10 Unexpected Challenges Faced as a Real Estate Property Owner and How to Overcome Them
Navigating the complexities of property ownership can be daunting, but this article demystifies the process with practical strategies and expert insights. Readers will discover how to tackle the unexpected challenges that come with being a real estate property owner, from tenant screening to budgeting for repairs. Armed with knowledge from seasoned professionals, overcoming these hurdles becomes a manageable part of the real estate journey.
- Screen Tenants Thoroughly
- Keep Properties Close
- Budget for Unexpected Repairs
- Assess Renovation Quality
- Account for Permit Delays
- Maintain Clear Lease Terms
- View Property Obstacles as Opportunities
- Identify Predatory Tenants
- Inspect for Hidden Water Leaks
- Adapt to Regulatory Changes
Screen Tenants Thoroughly
One of the biggest challenges I faced as a property owner was dealing with a tenant who stopped paying rent and refused to leave. I tried to work out a payment plan but they kept making excuses and I realized I had no choice but to start the eviction process. It was long, expensive, and stressful. I wish I had done a better job screening tenants from the start. After that experience, I changed my approach by running thorough background checks, verifying income, and always calling previous landlords. I once passed on a tenant who looked great on paper, but after calling their last landlord, I found out they had trashed their previous rental. My biggest lesson? Filling a vacancy quickly isn't worth the risk—taking the time to find a reliable tenant will save you money and headaches in the long run.
Keep Properties Close
One unexpected challenge I faced as a property owner was managing rental properties spread across different areas early in my career. It became a logistical nightmare, so I shifted to buying and managing properties within a 30-minute radius of my home or along my frequent travel route. Another key lesson was the importance of tenant screening-ensuring they have at least four times the monthly rent in net income to avoid payment issues. I also empower tenants by allowing minor repairs and personalization, which fosters a sense of ownership and long-term tenancy. My advice? Keep properties close for easier management, thoroughly vet tenants for financial stability, and create a clear, trust-based relationship to minimize headaches and maximize success.
Budget for Unexpected Repairs
As a real estate investor in Cincinnati, Ohio, one unexpected challenge I faced was dealing with sudden, significant maintenance issues in rental properties. For example, a plumbing failure in a multi-unit building required immediate attention and substantial repair costs. To overcome this, I established a comprehensive emergency fund specifically for property maintenance and partnered with reliable contractors for prompt service. I also implemented regular property inspections to identify potential issues early. My advice to fellow investors is to proactively budget for unexpected repairs and maintain a network of trusted professionals to ensure swift resolutions, thereby protecting your investment and maintaining tenant satisfaction.
Assess Renovation Quality
In my early days as a rental property owner in Chicago, one unexpected challenge I faced was dealing with aging building systems-such as plumbing and electrical-and poor renovation quality from previous owners. These issues often led to ongoing maintenance headaches and made it difficult to provide a positive tenant experience. Given that much of Chicago's housing stock is over 100 years old, even a well-maintained property may undergo renovations every 10 to 20 years. However, despite passing a home inspection, underlying issues with outdated systems or subpar renovations often became apparent only after operating the property for some time. We encountered this even in properties that were advertised as "fully renovated" but were not completed to a high-quality standard.
To overcome this challenge, I shifted my real estate investment approach to acquiring properties in poor condition and managing full-scale renovations before placing them into rental operations. This proactive strategy ensured that the properties were updated to high standards, reducing maintenance issues, lowering tenant turnover costs, and attracting quality residents. My advice to other property owners is to thoroughly assess renovation quality before purchasing, rather than relying solely on inspections or prior renovation claims. If necessary, secure financing and work with a trusted general contractor or property manager to oversee a comprehensive renovation early on. Investing in quality upfront can save significant costs and headaches in the long run, ultimately leading to more stable and profitable property ownership.
Account for Permit Delays
One unexpected challenge I've faced as a real estate property owner in Detroit is dealing with prolonged city permit delays for renovations. Detroit has a lot of older homes that often require significant updates, and navigating the permit process can slow down projects, delaying both flips and rental income. To overcome this, I built strong relationships with local contractors who understand the city's regulations and can help expedite the process. I also started proactively researching permit requirements before purchasing a property to anticipate potential roadblocks. My advice to other investors is to factor in extra time and costs for permits when budgeting a project and to work with experienced professionals who know how to navigate Detroit's specific requirements. Staying patient and proactive can save a lot of frustration and keep your investments moving forward.
Maintain Clear Lease Terms
One unexpected challenge I faced as a real estate property owner was dealing with a non-paying tenant who refused to communicate or vacate the property. While I had screened tenants carefully, unexpected financial hardships on their end led to missed payments and eventual eviction proceedings.
To overcome this, I relied on clear lease terms, documented communication, and a legal eviction process while also exploring options like cash-for-keys to encourage a smooth transition. Maintaining professionalism and following local landlord-tenant laws was key to resolving the issue efficiently.
My advice to other property owners is to have a clear screening process, set up strong lease agreements, and stay proactive with tenant communication. Also, keeping a financial buffer helps absorb unexpected losses while working through legal or negotiation processes.
View Property Obstacles as Opportunities
A surprising challenge we've encountered in our Sunnyvale showroom property was managing flooring transitions between different commercial spaces. When expanding our showroom, we discovered that previous tenants had installed multiple flooring types at varying heights. We solved this by implementing a comprehensive leveling system and creating elegant transition zones that now serve as educational displays for our customers. This challenge taught us to view property obstacles as opportunities to showcase solutions, turning our showroom into both a retail space and a learning environment.
Identify Predatory Tenants
Hi, never in my 62 years have I thought there were such people in our society that would have such dark hearts that they prey on the kindness and naivety of unsuspecting landlords and property owners.
The primary and most unexpected dark challenge I have faced as a real estate property owner—the predatory tenant!
I have been a property owner for 20 years. I now realize that it isn't an 'if', it is a 'when' you are going to be visited by a tenant that is predatory, will play on the good nature and weaknesses of the unsuspecting property owner. Producing manufactured documents, lies, grifts, and subversive tactics to gain possession and then hunker down and make the landlord's life miserable.
To add insult to injury: On a dystopian turn of events, the city and state governments have declared war on landlords.
Please see AB 1482: https://oag.ca.gov/system/files/media/Tenant-Protection-Act-Landlords-and-Property-Managers-English.pdf
City of Los Angeles: LAMC Section 165.03, Just Cause Evictions: https://codelibrary.amlegal.com/codes/los_angeles/latest/lamc/0-0-0-361875
The LAMC Section 165.03 is what I got caught by in my 10-month wading through the muck of an overworked and broken eviction court system, only to have all my efforts wasted.
How I overcame this challenge!
Not to take this lying down, I enrolled in law school and learned property law, landlord/tenant law, and others to become the most dangerous person out there to these grifting, predatory, con artists that would do harm and bankrupt unsuspecting landlords. As an example, please see Elizabeth Hirshhorn's 470-day vacation in a penthouse suite in Brentwood, California: https://youtu.be/ErrgpasR0Ks?si=1lwTm9weSeH-FPVh
Shame on her!
What advice would you offer to others?
I founded Squatter Lockout Group to use procedural and substantive law to save landlords from financial ruin.
My landlord brothers and sisters. 1. there are ways to identify this scourge before you let them into your property. I have a repository of free information where you can educate yourself: https://www.youtube.com/@SquatterLockout
If you get in trouble, we can help. We are the alternative.
Please help us get the word out that there is an alternative compared to the Superior Courts of California. Please see: https://squatter-lockout.com
Please share how I can help with your article and always a resource for all things real estate.
Very truly yours,
Tevis Verrett
747-259-8109
Inspect for Hidden Water Leaks
Ah, the life of a property owner is never dull, especially when unexpected challenges pop up. One such surprise for me was dealing with significant property damage caused by hidden water leaks. These leaks were sly; they were tucked away, slowly causing havoc by the time I noticed damp patches and a musty smell. To fix this, I had to undertake extensive repairs, which were both costly and time-consuming.
Navigating through this was a learning curve. First and foremost, regularly inspecting your property can save you a heap of trouble. Don’t just look over things superficially. It’s worth it to check those out-of-sight areas and invest in periodic professional inspections. If you ever find yourself in a similar pinch, acting swiftly can prevent more severe damage, ultimately saving money and stress. Remember, a stitch in time saves nine—keeping on top of maintenance can help you avoid these unwelcome surprises.
Adapt to Regulatory Changes
Hello, and thank you for the opportunity to discuss these insights. I'm Chad Phillis, founder and CEO of Checkmate Rentals, where I've built a reputation for transforming short-term rental operations through tailored, data-driven strategies and innovative market responses.
What is one unexpected challenge you've faced as a real estate property owner? How did you overcome this challenge and what advice would you offer to others?
One unexpected challenge I encountered was a sudden regulatory change in one of our key markets that threatened to disrupt our established dynamic pricing models and occupancy rates. I addressed this by quickly forming a task force to analyze the new regulations, consulting with local experts, and pivoting our strategy to focus on compliance while still maximizing revenue—a move that not only mitigated the immediate risk but also revealed new opportunities for operational efficiency. For example, when an unforeseen ordinance was introduced, we implemented a real-time monitoring system for local policy changes, which allowed us to adjust our pricing and marketing strategies almost instantaneously;
Best regards,
Chad Phillis
Founder and CEO, Checkmate Rentals
[checkmaterentals.com](https://checkmaterentals.com)
