Being a real estate investor definitely has its ups and downs. I have seen investors have bad days, bad months, even bad years. I even had one client, who had purchased a very tough property, actually break down into tears during a phone conversation!
So what causes such turmoil with rental property? Vacancy, turnover expense, eviction, replacing air conditioning units, etc. The list can go on and on. But it always comes back to one commonality: MONEY. When there is more money going out than coming in, this can be very stressful on an investor.
The only remedy I know is to simply be PREPARED. This applies to almost any aspect of life. When we are prepared for misfortune, we can get through it much easier than when it blindsides us. The same goes for rental property. Investors need to understand that not everything will go perfect. There will be problems and challenges that arise. When you are prepared for them, you will get through them easily and move on.
Building up a healthy cash reserve is the best preparation one can take. Those that have cash set aside for their properties have less stress and get much more enjoyment out of their property. In the long run, there is less deferred maintenance and more proactive improvements. Property owners that have cash available have better properties, better tenants, and generate more income over time because they have the ability to take care of their property as needs arise. There is a reason they are called Investment properties. They require the Investor to Invest in the property. So if you don’t have a reserve set up for your rental property, do it! You will be better investor, have a better experience, and be happier for doing so.