Owning rental properties is often touted as the holy grail of passive income. If you buy the right properties, the tenants pay off your mortgage, and you get a little extra cash each month to stash away in a savings or investment account. My wife and I were landlords for about three years; and while landlording can be financially beneficial, we eventually decided that it wasn't for us.
How We Got into Landlording
We purchased our rental property in 2011 as our primary residence. At the time, we knew it wouldn't be our long-term home, and we figured that we'd likely end up renting it out one day.
What we didn't know was that the time to become landlords would come less than two years after we moved in.
Get Homeowner’s Insurance From a Top Provider — Free Quote Here >>
We moved into another home in 2013 and rented out our original property for the first time. Luckily, we had responsible tenants who stayed for the full three years we rented the property. They were low-maintenance and didn't cause any major problems – a landlord's dream. So why did we want out of the rental property business?
I Worried About Our Rental
I admit, I'm a bit of a worrier. In this case, I ended up worrying about our rental property way too much. I didn't have any real reason to worry in most cases, but the little things slowly ate away at me. Sometimes the rent would come a few days late. Other times, I'd worry about what maintenance I might need to do. Or about whether an incoming storm would damage our property.
Of course, I had legitimate reasons to worry, too.
One time, the air conditioner's drain line clogged up and flooded our upstairs closet while our tenants were away.
The tenants didn't think it was a big deal, so they just sent me an email about it. Luckily, I saw the email right away, and I managed to correct the problem before it completely destroyed the closet.
Get Homeowner’s Insurance From a Top Provider — Free Quote Here >>
One Rental Means Figuring Out Every Problem Like it’s the First Time
One huge reason we sold our rental? Every time something went wrong with our rental, we had to figure out what to do about it. We either had to fix the problem ourselves – which took time – or hire someone at a considerable cost.
This doesn't sound like a big deal, but it's easy to get overwhelmed when you add these issues on top of everything else going on in your day-to-day life.
Ideally, landlords assemble a team of people they can trust to take care of their rentals. They find a handyman whom they can trust and who won't overcharge them and a property manager who can handle their properties at a reasonable rate.
Unfortunately, I never had a chance to build up a team, since I only owned one rental property. Besides, hiring a property manager for just one rental would have been overkill, and would have greatly diminished our return on investment.
Why We Decided to Sell
Our rental property was an extremely good deal financially, but we ultimately decided that we aren't cut out to be landlords at this point in our lives. The financial gain wasn't worth the headaches of landlording.
We may change our minds later, when we can afford to own multiple rental units. For now, though, we sold our rental when our tenants moved out, and we don't plan to give it another go for a while. Even though it was only for a short time, landlording was an eye-opener, and I am “richer” today for the experience.
