Real estate investing offers couples one of the fastest paths to wealth and financial freedom. However, is it something that one spouse should focus on? Or is it a good idea for to be directly involved in the business? In this article, we’ll discuss all of that and more.
Real estate investing affords couples a number of distinct benefits (many of which are unique to real estate and don’t extend over into other business opportunities). Here are a few of the reasons why couples should give real estate a shot:
The list could go on and on. The reality is that real estate investing sets couples up to be financially successful. However, there are some challenges and concerns, too (particularly when it comes to working together and preserving the relationship). You must be able to work through these in order to be successful.
If you’re going to invest in real estate with your spouse, there are several helpful tips you should follow to ensure it’s a beneficial experience (both financially and relationally). Here are a few:
M.J. Grenzow and her husband John were in the real estate investing game for 12 years together before they eventually had to sell off their properties and get out. It wasn’t that the properties weren’t earning them a profit – they actually generated pretty nice cash flow. The problem was that they were never on the same page as a couple.
“The rentals were John’s idea, and I went along reluctantly,” M.J. recalls. “And when the going got tough, I bailed—at least emotionally. I still helped my husband with the day-to-day tasks, but did so from my first-class seat on the self-pity train.”
M.J. specifically remembers the time her resentment reached a boiling point. It was a cold winter day and her husband, who was at the office doing his day job, told a tenant that they would take care of the snow removal. John had made the assumption that M.J. would do it (since she was off that day), but M.J. was irate. She didn’t want to spend the day shoveling six inches of snow off the sidewalk and driveway. She didn’t think that was her responsibility.
Little things like this might not seem like a big deal from the outside, but they are when you’re living in the middle of it. If you want to be successful, make sure you’re on the same page. This includes establishing clear roles of who is in charge of what.
Regardless of whether or not the two of you already share a bank account, it’s smart to set up a separate bank account for the rental property business. This makes it a lot easier to keep track of income and expenses. It also makes things like bookkeeping and tax preparation a lot simpler.
As part of getting on the same page, you should both be clear on where the income goes each month. Are you keeping it all in the rental property bank account? Are you funneling some of it into your own personal accounts? Set the expectation on the front end.
When you’re in business together as a couple, you have to resist the temptation to talk about it all the time. Set expectations around when and where you discuss business matters.
One good rule of thumb is to only talk about business during business hours (9am to 5pm, Monday through Friday). If you want to discuss the rental property outside of these hours, make it a point to schedule an appointment on the calendar. This might seem like overkill, but it sets a precedence. You don’t want to be the couple that has no personal life because you’re always caught up in the stress or economics of owning real estate together.
Once you go from owning one property to owning several properties, you run the risk of letting your roles as landlords take over your relationship. You can reduce the chances of this happening by hiring a property manager to oversee day-to-day tasks. A good property manager can help with marketing your property, screening tenants, onboarding new tenants, collecting rent payments, scheduling maintenance, accounting and bookkeeping, etc.
At Green Residential, we help Houston-area real estate investors build and manage their real estate portfolios with stress-free property management services. If you’re looking for a simple and carefree way to leverage the power of rental property investing, give us a call! We’d be happy to tell you more about our comprehensive property management offerings.
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