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A Love-Hate Relationship With Owning Rental Property Real Estate

I have a love-hate relationship with owning rental property.

On the one hand, my rental properties are one of the main reason why I had the confidence to leave work behind. On the other hand, my rental properties are my main source of investment stress.

Whenever there is a tenant issue or a maintenance issue, my mood sours. Weird situations always arise that are hard to predict.

To counteract this change in mood, I’ve had to change the framing. Instead of seeing my rental properties as a source of passive income, I now view them as having a part-time job.

As a fake retiree, it took years for me to accept this mental shift because it felt like going in reverse. But the shift has made a positive mental health difference whenever I need to spend time dealing with rental property issues. Now when issues arise, I no longer feel as stressed because it’s just a part of the job.

Let me share an example of why I hate being a landlord and an example of why I love being a landlord. Then maybe you can better decide whether owning rental property is right for you.

Why I Hate Being A Landlord: Random Stressful Issues

In August, I had my sister and boyfriend come to visit from New York City. They stayed at one of my rentals that used to be our old home. The ground floor is vacant, which I use as an office and as a place to stay for friends and family. The upstairs is rented.

Supposedly, when my sister and boyfriend came in that night they forgot to lock the side door. Or perhaps it didn’t fully latch. They thought they locked it, but there’s no proof that they did or did not. Not a big deal 99.9% of the time.

Unfortunately, that night, a burglar went in and stole the upstairs tenant’s $3,000+ bike from the garage, which wasn’t locked to anything. The security cameras somehow didn’t pick up anything. So there is also no proof a burglar stole a bike.

The garage is a common area meant for a car. But my tenants use it as storage and put a lot of valuable stuff there. We’re talking a bike, skis, furniture, new tires, and more. When we used to live there, all we had in the garage was our car and paint cans. We are minimalists by comparison.

Am I responsible for the thief’s actions? Debatable. All I did was provide my sister and boyfriend a place to stay for a week instead of them having to pay $300+/night at a hotel. My good deed backfired.

Luckily my tenant had renter’s insurance, which I require for all tenants. The bike was 100% covered by insurance. Hooray! He got a new bike. But then my tenant asked me to pay for his $500 insurance deductible.

Different Philosophies On Responsibility

At first, I was taken aback because I didn’t feel responsible for a thief’s bad actions. If a thief stole something of mine from the garage because my tenants left the garage door open accidentally, I would just chalk it up to bad luck. It was my decision to leave things in the common space. Further, I’ve always paid my insurance deductible when something unfortunate happens to me.

When I was a tenant, there was a ceiling leak that leaked onto my laptop all night. What are the chances?! The leak ended up destroying my laptop so I filed a claim, paid the deductible, and got a new one. I didn’t ask my landlord for money. I just chalked it up to bad luck and moved on.

But I realize I’ve always had an independent personality. I readily accept bad luck as a part of life. I don’t like to rely on anybody for help.

In fact, I have written articles such as The New Three-Legged Retirement Stool: You, You, And You and Financial Dependence Is The Worst, to explain the importance of not depending on the government or others for your financial future.

I certainly would never ask anybody for money. It feels icky, especially if I have enough to cover unforeseen circumstances.

The thing is, not everybody thinks like me. Owning rental property makes you respect other people’s points of view. Good landlords are flexible.

The Compromise

Instead of making a fuss, I offered to split the cost of the $500 deductible. My tenants, who make over $300,000 a year agreed. It was important I stand my ground because what if something else is stolen in the future? There needs to be skin in the game.

We made lemonade and discussed ways in which to bolster the property’s security system. Safety trumps all issues. I also told my tenants that I will not be responsible for future thefts in the garage and they agreed.

Finally, in my future tenant lease agreements, I will explicitly include a clause that states tenants are responsible for their property in common areas. I thought this was standard, but apparently not.

Funny enough, one security measure we agreed to of always locking the side door to the garage is not always being followed. About 25% of the time I come over and the door is unlocked.

Another time I stopped by and the tenant’s house and car keys were left in the front entrance for all to see! Good thing I was there to take them out and notify them. Otherwise, what other mishaps could there be?

You can see how having to deal with these inconsistencies can be a real pain in the ass. Alas, such issues are part of the job of being a landlord.

Why I Love Rental Property: Fewer Exogenous Variables

Now that I’ve shared an example of why I hate being a landlord, let me share an example of why I love owning rental property.

Almost three years have passed since the pandemic began, yet China is still going through COVID lockdowns. The country has a “zero COVID” policy, yet their COVID case count surging to all-time highs. As a result, the government is barricading citizens in their condominiums and setting up quarantine camps.

If you want to appreciate your freedom, spend time on social media checking out the videos and pictures of the Chinese government’s crackdowns. Here’s a milder example below.

Given the intense crackdowns, stock investors are now worried about rolling supply chain issues. After all, if people are protesting in China, who are going to make our iPhones and many other goods?

The S&P 500 recovered from an October 2022 low of 3,577 to 4,030 on November 25, 2022. Equity investors were feeling hopeful the Fed won’t ruin the world thanks to clear signs of moderating inflation.

Unfortunately, once the world recognized China’s dire COVID situation, stocks sold off once more.

Stock Investors Have No Control Over The Future

Being a passive investors feels great when your investments go up. But sometimes you feel hopeless and just want to do something when your investments go down.

If you are an active investor or have the majority of your net worth in stocks, the situation in China may be maddening. Just when you thought stocks turned the corner, another exogenous variable outside of your control rears its ugly head.

What’s next? The invasion of Taiwan? A terrorist attack? A uncovered Ponzi scheme? Another COVID mutation? The number of exogenous variables that can negatively affect stocks in the short term are endless.

China may never ease up on its zero COVID policy. As a result, global stock investors will always be at the mercy of how many people the Chinese government decides to round up.

If a citizen journalist so happens to capture a video of a Chinese policeman in a white hazmat suit beating up an old lady for wanting her freedom, stocks may sell off again.

I’ll still always have at least 25% of my net worth in public stocks due to its 100% passive nature and historical performance. However, stocks are not my favorite way to build wealth due to its volatility and lack of control.

More Clarity Investing In Real Estate

With real estate, there are no supply chain issues or endless exogenous variables to worry about. In fact, severe COVID restrictions actually helped rental property owners because more people demanded and appreciated housing. During times of uncertainty, the demand for real assets go up.

Most of the time, all I have to do is make sure each rental property is in good condition so that my tenants are happy. When random situations pop up I get them resolved in as efficient a manner as possible. So long as my tenants are compliant with the lease terms, life is good for both parties.

Yes, I have to pay attention to interest rates and the strength of the local economy. A natural disaster or accident could occur, which is why I have homeowner’s and auto insurance. And sometimes the government passes detrimental laws against real estate. But for the most part, if you screen your tenants well, real estate provides more clarity and peace of mind.

Without any daily updates on a rental property’s value, a landlord can just focus on operations. The long-term combination of paying down principal while seeing property appreciation is a powerful wealth generator.

Love / hate relationship with owning rental property

Related: Real Estate Or Stocks As A Better Investment

Find Your Ownership Limit And Then Simplify

These random issues that keep occurring for landlords are the main reason why I am no longer buying rental properties. I self-manage three rental properties in San Francisco. But that’s all I can handle.

Since we bought our “forever home” in mid-2020, all new capital allocated to my real estate bucket is invested in 100% passive private real estate. Give me the income and stability of real estate without having to do any work!

Follow the simple wealth-building strategy of buying a primary residence to get neutral real estate. After 2-10 years, rent out your home and buy a nicer primary residence. Repeat this process in your lifetime and you’ll build a healthy rental property portfolio to take care of you in retirement.

Discover your rental property ownership limit and do not surpass it. Because once you surpass your limit, your rental properties will bring you more dismay than joy.

Sticking to an appropriate asset allocation based on your risk tolerance, age, time, and goals is important. This way, money will seldom ever overtake your life so you can do more of what you want.

Reader Questions And Recommendations

Readers, do you have a love / hate relationship with owning rental property? What are some of the things you appreciate about being a landlord? What are some things you hate about being a landlord? What’s your rental property ownership limit?

To invest in private real estate passively, check out Fundrise, my favorite real estate investing platform. Fundrise invests predominantly in Sunbelt single-family and multi-family homes, where valuations are cheaper and yields are higher.

To get an affordable homeowner’s and auto insurance policy, check out PolicyGenius. You can compare real, free quotes in minutes. 

For more nuanced personal finance content, join 55,000+ others and sign up for the free Financial Samurai newsletter and posts via e-mail. Financial Samurai is one of the largest independently-owned personal finance sites that started in 2009. 

A Love-Hate Relationship With Owning Rental Property Real Estate is written by Financial Samurai for

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IRS Out For Blood More Than Doubling Penalty Interest

IRS taxes increase

In a blatant act of financial tyranny, the IRS is intensifying its assault on hardworking Americans by shamelessly jacking up the interest penalty on underpaid taxes from a pitiful 3% to an exorbitant 8%. This calculated move, recalibrated quarterly, serves as a stark reminder of the insatiable appetite of the IRS, an oppressive behemoth relentlessly extracting every last penny from citizens already shackled by burdensome taxation.

Specifically targeting non-corporate taxpayers, the IRS demands the federal short-term rate plus an additional three percentage points, a blatant money grab that directly targets struggling self-employed individuals, independent contractors, and gig economy workers. These individuals, already grappling to make ends meet, find themselves in the crosshairs of a government voraciously hungry for more of their hard-earned wages.

For those daring to resist this blatant financial coercion and falling short on their payments, brace for the punitive underpayment penalty. There’s a meager concession – if the amount due is under $1,000 after begrudgingly considering credits and other tax factors, citizens might receive a temporary reprieve from the claws of the taxman.

This audacious maneuver puts the self-employed and independent contractors in the IRS’s oppressive grip, coercing them to make quarterly estimated tax payments under the looming threat of severe financial retribution. The January 16, 2024 deadline for the fourth quarter of 2023 is fast approaching – a date that casts a dark shadow over those grappling with the suffocating weight of government overreach.

While the regular W-2 employees might momentarily sigh with relief as taxes are conveniently siphoned from each paycheck, tax experts issue a stern warning against such complacency. Joseph Doerrer, a CPA and financial planner from New Jersey, challenges individuals to scrutinize their tax situation, posing the provocative question, “Are you where you should be?” A question that echoes as a stark reminder of the government’s overreach into the pockets of hardworking Americans.

One taxpayer, Sameet Durg, found himself blindsided by an underpayment penalty reaching into the thousands – an unwelcome surprise that serves as a chilling testament to the relentless demands of the IRS. Durg, a marketing executive, now watches his finances with unwavering vigilance, refusing to endure a hefty hit come April.

As the IRS unabashedly cranks up the interest penalty, taxpayers are left grappling with the heavy-handed tactics of an agency that seems insatiable in its quest to confiscate more of their hard-earned money. This move underscores the urgent need for citizens to vehemently resist the oppressive tax regime, actively defy the IRS’s overreach, and reclaim sovereignty over their wages.

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GUILTY! Sam Bankman-Fried Faces Over 100 Years in Prison

GUILTY! Sam Bankman-Fried Faces Over 100 Years in Prison

( – Sam Bankman-Fried has been found guilty of all charges related to the collapse of his Bitcoin exchange, FTX.

“A New York jury in Manhattan federal court agreed with prosecutors that Bankman-Fried defrauded investors, customers and lenders in connection with the collapse of his crypto empire,” reported Fox Business.

“Prosecutors accused Bankman-Fried, who founded and controlled both FTX and sister hedge fund Alameda research, of misappropriating and embezzling billions of dollars in FTX customer deposits, scheming to mislead investors, and instructing other executives at his businesses to do the same,” it added.

Bankman-Fried was charged with five charges of conspiracy and two counts of wire fraud in the first two criminal trials.

The maximum sentence for each crime was 110 years in prison.

The hearing for Bankman-Fried’s sentence has been scheduled for March 28.

The Southern District of New York’s U.S. attorney, Damian Williams, commended the decision and said that Bankman-Fried “perpetrated one of the biggest financial frauds in American history.”

“The cryptocurrency industry might be new, the players like Bankman-Fried might be new,” Williams said. “But this kind of fraud, this kind of corruption, is as old as time.”

NBC News gave some background information and historical context before the decision:

“FTX and Alameda quickly collapsed in November 2022 after some of their financial liabilities were exposed.

The fact that Alameda had taken billions of dollars from FTX’s customers and that much of Alameda’s balance sheet was comprised of digital currency assets it had created was central to the case against Bankman-Fried.

Unnerved by disclosures about the firm’s financial position, many of FTX’s customers tried to get their money back. That set off the equivalent of a bank run.

The value of Alameda’s investments crashed, and FTX couldn’t return much of that money because it had been given to Alameda. Some went to the fund’s lenders, and billions were spent on sponsorships, commercials, and loans to top executives. That, too, was a major part of the case against Bankman-Fried.”

Following the collapse, more FTX and Alameda executives were prosecuted, including former CEO of Alameda Caroline Ellison, co-founder of FTX Gary Wang, and chief technology officer of FTX Nishad Singh.

All three pleaded guilty, agreed to cooperate, and testified against Bankman-Fried.

In exchange for their cooperation, they will receive less severe punishments.

In his defense, Bankman-Fried stated that he never intended to deceive anyone and that, following the failure of FTX and Alameda, the government had been searching for someone to blame.

“Mr. Bankman Fried maintains his innocence and will continue to vigorously fight the charges against him,” Mark S. Cohen, counsel to Bankman-Fried, said in response to the verdict.

Williams stated that he hoped the conviction would be an example for others.

“It’s a warning, this case, to every single fraudster out there who thinks that they’re untouchable, or that their crimes are too complex for us to catch, or that they’re too powerful for us to prosecute, or that they could try to talk their way out of it when they get caught,” Williams said. “Those folks should think again.”

Copyright 2023.

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Brutal ‘Bidenflation’ Has 1 in 6 Retirees UNRETIRING

Brutal 'Bidenflation' Has 1 in 6 Retirees UNRETIRING

( – According to an analyst, “Bidenflation” may be a long-term issue, leading one out of every six pensioners to contemplate retiring early.

It will undoubtedly persist if Biden wins re-election.

In the far-left USA Today, Patrice Onawunka laments the possibility that the “financial insecurity” brought on by inflation—which was brought on by “reckless federal spending”—will last forever.


“People have connected the dots between ill-advised government policies and harsh economic outcomes. Spending nearly $2 trillion on government transfers to almost every household during supply-chain disruptions and exacerbated labor shortages caused inflation to accelerate. Putin’s invasion of Ukraine and other production disruptions worsened it.

The Biden administration and congressional Democrats passed a climate change bill that they falsely labeled the Inflation Reduction Act in hopes of fooling Americans, especially seniors.

The bill never addressed rising food, housing, or energy prices — households’ most basic and critical needs. Any climate savings would take years to come to fruition and could be offset by new costs for families — tens of thousands of dollars — on new electric vehicles.

Meanwhile, the green subsidies cost more than three times what the law’s supporters claimed.”

What could be crueler than adopting a law that does the exact opposite and is titled the Inflation Reduction Act?

55 percent of those who have already had to un-retire claim it was because they needed more money.

The White House and corporate media continue to lie to us by promising that the inflation issue will pass quickly, yet nothing ever appears to change.

Everything’s cost is skyrocketing especially housing. Meanwhile, Joe Biden is exerting every effort to keep inflation high. The federal government spends like a drunken sailor, which cheapens money.

Even worse, Biden has permitted countless millions of illegal immigrants to enter our nation, which raises the price of housing by increasing demand for limited items like housing.

Housing is a necessity, Onwuka tells us, unlike other discretionary expenses. Rent costs in America are rising, disproportionately affecting older folks and those with low incomes, especially those on fixed budgets.

In addition, she states that “10 million households headed by people aged 65 or older spend more than a third of their income on housing, and half of these pay more than 50%.”

See what happens when you factor millions of illegal immigrants into the housing problem.

Biden punishes Americans who have lived by the book, paid their taxes, saved money, and worked hard. He is putting the interests of millions of illegal aliens—who raise demand for everything and drive up prices for everything—above the interests of those Americans.

“In a little over four years, I intend to retire. I’ll never be wealthy, but since I started my first 401K in 1994, I’ve been setting money aside for that moment. I enjoy both my job and my coworkers.”

That isn’t the problem. The dream is the problem… the desire to live out your third act with the freedom and resources to do whatever you want.

Similar actions are taken by many working Americans who save money and forgo immediate enjoyment to prepare for their elderly years. As a result, I find it difficult to understand what it must be like to enter a dream before having it destroyed.

The anguish of coming out of retirement, returning to the grind, and facing Monday mornings all over again escapes me.

The only idiots, child abusers, and masochists vote Democrat.

Copyright 2023,

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