Steve Welty, CEO of Good Life Property Management, oversees 1,300+ units in San Diego & Orange County.
When you enter into investments, like purchasing a rental property, many often think of them as purely financial decisions. You must invest in a property, maintain it, find tenants, manage emergencies and more. And while the financial implications should never be ignored, there is another dimension to investments that is often overlooked: time and energy.
Time and energy are finite, irreplaceable resources. As the adage goes, you can always make more money, but you can’t get your time back. And your energy dictates the quality of your time—if you’re overworked and exhausted, you might not make much of any time you can take back.
Investing smartly means looking beyond your financial return. In his book, “The Psychology of Money,” Morgan Housel wrote, “Controlling your time is the highest dividend money pays.” So, when it comes to investing in a rental property, it’s important to be able to confidently say you own it—and it doesn’t own you.
As a property manager, I encounter people who initially chose to be DIY landlords because they thought it was the easiest way to recoup their investment as quickly as possible. But then they became overwhelmed by the time and effort it takes to manage a rental property—or properties. If you’re just starting out, it’s important to be aware of these factors so you can make an informed decision about how you want to manage your investment.
From tenant sourcing and tenant screening to general management and maintenance, here are the tasks I see take up the most time:
Understanding The Ins And Outs Of Landlord-Tenant Law
Rental property ownership comes with a long list of federal, state and local landlord-tenant laws. These laws can vary even on the municipal level. Keeping track of them is important—and can be overwhelming. It can take a lot of time for you to become familiar with each law, but it is essential to protect you, your tenants and your investment.
From handling security deposits to screening tenants to managing the eviction process, there is a lot of legal red tape you’ll need to effectively navigate through. The result of not understanding and following these laws can be severe—you could find yourself paying fines starting at $16,000 and going up to $100,000 for a case where the Department of Justice is involved.
Tenant Screening
One of the first things any rental property owner wants to get started on is finding the right tenants. At first glance, that might seem simple. But tenant screening can be a lengthy, complex process that involves a lot of hands-on work. You need to review applications, conduct background and credit checks, verify employment, check references and ensure you’re doing all of this while upholding state and federal Fair Housing laws.
This process is crucial because placing the wrong tenants in your property can lead to late payments, property damage and even legal issues. As a property owner, you may feel pressured to make a quick decision to avoid losing rental income, but this can result in choosing tenants who aren’t the best fit. Ultimately, this results in more work and potentially more lost income. So, this isn’t a process you can rush if you want good results.
Middle-Of-The-Night (And Other) Maintenance Requests
Ask any landlord or property manager—handling maintenance requests and emergencies is one of the most time-consuming and stress-inducing parts of managing a rental property. Whether it’s a leaky faucet, a broken appliance or an emergency like a burst pipe, it’s your phone number your tenants will be calling when something goes wrong. Often, these issues require immediate attention and can interfere with your daily life, especially if they happen after hours or on weekends. For many property owners, this can quickly become overwhelming and stressful, especially for those who are managing multiple properties or have busy personal or professional lives on top of their landlord duties.
Navigating Evictions
While no one enters a lease expecting to evict their tenant, it is sometimes a stressful reality for landlords. When it happens, it can be a long legal process that takes time and energy away from other aspects of your life.
Know that the eviction process differs depending on the state and local laws in your area, and it’s important to follow the legal process to avoid costly mistakes. An improper eviction can result in fines, delays or even legal action.
In an ideal scenario, owning a rental property is a passive income stream that gives you financial freedom. But, if you’re constantly dealing with tenants, maintenance and legal issues, your time is spent far from passive. As you contemplate ownership, make sure you have the proper systems, tools or help in place so both you and your investment can flourish.
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