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For me it's about focusing on the long game. Building equity, steady passive income, and the freedom of owning assets that grow over time. The key to managing stress is setting strong tenant standards, automating what you can, and using good property managers. When the cash flow and future payoff outweigh the hassles, it feels worthwhile.
Subject Expert
Real estate usually has a few benefits:
- cashflow
- appreciation
- rent growth
- principal paydown
- tax benefits (both short term and long term)
How long have you owned the rentals? How much have they appreciated? Have you done any analysis on what the cash you put into the property initially would have done if it was invested in index funds instead?
There are plenty of scenarios where cashflow doesn’t tell the whole story of the value of a rental property. But in the event that you aren’t cashflowing much, aren’t appreciating much, and it’s stressful… it may be time to sell and move that money into other investments!
What is the reason for high turnover? Just make sure it’s not you. Tenants do not want to see you or hear from you. As long as they’re paying rent on time, they should have their privacy. My partner and I rented for nearly 15 years before buying. We had one landlord that came to “inspect” our home every quarter. It was weird and felt creepy. Left as soon as the lease was up. Another would raise our rent every 6 months like clockwork, even if it was only $20. Why bother? Made us feel like they could jack it up at any moment. Renters want to feel like they’re living in their home, not someone else’s. That should be your goal…long term renters, preferably a young family that doesn’t want to uproot the kids from school or change their neighborhood friend group. Stay away from young couples or friend roommates with bad credit. Poor credit is a proxy for so many other negative behaviors.
Coach
I do an annual assessment of the effective CapRate (Profit/Value)… once it drops below 4%-4.5%, I sell… but we have three right now… one in Hoboken, NJ, which is going on the market in Mar/Apr 2026… the cap rate fell below 4%, and I can probably get $1.5-$1.75M for it… another in Morristown, NJ, which is still around 5%… but it’s technically hers, so she can do whatever she wants with it, I just advise… we have a townhouse in McKinney, TX, that is around 6%, but that’s a longer term hold, because the market around it is exploding…