Brain Games for Housing Providers
By Scot Aubrey
Have you ever looked at your life as a housing provider, considered your property portfolio, and questioned why things just aren’t working out in your favor? If you’ve been doing this for any period of time, the answer is a resounding yes. If you haven’t, well at least you have that to look forward to. Here’s the great thing, you can blame it on your brain, specifically what scientists call cognitive dissonance.
Similar to the person who wants to be fit and healthy but refuses to eat less, eat, well or exercise, landlords who are struggling in the current market have to be willing to make some changes in order to find their success.
Here are a few things to consider if you feel stuck in your current situation as a housing provider:
REASSESS YOUR GOALS:
When you buy a property, you better have some goals or reasons behind the purchase, otherwise what’s the point. Are you buying to create an additional revenue stream? Or to create a long-term appreciating asset? Do you just want someone to cover the mortgage or do you want to have positive cashflow every month? Are you hoping to house a long-term tenant who treats your property like their own, or are you happy having a short-term rental with a new occupant every few days or weeks? Goals change over time and due to other circumstances in your life. No matter where you are in your ownership journey, I suggest sitting down annually and creating or modifying your goal list so it aligns with your current needs. I am doing that right now and have decided to unload a short-term rental that was great for a number of years but has been struggling for the last year. I’ve enjoyed a healthy appreciation for this property and have decided it’s time to sell and hold until I can find a new property that aligns with my goals.
REASSESS THE MARKET:
If you’re like me, you’re tired of hearing the word “rates” in every conversation. For housing providers, rates are important, but not the only thing we should consider when determining the direction we will take with our investments. What are other providers getting for rent near your property? Have rents become stagnant, or worse, dropped in the last year? If you are looking to sell your property, how saturated is the marketplace with homes like yours? How long are they on the market and how much are they going for when they do sell? Is their growth like retail and restaurants near your property that add to its value? Are new businesses, schools or parks coming to the area that will create a greater need for rental housing? There are no simple decisions based on just the questions I’ve suggested here. Taking a look at the larger market around you can help you make the next step a successful one.
REASSESS YOUR TIMELINES:
As we age it is critical to always consider our personal timelines and time commitments it takes to be a housing provider. As a younger investor, maybe the appeal of having short-term occupants and the increased fees they paid was exactly what you were looking for. You didn’t even mind cleaning and prepping the property for the next guest, after all, it was just keeping more money in your pocket. But now you may lack the energy and motivation to process the “hands-on” management style and are looking for the stability of having a good tenant that pays on time and maintains the property. Maybe you want to spend more time with your family or traveling and the prospect of managing tenants doesn’t fit into your timeline. Or maybe you are ready to exit the market altogether and your time as a housing provider has run its course.
Engage your brain by revisiting these three critical parts of your process and be confident in making the best decision for you and your property. Forget what the so-called experts and talking heads say, this is your journey and only you can know what best works for you.
Scot Aubrey is Vice-President for Rent Perfect, a private investigator, and manages short- term rentals. Subscribe to the weekly Rent Perfect Podcast (available on YouTube, Spotify, and Apple Podcasts) to stay up to date on the latest industry news and for expert tips on how to manage your properties.
Members of National REIA can take advantage of special pricing from RentPerfect; the solution for rental property owners and managers for screening & managing tenants. Learn more by visiting www.rentperfect.com or calling 1-877-922-2547.
