As a landlord since 2005, I’m constantly faced with the dilemma of selling a rental property or renting it out whenever my tenants move out. The older and wealthier I’ve gotten, the more I prefer to sell rather than rent out.
Being a landlord can sometimes create some very unpleasant experiences. Whether it’s getting paid late, experiencing damage, having to fix something, or resolving some type of misunderstanding, being a landlord is not for everyone. You need to be very disciplined and have good patience.
After I reached my limit of managing three rental properties, I stopped buying. Instead, I started investing my cash flow in private real estate funds that invested across the Sunbelt. This way, I could diversify my real estate holdings, and more importantly, earn more 100% passive income. Being a dad is a full-time job.
Once again, I’m faced with the dilemma of whether to rent out my investment property or sell it. But this time, we are in a high inflation environment. If you’re facing the same dilemma, I will walk through the pros and cons like I do with other dilemmas in my book, Buy This, Not That: How To Spend Your Way To Wealth And Freedom.
Every dilemma I face is viewed with a 70/30 decision-making framework. After analyzing the situation, my goal is to make the right decision at least 70% of the time with 70% confidence or greater. At the same time, I recognize that about 30% of the time, I will have made a suboptimal choice. I also accept there will always be some level of uncertainty.