What It’s Like to Be a Landlord Challenges Hacks From a Property Owner

Leandro Mortenegro
  • Real estate investor Stephen Yin spoke to Insider about the realities of being a landlord.
  • The amount of time he spends on his portfolio varies, but it’s a relatively passive form of income.
  • Outsource and automate when you can, he advised, and expect tenant turnover and evictions. 

After closing on his first investment property in 2020, Stephen Yin felt a sense of relief. 

Generally speaking, the closing process will always be tedious, the 27-year-old real estate investor told Insider, “because you’re coordinating among so many parties and there’s a lot of money at stake.”

That was just the beginning of his investing journey. Yin has acquired nine properties over the past two years, which Insider verified. Two of the nine rentals are duplexes, meaning he collects rent from a total of 11 units.

Yin is based in Los Angeles for his day job but buys real estate in Birmingham, Alabama, where he grew up. 

He spoke to Insider about the realities of being a landlord, from dealing with evictions to answering messages from tenants on vacation.

Real estate investing is relatively passive … until it’s not

“By no means do I spend a consistent amount of time on my portfolio weekly,” said Yin, who has a property manager for eight of his homes and manages one himself. “It’s more so on an episodic basis.” 

If he’s purchasing a property, for example, then the weeks leading up to closing day will be busy: “I’ll spend a significant amount of time making sure that all the paperwork is done and that the funds are being wired to the right bank. But when I’m not actively buying, I don’t spend much time on real estate.”

Since he manages one of his properties, he does have to collect rent — his tenants pay him through Venmo — and handle maintenance requests, sometimes on a moment’s notice.

“For example, when I was on vacation in Tokyo two weeks ago, I got a notice from my tenants about a woodpecker problem,” said Yin. “I called pest control and they did the inspection and gave me the report and a recommendation.” 

He references the “80-20 rule” to sum up how much time and effort goes into maintaining his portfolio: “20% of my houses take up 80% of my time. There are some houses, like my first one, where there have been no issues and they are passive in that I don’t need to do anything except pay the mortgage.”

Outsource and automate where you can to save time and energy

Yin outsources the property management to every house except the one that he directly manages. His property manager, who he found through referrals, does everything from communicating with tenants and filling vacant units to setting rent prices.

Especially if you’re investing out-of-state, having a good property manager on your team is completely worth the cost, he said. 

Yin’s manager charges 10% of the monthly gross rent, which is typical, he said. Plus, a manager may collect 10% of any maintenance charges that you incur and a portion of annual tenant renewal fees, “but the majority of their income comes from them taking a cut of your monthly rent,” he explained. 

He also has a team on the ground that he trusts and can call anytime, including a general contractor and pest control, which is particularly important in the south, he noted. 

One thing that has made Yin’s life as a landlord easier is setting up automatic payments for expenses like home insurance and his mortgage payments. It saves time and guarantees that he’ll never miss a payment, which is a mistake he made early on.

“Set a calendar reminder that alerts you when you should review the insurance policy on your house,” he advised. “If you don’t renew it, that jacks up your premium for the next year and you’re in violation of the law because every home needs to be insured. That was a mistake I made.”

He also automates his savings, which helps him save up for future properties. On the first of every month, he sends a percentage of his income into three different accounts: his 401(k), a stock investment account, and a high-yield savings account, which is what he draws from when he needs upfront cash for real estate. 

Expect tenant turnover and evictions

Tenants move out, which means your home may become temporarily vacant and won’t be producing rental income. It’s important to have an emergency fund to cover months like this, among other unexpected home expenses that may arise. 

Yin has some tenants who have been in the property for a decade or more. Another set of tenants are seniors in college who will be moving out next spring. 

Another one of his tenants hasn’t paid rent for the last six months, he said. Yin is currently in the middle of the eviction process, which can be time-consuming and expensive.

“It doesn’t matter how landlord-friendly the laws are in your state, eviction processes are painful,” he said. “In Alabama, the laws are a bit more landlord-friendly, but the person to execute the eviction order from the judge is usually the county sheriff — and the county sheriff usually has a six-month backlog.

“You can’t just go into the house and kick someone out. That violates federal law. You can’t just turn off the electricity and water. That also violates federal law. You have to have law enforcement go and execute an order from a judge. And that takes a long time.”

If you hire an eviction attorney, lawyer fees can add up, he added, “but the biggest thing for me is that you’re losing the monthly rent while also having a mortgage on the house.”

Stress comes with the job of being a landlord. But, ultimately, “the stress is totally worth it,” said Yin, who hopes to build generational wealth through real estate investing. 

“When I speak about generational wealth, what I really mean is being able to spend time doing the things I want to do with the people I want to do it with — and then also giving my future children options to choose what they want to do with their life,” he said. 

“I don’t want them to feel like they have to do something professionally because it pays really well. I don’t think that money should be the main motivator when you make those kinds of important choices. I’m very motivated to give my children that choice one day.”

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