Being a landlord is not a stress-free job, but it doesn’t have to be overwhelming. If you are ready to face some stress and develop a plan for mitigating those factors, then you can carve out a successful career as a real estate investor.
Main Causes of Stress:
Your attitude will contribute to becoming a capable landlord. Approaching every hurdle in a constructive and positive matter will go a long way and understand that every challenge has a solution. You will be impacted by the following factors:
One of the biggest frustrations that landlords face is the late or irregular payments. It impacts the cash flow and also causes the landlord to waste time and energy to track the money down.
Bad tenants are ones that are irresponsible with the property. They won’t take care of the property or keep it presentable. They may cause damage and not report minor problems that grow into bigger ones.
Cash Flow problems are very stressful, and one needs to pay the taxes, bills, and mortgage to keep the property above profitable.
Real Estate can be complicated sometimes, and if you are not careful, you can be involved in some legal trouble. Areas of concern are tenant screening and property access.
How to Overcome Stress
Once you know what causes you stress, you can develop a good plan to overcome common issues and find peace.
Here are some suggestions that you can consider to reduce stress:
Hire a Property Manager
Hiring a property manager can help you avoid friction that comes due to interaction with the tenants directly. One needs to understand that there are positive relationships that function best when a third party is involved in separating the emotions and eliminating the pitfalls that occur between the two parties dealing with an unpleasant situation.
Screening the Tenants Carefully:
Good tenants reduce stress. For having a good experience, you should carefully screen your tenants. Verifying references are essential in the determination. Screening your tenants means carefully reviewing the information that they have provided and also analyzing the outside information that you can discover. Always, trust, but check. As a landlord, it is your job to do effective screening and choose the right person for the property. The best advice is to screen all tenants with the same criteria and make sure you are familiar with discrimination laws for your area. In selling the property manager again, their experience can be valuable in this process, especially if you are a new landlord.
Automating the Rent Collection:
Physically collecting the rent is a slow, inefficient and cumbersome process. You can limit the amount of effort by automating the rent collection process through an online platform. You need to require your tenants to set up a direct deposit. Your mortgage will be due on the first of the month, so you don’t need delays in receiving your rent.
Keeping an Emergency Fund: Creating an emergency fund is very important as it can help you limit cash flow and money-related stress. The fund should be a dedicated cash savings account that has money to bankroll your property for three to six months. It may be worth factoring that coverage into your insurance policy. This can ease any worst-case scenarios that occur.