhomes, which are in great shape, and hire a property manager. It typically costs a percentage of rent, so check local rates, but it takes screening, collections, and turnover off your plate. If the numbers still work after that fee, you get the upside without the fatigue. If they don't, that's a clear signal to sell.

    Since you don't need the income right now, there's no rush. I'd let the current situation play out, run the numbers with and without a manager, and talk to a CPA about the tax hit before deciding. Good luck!

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  • Marc MoraPro Member
    Investor · Fort Lauderdale, FL · Member since 2026 · 122 posts · 19 votes
    4h

    @Bruce S. , let's connect. Sounds like your numbers already answered the return question, and the real one is how much more of this you want to carry. Ten more years of tenant problems feels different when you don't need the income.

    Landlord fatigue is a fair reason to rethink how you hold them, and selling has its own tax side worth checking first. I can connect you to some good resources. What are your end goals in REI? Are you leaning toward selling at least one of them?

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