Insider’s experts choose the best products and services to help make smart decisions with your money (here’s how). In some cases, we receive a commission from our our partners, however, our opinions are our own. Terms apply to offers listed on this page.
- I’ve been a landlord for 15 years and my properties have earned me extra income, but I’m ready to sell.
- It’s a good time for sellers, for one thing, and I’m tired of dealing with my rentals.
- Real estate is not “passive,” and it’s getting harder and harder to find professional help.
There are myriad ways to work toward financial independence, and sometimes I feel like my husband and I have tried them all. We have worked in regular 9-to-5 jobs, juggled multiple side hustles, and invested in stocks, bonds, ETFs, mutual funds, and even crypto. We have also been self-employed in some capacity for more than a decade, which often feels like having 10 different jobs at once.
We even bought a few rental properties in 2007 and 2008, which we are still dealing with today. However, we are currently in the midst of selling both of the single-family homes we own outside our primary residence, and for more reasons than one.
That probably sounds crazy considering there are all kinds of financial experts who recommend getting into the landlord business right now. From blogs to message boards to early retirement Facebook groups, it seems like real estate investing has been all the rage for the last few years.
However, I have never been scared to go against the grain. After being a landlord for more than 15 years, I cringe a little when I hear (or read) so-called “experts” in the early retirement crowd talk about buying rental properties as if they offer the ultimate path to quitting your 9-to-5.
The reality is, being a landlord is a ton of work, and it may or may not be worth it for you depending on your risk tolerance, your goals, and your willingness to deal with everyday hassles and repairs.
Here are the reasons we’re ready to stop being landlords as soon as possible, and why investing in real estate is not for the faint of heart.
Insider’s Featured Real Estate Investing Platforms
Reason #1: Now is a great time to sell
The main reason we’re selling our rental properties right now is the same reason now is not a great time to invest in rental real estate in many markets.
Real estate prices are high pretty much nationwide, and they are downright exorbitant in many major cities across the United States. In fact, the National Association of Realtors (NAR) reports that the median sales price of existing homes increased 10.8% nationally from August 2021 to August 2022. Crazy enough, that increase comes after 125 consecutive months of increases before it.
We are closing the sale on the first rental home we have been able to sell in early September, and the sales price is more than twice what we paid for the home in 2008. Since we bought the home, we have also done minimal updates and repairs other than replacing the HVAC system for $5,500 and getting a new roof that was covered by homeowners insurance. Since the home was our first primary residence when we bought it in 2008, we only put $3,000 down as well.
Our last set of renters also lived in the home for 13 years, so they essentially paid it off for us. At the end of the day, all these factors tell me that we’re selling at a somewhat optimal time in a financial sense.
All told, we’re going to walk away from the sale of our first rental property with about $150,000 after accounting for income taxes, realtor fees, and other charges.
Reason #2: Being a landlord is not passive at all
The second reason we’re selling our properties is the fact we’re just tired of dealing with them. No matter what anyone says, being a landlord is not passive at all — even if you have good renters, or if you use a management company.
The fact is, you will get calls and emails about things from time to time, and often at times that don’t work for your schedule at all. Over the last few years, we have fielded calls to have HVAC units serviced or repaired, to deal with a falling tree, and to negotiate with renters who couldn’t make their monthly payment on time.
My rental properties do provide me with income that could make up for these hassles, but there are more passive ways to invest that will never require a phone call or any work on my part. For example, the $150,000 I’ll have to invest from the first home sale provides a steady return of $9,000 per year if the market yields 6%.
Considering I’ll never have to deal with a leaky roof or a clogged sink, that’s a no-brainer for me.
Reason #3: It’s hard to find professional help
Most of us know that it’s hard for businesses to find help right now, and you see it almost everywhere you go. The same is true when it comes to skilled labor, and we found this out quickly when we went to prepare our first vacated property for sale.
Do you know how difficult it is to find professionals who are willing to do drywall repair? Painters? Someone to take on basic handyman tasks?
It’s absolutely impossible right now, and that’s even more true when you need people for one-off jobs without much notice.
My husband ended up taking an entire week off our business to do basic handyman tasks around the home and paint the interior before we put our rental up for sale. He didn’t want to — he had to because we couldn’t find anyone else.
Also, this has been the case with every repair we’ve had to make the last few years. Simply put, being unable to find help when you’re more than willing to pay gets old.
Reason #4: Every landlord has a horror story
The final reason we’re selling is the fact that every landlord has a horror story, and we feel we’re due a bad experience again at some point.
We had a family of renters leave one of our properties with approximately $6,000 in damage back in 2009, and the situation was immensely stressful to deal with. Not only did they leave the home with soiled and ruined carpets, but all the interior doors were missing, the front window was broken and the exterior door had been busted in.
We ended up having to replace almost everything in the property before we could rent it again, including flooring, doors, several windows and even the kitchen countertops.
After having excellent renters for the last decade or so, we know that we never, ever want to deal with that again. By selling now before we have another bad experience, we won’t have to.
When we were investing in rental real estate in our 20s, we figured we would use the rental income to help pay for our early retirement. But now that we’re older, we’ve found that there are plenty of ways to invest that are a lot more passive, and that the grunt work of being a landlord is no longer worth it for us.
While one of our properties is being sold within the next few weeks, we’ll work on getting the other one for sale when the current renter’s lease ends later this year. Once we unload these properties, our plan involves investing our profits into boring index funds and never looking back.