The Investment Scientist

The Agony of The Landlord

Posted on: September 5, 2013

images-11A physician client of mine called me the other day and asked my advice as to whether she should evict the tenant currently residing in her condo. This is advice I hate to give. Let me explain.

The tenant is a single mom with two young children, whose estranged husband just stopped paying child support because he is officially unemployed, but the tenant believes he is getting paid under the table.

My heart goes out to this tenant, I would never want her and her children to become homeless. But my head tells me that if my client lets her stay for free, she would most likely wind up staying for free forever and my client’s rental property would become a toxic asset.

So what should I advise my client?

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Aside from that specific question, there is a lesson to be learned here. Owning rental properties is not for the faint of heart. I know a lot of physicians who like having a few properties here and there but few ever turn out well for them.

What they often overlook is that rental properties can cost time, money and peace of mind. Take my client for example; whatever she decides to do, she is going to lose her peace of mind.

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Author

Michael Zhuang is principal of MZ Capital, a fee-only independent advisory firm based in Washington, DC.

Twitter: @mzhuang

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