If you’re considering your first rental property, don’t fool yourself into thinking you’ll be earning passive income.
The bottom line is owning rental properties is a job. It’s not a full-time job. It’s not even a regular, part-time job. But, it is a job.
There will be tenant issues, work orders, money spent, and tough decisions to be made like in any other business.
For me, the benefits of owning rental properties significantly outweigh the downsides of being a landlord. It’s a tradeoff that I would happily make again and again.
But, I wouldn’t be saying that if my wife wasn’t also fully committed.
Before you buy a rental property, I encourage you to talk to your spouse first. Make sure you both are on the same page.
No, you do not have to have an equal division of labor.
Yes, you each have to commit to the good and the bad that comes along with owning rental properties.
If you both can make that commitment, you have the best shot at owning your properties for a long time and reaching that ultimate goal: financial freedom.
Before building out the rest of your real estate team, get on the same page with your spouse.
Owning rental properties should not be a solo adventure. The entire experience is better when you have someone to share it with.
Isn’t that true for most things in life?
Whether it’s a project you’re working on or a vacation you’re taking, it’s better when you do it with other people.
Owning rental properties is no different.
In fact, the most successful rental property investors have a team of professionals working with them.
Having a good team in place will help you avoid mistakes and stay motivated so you can keep your properties long-term.
It’s not an exaggeration to say that having the right people on your team can make or break your investing experience.
I’ve seen too many investors sell their rental properties after a couple of years because they didn’t have the right people on their team. They end up making preventable mistakes and give up because being a landlord is too hard.
Unfortunately, that means they give up their properties long before getting the benefits from cash flow, appreciation, debt pay-down, and tax advantages.
If you’re going to take on the challenge of being a landlord, you might as well hold your properties long enough to reap the benefits.
And, you should take all the help you can get along the way.
There is plenty to say about building out your real estate team. And soon enough, we’re going to talk about the key professionals that can help you run your rental property business successfully.
But, that’s all for another day.
Before we get to any of that, we need to talk about the single most important member of your team:
Your spouse.
The same holds true whether you have a significant other, partner, girlfriend, boyfriend, or anyone else you share your life wife.
Don’t worry about analyzing the numbers and finding the perfect deal. The rest of your team came wait.
Start with your spouse.
Here’s why.
Your spouse is the single most important person on your team.
To be a successful rental property investor, your spouse needs to be on board.
Even if you are going to be the one actively running the business, you won’t get very far if your spouse is not as committed as you are.
Before anything else, the first thing you need to do is sit down with your spouse and talk about why you really want to own rental properties.
That’s because owning rental properties is all about commitment.
It’s a financial comment, a time commitment, and most of all, an emotional commitment.
With these kinds of commitments involved, it’s essential that your spouse understands the full scope of what you’re both getting into as rental property investors.
Here’s what I mean.
Owning rental properties is a financial commitment.
This one should be obvious. Owning rental properties is a major financial commitment. It takes capital to buy properties and capital to maintain them.
When you choose to invest your hard-earned money in rental properties, that means you’re not spending that money elsewhere.
That might mean sacrificing retirement savings. It could also mean having less money to spend on your dream home. Or, less money to spend on vacations.
The point is that before you make the financial commitment, your spouse needs to be on board with why you’re making these sacrifices.
I’m fortunate that my wife and I have been on the same page with our rental properties since Day 1. Neither one of us needed any convincing once we did our homework and learned what was possible.
Today, we both understand why we’re still doing it: owning rental properties speeds up our journey to financial freedom.
It took some major financial sacrifices to get here, but we made those sacrifices together.
As the most obvious example, we delayed buying our “forever home” until I was almost 40 and we already had two kids.
Instead of buying a home in a nice neighborhood to raise our kids, we used our savings to buy rental properties. We were doing something different and it was important to be committed to our plan.
It wasn’t easy to see our friends and family members buy beautiful homes in wonderful areas. We definitely noticed more than a few confused looks when we would have people over to our small apartments in the city.
At times, we both wondered whether we were making a mistake.
As it turned out, the trade-off was well worth it.
Owning rental properties is a time commitment.
Make no mistake about it, owning rental properties is a time commitment.
We’ve talked about how owning rental properties means having a job. For lawyers and professionals, this means having a second job on top of a primary job.
Even with the best team and systems in place, there’s no getting around the fact that owning rental properties will always be a time commitment.
What does the time commitment look like? What does this have to do with your spouse?
Depending on your availability and skills, the time commitment will vary from one landlord to the next.
You might be the type that heads over to the property every weekend to mow the lawn. To take it one step further, maybe you’re the type who has the skills to handle all maintenance requests yourself.
Or, you might handle all showings and tenant issues personally.
The truth is that in the beginning, many rental property investors do all of the above themselves.
Rental property investors think of this time commitment as “sweat equity.”
Sweat equity is what you contribute to your business but don’t exactly get paid for. When cash flow is tight, as it is for most beginners, we make up for it with sweat equity.
The more jobs we take on ourselves, the less we pay out to other people.
The tradeoff is that the more sweat equity you put into your properties, the less time you have to spend at home with your spouse.
If your spouse is not on board with you being away from home, it’s going to be difficult to succeed as a rental property investor.
If you have young kids, it’s even harder. When one spouse is at the rental property, the other spouse is usually alone with the kids. Anyone with kids knows which of those two jobs is harder.
For example, there have been entire weekends that I’ve spent fixing up one apartment or another.
By the way, if you’ve ever wanted to take a tour called “The World’s Worst Drywall Repairs,” I’ve got you covered.
If it’s not repairs eating up your free time, it could be analyzing new properties, doing apartment showings, meeting with contractors, or basic bookkeeping.
With all these time commitments, I’m lucky that my wife and I are on the same page when it comes to our rental property business. We split up these tasks and cover for each other when one person is busy with other responsibilities.
Yes, you can outsource these jobs. We outsource as much as we can. But, there are certain jobs that you’ll always need to, or want to, handle yourself.
As just one example, we do all our showings ourselves.
Finding the right tenants is the most important job in owning rental properties. If we outsourced this particular job, we could end up with tenants who could cause us major stress for the next year.
Regardless of the recipe that works for you and your spouse, have the conversation before investing in rental properties.
Make sure you each understand the time commitment involved.
Owning rental properties is an emotional commitment.
The financial commitment and the time commitment are only the beginning.
Most of all, owning rental properties is an emotional commitment.
Without having a spouse on the same emotional wavelength as you, it will be very hard to succeed as a rental property investor.
When you own rental properties, there will be stressful times and you’ll want to lean on your spouse for support.
There will also be moments to celebrate, and you’ll want to share those moments with your spouse.
If your spouse is not on the same wavelength as you, these moments can feel very lonely. The lows can feel much lower and the highs don’t feel quite so high.
Without someone to commiserate with and celebrate with, you’ll be more likely to give up.
My wife and I have endless stories about our experiences as landlords that very few other people would truly appreciate. We can each list off the jerks we’ve rented to and the biggest headaches we’ve encountered.
We once offered a lease renewal to a tenant at her same price. She responded that she would be happy to stay for another year if we simply replaced the kitchen countertops and appliances, added an additional bedroom and built out some new closets.
Ummm, we’ll pass.
My wife and I can laugh about these moments because we’re both emotionally committed to the journey. Living through these experiences together has helped us stay the course.
Unfortunately, I’ve met a number of real estate investors over the years who tried to go it alone. I think that’s a mistake. Oftentimes, these investors don’t stay invested very long.
It’s not because they bought bad properties or had bad tenants.
The problem was they never prioritized the most important person on their real estate team.
When challenges arose, they didn’t have a spouse to lean on.
When you’re spouse is on board, investing in real estate is a rewarding challenge.
It’s all about the journey, right?
When times get tough in our real estate business, my wife and I lean on each other. When we miss out on evenings with the kids or nights out with friends, we remind each other what it’s all about.
We remind each other that we wouldn’t be where we are today if we didn’t start buying rental properties in 2018.
We both realize the commitments involved, whether it be our money, our time, or our emotions. If we weren’t in this together, there’s no way we could run our rental property business as well as we do.
Before you buy a rental property, I encourage you to talk to your spouse first. Make sure you both are on the same page.
No, you do not have to have an equal division of labor.
Yes, you each have to commit to the good and the bad that comes along with owning rental properties.
If you both can make that commitment, you have the best shot at owning your properties for a long time and reaching that ultimate goal: financial freedom.
Did you talk to your spouse before buying rental properties?
Do you run your rental property business with your spouse?
What lessons have you learned along the way?