“Oh my gosh, your life must be so stressful. Dealing with collecting rent, evicting tenants, doing repairs, showing apartments. You must never get a break!”. These are some of the most common reactions I get from people when I mention that I invest in real estate.
Now let’s discuss how “stressful” it really is.
I’ve been investing in real estate since 2010, a total of ~60 months. During this period I’ve had to evict two tenants, one which left amicably and the other which took a 2 month process to evict. I’ve also performed mostly routine repairs every couple of months. The one non-routine emergency repair that I’ve experienced was a unit that experienced frozen pipes two winters in a row and required a few dozen hours to fix properly. Oh and I’ve also had to purchase a spray foam insulation kit and spray the basement walls in one of my units which had excessively cold floors above during the winter months.
The remainder of the tasks have been largely routine and since 2012, outsourced to a property management firm. These routine tasks include advertising vacancies, performing tenant checks, preparing leases and collecting rents. These tasks average a few hours each month per unit.
As you can see, I have indeed been stressed a few times as a result of investing in real estate. But in no way have I been stressed nearly as much as anyone would initially fear. I have had to deal with two evictions, a handful of repairs and routine tasks that take a few hours each week.
Had I not invested in real estate I would have spared myself these few stressful situations as well as a few hours of work each week. But then what would be the real cost of doing that? I would have given up being able to retire nearly 25 years earlier than most people can ever dream of. You see, my portfolio conservatively increases my net worth by $280,000 each year as a result of appreciation, mortgage paydown and cashflow. For every five years I hold onto the real estate I can retire at least fifteen years earlier (and that’s accounting for capital gains taxation and inflation)!
Let’s see, I can invest in real estate and retire 25 years earlier or, alternately, I can spare myself a few additional hours of work each week and then subsequently go to work each and every day for an additional 25 years; only retiring when I’m 65 years old (or older). Which one is the real cost?