Regretting buying property?!

Hi guys,
I purchased an investment property recently and am now having a bit of a freak out about whether or not it is worth the whole process!
There seems to be money that has to be regularly thrown at maintaining the property etc,and I've started to hear horror stories about horrible tenants (yet to have anything bad happen with my tenants although they have only moved in recently).
What are people's thoughts on this??is it worth the many years of stress?i wonder if I've made a mistake and should have just kept the money in the bank in savings and bought upgraded m own property!
How do those of you with multiple properties cope?!
Cheers!

 

Buyers remorse. Your over thinking it. Horrible tenants is solved by a decent PM. Multiple properties actually make it easier what are the chances of your whole portfolio been vacant or been trashed the percentage of that happening would be very slim. It is very much worth the stress.

 

Whoooaaa....cabellero....I think you are overthinking it....the chance of horrible tenants is low.

If you want to avoid maintenance do a quick comestic reno and replace the thing which may require maintenance. It might be just coincidence that you have a sudden increase maintenance.

 

Worth while to retire early, self funded or partly funded retiree.

 

Hey, if you're maintaining the property then you're more than likely increasing its value. Keep an eye on what maintenance you're paying for, try to get a trusted tradie to do the work (although I guess a PM is sourcing this for you). You can also try to get a couple of quotes yourself if you think you're paying over the odds. PI is a long term game though and you have to expect to pay money out as well as getting money in (sometimes it feels like it's just going out)!

People will tell you all sorts of negative stuff about a range of things. Do the people you're hearing from having any actual experience of rental property? Even if they do, they don't own your property. I rang a guy from an investment company a while ago with a view to sourcing a new IP. I already own a few IPs and during the call he proceeded to tell me that I'd need a good PM to manage the properties in the area that I currently own. He had NFI about the properties I own, or the area. I've had hardworking families working for years and paying rent on the properties I own, raising their children and planting the gardens. Basically living well. This guy was so arrogant though. He didn't even bother to ask me if the properties were being badly maintained by the tenants. He just got stuck in with his judgemental attitude (sans any actual basis) and told me I'd need a damn good property manager. He was in Perth. Thank god his arrogance prevented me from buying in Perth a couple of years ago.

Anyway, my message is that it may not be as bad as you imagine. Look at the numbers and keep in mind the long term picture.

 

I have a massive buffer for expenses that can and will occur. It's a business and in time it gets easier, and you learn to expect a certain percentage for damages and lost rents/vacancies.
Have great insurance in place, (make sure it's terry scheer or your not insured or equivilant),
Also get good managers which try and get you the best tenants possible.
My returns are better than the banks 3.5% high interest account so it's easy to live with. Overall I don't like rental propertys that much but I love the profits and I understand it.

 

Everything worthwhile comes with effort, stress and money

 

And dare I say having the right..............ok better not. lol

 

my recent purchase requires me to do some fixing which the building inspection wasn't able to pick up. The recent storm created some issues to the roof and it will be fixed. It helps me to sleep better. My PM was on the ball and tenants are good. So yeah, you will need to maintain the house but think long term.

 

New purchase and new tenants usually mean some maintenance will be required. I would try not to get hung up on small things and think longer term. In a few years with rental increases and some equity growth you will wonder what you were worried about.
Its normal to question your purchases and wonder if you have made a mistake.
Just try and remember why you purchased a property in the first place.

 

Hi @Amber83 i purchased my first IP in April last year. I had similar feelings it was overwhelming receiving the first lot of bills and dealing with outstanding maintenance issues from the previous owners but it took me 6 months to get into routine with of the finances and i deal with any maintenance issues with my PM straight away.

Stick with it and there will be rewards.

Ryan

 

I honestly believe your issue is not about whether or not you will have bad tenants.

You are listening to 'horror stories' which is stressing you out. Your also questioning the entire proposition of investing in real estate altogether.

IMHO the issue isn't about a potential bad tenant (I can guarantee you buy enough ips and with time you will get a rotten egg), but more about needing to tweak your approach/expectations a bit if you want to be successful with investing in real estate long term.

Just my opinion and I hope you take it as constructive feedback.

 

I got two out of two properties with tenants in arrear @sash so hitting the jackpot on those

But in seriousness @Amber83 you have NOT got a bad tenant yet, and it is part of the process if you do. There are times I think to bloody sell one of the property but well, going to hang in there for now. Re look at your numbers and the reason you buy this property, and how it is your first step towards the reason you invest

 

Where are they? Is the property manager on top of the issue?

 

If you have a tendency to worry don't just think about what could go wrong, put risk mitigation strategies in place:

* Find a reputable landlord insurance provider and go for a level of cover you feel comfortable with
* Figure out your worst case scenario (within reason) and put savings into an offset account to cover this scenario
* Go with a highly recommended PM who won't come to you with every little issue - on the same token, allow them a certain $ amount to carry out repairs so you aren't burdened with the worry

A family member of mine always did their own repairs (as I normally do) but always took it far too personally instead of viewing the property as a business. They sold for $160k. Less than 5 years later houses in the area doubled in value.

 

When a new owner and/or property management agency come on board tenants can have a tendency to report a list of maintenance things as a means of trying to illustrate that it isn't damage they are responsible for. It's a cost of doing property business and should settle down into normalcy after the initial changeover.

 

I have a different view on this than many here.

Property is no walk in the park, especially if the outgoings are draining, people make it out to be easy, but it takes a lot of effort, some find that effort easier than others. (finding, buying, maintaining, managing etc etc )

Only you can decide, but give it some time to see first, I know a lot of people who simply cannot handle it, does in their head, so they do other things, like stocks or just enjoy life.

expect to spend at least a few grand a year on repairs.

All the best.

 

The way you are feeling is so common there's a wiki page for it: https://en.wikipedia.org/wiki/Buyer's_remorse

If you go looking for horror stories, you'll find what you seek. But truthfully, owning properties is not a big deal. Give it some time and you'll sleep well at night.

The earth will continue to rotate, life will go on, your involvement will be minimal and your wealth will grow while you sleep

 

It's a bit like getting a headache and then diagnosing yourself on the Internet. doesn't take long to convince yourself it's a brain tumour. Go cold turkey on the property stories for a bit.

 

The real stress in leveraged property investment comes when you are exposed to the values going down every year, something not a lot of Australians have experienced (except in mining and some tourists areas). For many it has just been sunshine and roses but it can turn to horror pretty quickly in a downturn for the over leveraged.

So my advice if you are worried about stress is don't over leverage, and use a P&I loan, not the more speculative interest only.