People don’t get into the business of being a landlord because they want an easy, non-confrontational job where they get to clock in at 9 a.m., take a lunch break, and clock out at 5 p.m. There are plenty of reasons to become a landlord, but predictability and low stress aren’t among them.
You don’t have to spend every hour of the day completely stressed out. If you’re smart and strategic about how you handle different situations, you can significantly reduce stress and enjoy more of the exciting aspects real estate investing yields.
Stress is your body’s natural way of responding to the demands or threats you face – whether real or imagined. In early centuries, stress was what helped our ancestors run in order to avoid getting mauled by a tiger in the middle of a hunt. Today, it’s evolved into more than just a response to physical danger. It now accounts for emotional threats – including problematic tenants or issues paying the mortgage.
“When you feel threatened, your nervous system responds by releasing a flood of stress hormones, including adrenaline and cortisol, which rouse the body for emergency action. Your heart pounds faster, muscles tighten, blood pressure rises, breath quickens, and your senses become sharper,” HelpGuide.org explains. “These physical changes increase your strength and stamina, speed your reaction time, and enhance your focus—preparing you to either fight or flee from the danger at hand.”
While some stress is totally natural, chronic stress is not. Not only is it unpleasant to constantly feel stressed out, but it’s also unhealthy. Chronic stress can lead to depression, physical pain, sleep issues, autoimmune diseases, digestive problems, skin conditions, heart disease, weight problems, reproductive issues, and cognitive deficiencies.
As a landlord, you’re going to experience stress – there’s no way around it. But you shouldn’t feel that chronic stress is normal. The following tips will help you manage stress and find freedom in the midst of chaos.
When most people get started in real estate investing and landlording, they have this idealistic notion of how it’ll work. They assume that all of their financial projections will work, tenants will be polite, and the money will pour in from month to month.
Sometimes things work out, but sometimes they don’t. The first step is to adjust your expectations, so you aren’t as frustrated or confused when something doesn’t go your way. A good rule of thumb would be to aim for the best, while expecting the worst. In most situations, you’ll land somewhere in the middle.
“Vacancies often breed anxiety among landlords. The desire to fill a unit quickly can sometimes get in the way of finding the perfect tenant. However, this could be a costly mistake,” property management expert Anne McMillin explains. “Bad tenants miss payments, damage property, and can be downright miserable to deal with.”
The problem with poor tenants is that they create a cycle. One bad tenant leads you to rush into signing a lease agreement with another bad tenant, and so on and so forth. The sooner you put a stop to this cycle, the better. Meticulously screen tenants on the front end and you’ll have fewer problems down the road.
Money is usually the biggest stressor for landlords. If you can eliminate some of the financial worries associated with your properties, a huge weight will be lifted.
One of the best pieces of advice is to build up a cash cushion of at least three months worth of expenses. This means accounting for your mortgage payment, taxes, insurance, utility bills, and normal monthly expenses (maintenance and repairs). Consider these sample numbers:
Mortgage: $750
Taxes: $200
Insurance: $100
Utilities: $200
Monthly Expenses: $100
Total: $1,350
In this scenario, you would need to set aside $1,350 X 3 – or $4,050 – in a separate account that you don’t touch. In doing so, you can rest assured that you’ll be able to survive for at least three months, regardless of what happens. No more worrying about losing your property if one little thing goes wrong.
Real estate is a very serious business with lots of money involved. This means it creates quite the paper trail. As a landlord, you can’t afford to get sloppy with your record keeping. In fact, the more organized you are, the less problematic it’ll be when you need to fix an issue or locate a piece of information.
As we’ve previously discussed on this blog, there are lots of different methods for staying organized. Find one that works for you and stick with it.
One of the downsides of being a landlord is that you don’t technically have “off” hours. If there’s an emergency in the middle of the night, you’re going to get a phone call. But don’t feel like you always have to be accessible. Let your tenants know that, for example, you don’t check your phone after 7 p.m. This gives you a chance to relax without constantly feeling like you’re on call.
Will it cost you a little bit of money to hire a property manager? Sure…but you have to determine how much your sanity is worth. Most landlords discover that hiring a property manager to deal with the stresses of day-to-day management is worth its weight in gold. You’ll probably find this to be true in your situation as well.
Being a landlord is a huge responsibility, but you don’t have to bear the entire burden on your shoulders. At Green Residential, we’ve been helping Houston-area landlords for more than 25 years and would love the opportunity to serve you, as well.
For more information on our comprehensive property management services, please contact us today. We’d be happy to provide you with a free property analysis.
TREC Broker License # 9001367
CALL US