This is not a bait and switch, I'm really going to tell you what sucks about owning rental properties! I will note that in general, I'm usually an optimist. I think I just need to get this off my chest. And of course I know many of these can be mitigated by a good property management firm, but it's not a transition I've made yet.
1. Drive-by shootings - yes, this just happened to me. The property is in a suburban, family friendly neighborhood. The tenant of course claims it had nothing to do with him. Although not perfect, they were decent tenants for about 1 year. No matter how thorough your screening, people change as we all do and the worst can happen at the investment you thought would bring you closer to early retirement.
2. Drama - If you've ever managed people, you know that, well, people kind of suck. It's astounding how many people never developed their ability to play well with others. I've had to deal with text messages that are just plain silly. I've learned to reply with something like, any aggression or harassment towards your neighbor is unacceptable. Unless there is documented proof of one side being the primary cause, both parties will be held accountable and it will be considered a violation of the lease. This usually shuts the banter up real quick.
3. Repairs- you budget for them, you know they'll happen, but it still sucks to deal out 10K for a sewer issue.
4. Insurance is not exactly your friend... they never exactly are I know, but when some serious water damage occurred right after I had installed new floors, it seemed reasonable to use my insurance. Next thing I know, I'm getting kicked off my policy by the risk management group and forced to pay nearly 50% more for another policy.
5. Obsessive strategy thinking....this doesn't happen to everyone, but I find myself spending a lot of time debating my next steps. There are a million opinions and strategies to consider if you are interested in building a portfolio.
6. Bookkeeping - ugh, it seems simple, 12 months a year, rent in, mortgage out. But if you don't set-up good systems from the start it gets shockingly easy to fall behind and get confused.
Well, now for the optimist ending. My properties have helped me create wealth much faster than saving alone could have. They are enabling me to aggressively work towards this dream of financial independence. But after item # 1 above, I can't help but wonder, is it time to get out?
What are your thoughts?