5 Stress-Busting Tips for Landlords

Being a landlord comes with pros and cons. And while the advantages generally outweigh the disadvantages, there’s one con that sticks out like a sore thumb: the stress. Landlords have to deal with a lot on an ongoing basis. And if you aren’t careful, this stress can give way to anxiety, which can be paralyzing and disorienting.

The good news is that there are plenty of ways to ward off stress and spend more time enjoying being a real estate investor and landlord. Here are several helpful tips for reducing and eliminating the stress:

1. Buy the Right Properties

You can save yourself from a lot of stress by purchasing the right rental properties in the first place. While there’s a price that makes sense for everything, you’re better off buying properties that (a) need minimal work, (b) are in neighborhoods that have positive momentum and growing demand, and (c) have plenty of cushion when it comes to cash flow. 

2. Take Tenant Screening Seriously

You will make or break your success as a landlord with tenant screening. Other than purchasing good properties, this is the single most important factor. Take it seriously or it will become a huge headache for you and your business.

When it comes to tenant screening, you want to be as thorough as possible. At a bare minimum, you should run a background check, pull a credit check, and speak with each applicant’s current employer to verify employment and income.

Be meticulous during screening. You should feel no pressure to rush through the process. If it takes an extra 48 hours to gather the information needed to make an educated decision, so be it. Every piece of information should be vetted and verified.

“If you catch an applicant lying about anything, however small, shred their application,” landlord and investor G. Brian Davis writes. “If they lie about one thing, their entire application is suspect. Lies are an indicator of other lies, and people who lie on their application have already proven they are willing to deceive in order to get what they want.”

One of the best ways to verify that an applicant is telling the truth on their application is by speaking to at least two previous landlords. A past landlord will usually do other landlords the courtesy of sharing the good, bad, and ugly of one of their former tenants.

3. Hire a Property Manager

The biggest stress factors of being a landlord involve chasing down rent checks, handling emergency repairs in the middle of the night, and worrying about taxes and bookkeeping. The good news is that you can remove all of these obligations from your plate by hiring a property manager.

A good property management company makes your job as a landlord pretty hands-off. They serve as the liaison between you and the tenant, which removes the day-to-day stressors and allows you to focus on the big picture.

4. Disconnect

The problem with being a landlord is that you’re always on call. (Even if you have a property manager, you have to be available to give approval or handle big issues.) To keep your stress levels in check, make it a point to disconnect on a regular basis.

While you can’t go MIA for multiple days at a time, you can turn off your phone and email for a couple of hours each day. This creates space for other things in your life, including family, relationships, exercise, and health.

5. Build an Emergency Fund

So much of the stress of being a landlord can be tied back to issues like cash flow, profitability, and the looming threat of not being able to pay your bills (including the mortgage, insurance, and taxes) if the rent checks stop coming in. And no matter how well-screened your tenants are or who your property management company is, one of the best things you can do is build an emergency fund.

For each property you own, we recommend having enough cash set aside to cover at least six months of your expenses. (This includes the mortgage payment, taxes, insurance, and utilities.) If it costs you $2,000 to keep all of your bills paid, that means you’re aiming for $12,000 in a dedicated checking account.

With a fully-stocked emergency fund, your stress levels go way down. You know that even in a worst-case scenario where there’s no income, you can keep everything covered for six months. This doesn’t mean you can relax and allow tenants to not pay rent, but it does give you room to breathe. Foreclosure is no longer an imminent threat.

Kiss the Stress Goodbye

Anytime you have a business that involves shelter, livelihood, and money, you’re going to encounter some pressure and friction. But if you plan ahead, you can limit the frustrating aspects of owning rental properties and experience less stress.