When to Stay Home!

The rental property business is a little different than most other businesses. In most businesses and jobs, the more hours you put in during the week, the more pay you expect to receive. In the rental property business, you receive your pay at the beginning of the month (the rent) and then you see how much you can keep.

There is a certain amount of work that must be done each month. Fixing water leaks, electrical problems, heating and air conditioning problems, and other urgent maintenance issues are examples of things that must be done. Each of these tasks decreases the money that you keep. However, if you don't do them, you will lose tenants and won't receive as much rent the next month. Therefore, all of these tasks MUST be done.

Then, there are the additional projects that are always lingering. Installing a new roof on this property. Painting the exterior of that property. Upgrading the electric on this duplex. Installing new electric baseboard heat in that apartment. These are all examples of jobs that could be done, but don't have to be done now.

One of the important responsibilities of the owner of rental properties is to control the pace of these tasks and thereby manage your cash flow. With several dozen rentals, I find that working about 16 hours per week allows me to complete all the "must do" jobs and complete some "can do" jobs, while still leaving enough cash flow to support my life style. If I work much more than that, the materials that I buy will start to eat away at my cash. If I work less than that, I'm not keeping up with the longer term "elective" maintenance.

So, I guess that the point of this lengthy blog is to say that one of the tricks of the trade is to know when to stay home. The rental property business is one where being a work-aholic can be almost as bad as being lazy. Of course, all of this assumes that your business is already up and running. While you're expanding your business, expect to work hard and long!