Is your real estate investment still serving its purpose?

It’s easy to say, “Real estate is just business,” but let’s be honest—there’s often more emotion involved than we’d like to admit.

Take a recent case we had: a long-time investor owned a rental property that was generating solid returns.

The only problem was he hadn’t raised the rent in years because he’d grown close to his tenants. He even referred to them as “family.”

Now, the property’s income had fallen well below market value, and he was hesitant to make changes that might upset the balance.

This is what we call the Emotional Trap.

We’ve seen it before: an owner-managed property where friendships develop, making it hard to make tough decisions.

It’s perfectly natural to feel attached to properties and people, but emotions shouldn’t drive your investment strategy. If your decisions are influenced by guilt, fear, or a sense of loyalty, your investments might not be working as effectively as they could.

It’s possible to be a great landlord and treat people fairly while still making sound business decisions.

If this is hard for you, you might try what one of our clients did: He created a fictional “tough guy” business partner to handle rent issues, so he could play the role of the nice guy!

If you feel emotions may be getting involved in your investment decisions, here’s a simple exercise to detach and regain clarity:
Ask yourself, “Would I keep this property if it were a new acquisition today?”
Run the numbers as if you were advising a friend. Would you recommend holding this property or making a change?
Think about your end goals. Is this property helping you reach them, or is it simply giving you “psychic income”—a feel-good reward that’s holding you back?

Emotion can be a powerful force in real estate, but it shouldn’t determine your investment decisions.

If you’re struggling to detach and see your properties objectively, it can be helpful to get the input of an expert third party. I’d be happy to help you evaluate your situation with a clear, numbers-first perspective.

Until next week,

Wally Smith

P.S. If you’re ready for more in-depth guidance, there are two ways I can help you.

1. Schedule a personal consultation

If you’d like a personalized consultation, we offer 45-minute consultations for free (no strings attached, ever).

You can schedule a 45-minute consultation call here.

2. Check out my weekly Impact 1031 Podcast: The 1031 Show

Click here to see past episodes.

If you have a specific question you’d like answered on the show, you can submit your question here.