After asking my last tenant to leave due to numerous complaints from the neighbors, I finally listed the place for lease on Craigslist and stuck a for rent sign in the yard.
It took me a week to do those two things, which is an inexcusable delay. After all, time is money in the real estate business, and the difference between renting it this week (May) and next week (June) could be an entire month's rent - one twelfth of my annual income on the place!
I knew this. But my sister was moving in during the week, work was crazy because my boss was unexpectedly out, and I was plum tired and didn't care that much. That's right, I wasn't entirely motivated to get out there and get the thing re-leased. In fact, it took me a week just to drive over and check out the condition he left the place in! Luckily there wasn't rotting food in the fridge or anything, or I really would've paid for my laziness/apathy/avoidance.
I love being a landlord when it comes to collecting rent checks and calculating tax breaks and analyzing my cash flow spreadsheets and even shmoozing tenants/potential tenants. I love the feeling of pride and progress and ambition it brings me to be a bona fide real estate investor.
But when it comes to cleaning and maintenance and taking complaints - I not only hate it, I pretty much avoid it. Which is, of course, expensive. Not only does delaying confrontation of issues often enable them to snowball into bigger, more expensive ones, but even when I do deal with them head on I am significantly more likely to throw money at them than try to find the most cost effective solution.
Why? Because the most cost effective solution often involves me getting my hands dirty - or missing a fun social engagement I've been looking forward to - or having to struggle to learn something new that I don't care about knowing (like how to install carpet). Guess what's easier and far more preferable? Paying somebody else to do it.
For example, whenever I get a call about a leak or a clog I simply call my regular plumber and pay whatever he quotes over the phone to fix whatever the tenant claims is wrong. I don't drive over to investigate, I don't ask questions, I just pay somebody else to take care of it. I've spent well over $1000 on plumbing issues during the last year at that place.
Sure, I could have taught myself some basic plumbing skills and learned how to fix leaks and unclog drains and dropped what I was doing to go address those issues myself each of the 5 or so times they have arisen. I'd have over $1000 more in the bank, and I'd be more self sufficient.
But I also would have had to see, talk to, and interact with my tenants 5 more times. I would have spent God knows how many (miserable) hours with my hands down a drain in close proximity to other people's hair and bacteria. I would have had to dedicate time and energy to research how to do that stuff when I could have been studying for the CFP or doing my job a little better or sleeping.
I admit it. I'm a fair weather landlord.
May 26, 2009
The Fair Weather Landlord
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6 comments:
Kiyosaki etc. all go on about how great and easy it is to be a landlord, but most of what I read from on blogs is how much people hate it. A lot get out of it after a short while - e.g. Trish Allen...
Hi,
I noticed you said you listed the property for sale on Craigslist. Does that mean you are going to sell this particular property? I am also a small time landlord and I find that mid range properties tend to have a bit less drama than the low income ones. Just something to think about.
@ mOOm - I certainly don't hate it (yet), but I am not one to deal with anything I hate for very long. If it gets unbearable I'll either hire a property manager or sell out and move on.
@ tropicsaver - good catch; I meant to say I listed it for rent. I have another property that is brand new and larger, and it gives me very little drama. The rent checks come in with little effort, and I'm rarely called. It's great! So I agree that a newer, nicer property is worth it if you can afford it.
Many of these issues can be addressed by selecting appropriate tenants. Be a hard-a**, no nonsense, my-way-or-the-highway landlord up front when you're screening potential tenants and be choosy about who you select. The newer property is probably not less of a headache because it's newer, but because the tenants are better tenants. (Nothing is absolute, of course.)
Also, it's better to hire a maid service to do a makeready than lose a month's rent. So don't hesitate to use professional services when they make sense.
Another thing you may want to evaluate is hiring a property manager. Yes, they'll typically charge anywhere from 5 to 15% of total income, but they'll do all the "hard" work if they're good which may make the difference in that extra months rent (and your sanity).
Being a landlord is definitely WORK. I am glad I purchased a rental, but I can't imagine owning more than 1 and working 40+ hours a week ( which I do ). My dad owns 8 and I admire him for his efforts.
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