Our Top Tips for Setting Realistic Expectations for Your Investments

Many investors get upset when they buy their first property and realize the expenses that are bound to come up in the maintenance of a home and how that can eat into cash flow. In this episode we cover how to calibrate expectations about your returns, setting aside sufficient reserves and what you can do to glean the most out of an inspection report. --- Transcript   Emil: Hey everyone. Welcome back for a weekend wisdom episode of The Remote Real Estate Investor. My name is Emil Shour and my co host today are   Tom: Tom Schneider   Michael: And Michael album.   Emil: And today's topic we're going to be getting into is setting the right expectations for owning remote real estate. So we've talked about expectations and cashflow, specifically for the financials and cash flow side. But now we want to talk about a little bit more about the ownership side of things and things you should expect as an owner, especially in the beginning. Alright, let's get into this one.   Alright, guys, so this is um, we were just chatting about before we hit record, and I think it it hits a nerve with all of us. And it's something you will particularly see with people who I think our new a new to real estate investing and be just haven't had the right exposure to the education or the expectations that can come with rental properties.   Michael: That was great alliteration. I mean, expectations and education. Love it.   Emil: Thank you. I try. I try hope it's it's stickier with alliteration, you know. So this is stuff we hear about through our community channels, maybe somebody just purchased a property of they or they've owned it for a couple months, and an issue comes up. And it's often met with expectations of Oh, I you know,   Michael: I didn't expect it to be this much, or I didn't expect it to happen to me, or I didn't know that this was an issue that even could arise.   Emil: Yeah, exactly.   Michael: You know, we were talking about before we hit record here, me Oh, you brought up such a good point. It's like, Yeah, but it's a house. Like if you've ever lived in a house or lived anywhere, there have been issues, if you live there long enough issues with the water heater issues with the pain issues with the mechanicals of the property. So just because you're now an owner, as opposed to a renter or a tenant or even an owner in your own primary. These things happen, their mechanical systems, just like you take your car to the maintenance shop to get fixed and worked on. Same thing happens with any piece of rental, that's how the world works,   Emil: Right. Especially when you only been renting and you know, you call up management company or the owner and they come and fix things. You don't see the bills, you're not really exposed to the costs for these things. You just, you know, you just call it in when something breaks. So that could be one thing. I think it's especially hard when you just buy a property and something happens, right? It's your first property and something breaks, and you get hit with a $500 bill or a $1,000 bill and you're like, oh man, there goes my cash flow for the first couple months. And maybe you you kind of just like think, well, is this gonna happen forever? Do I have really bad luck? Did I buy a lemon, whatever it is, but I think the message we want to tell people is that's common. It's this is this is part of owning real estate, there's going to be expenses, we call it a lumpy business, you'll have times where nothing happens. And then other times where it seems like everything is happening all at once.   Michael: The sky is falling!   Emil: Yeah, yeah. So I mean, has that been your experience as well, guys?   Tom: Yeah. And I'd say, you know, a term that I've used a couple times is peanut butter spread, like the risk and to unpacked that peanut butter spread the risk is like over enough volume. And over enough period of time and volume of units, things tend to average out but it's not unreasonable. It can