Are You Ready to be a Landlord?

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After the most recent email from our tenant I started questioning my choice of being a landlord.  The email went something like “it seems that there might be mold in the HVAC unit and it smells a little bit in here and I feel like I might have some allergic reactions and I don’t think I can stay here till this is fixed”.  Visions of people in hazmat suits and masks decontaminating the condo immediately appeared in my head.  A story that I heard awhile back about a mold incident in my co-worker’s rental townhome costing somewhere around $10,000 to fix was instantly remembered.  HVAC system replacement to the tune of $4,000 was added on top of that.  But lets back up…

I bought a nice 2 bedroom 2 bathroom condo over 10 years ago to live with my then girlfriend.  It was a nice place built in the mid-80’s in a complex with a swimming pool, tennis courts and located next to a park.  We lived there for almost 3 years before deciding to try the life in a single family house like so many other couples we knew were doing at the time.  Instead of selling the condo we decided to try renting it out to see if this is something we can manage.  The house that we bought was around the corner so it seemed easy to address anything that went wrong at the condo myself after work or on the weekend.  We considered hiring a management company, but as I’ve mentioned before we default to insourcing as much as we can, so we decided to do it all ourselves.

After putting a contract on our new house, I posted an ad on Craigslist advertising the condo for rent and soon had the Lease Agreement signed with our first tenant.  I was careful to select a seemingly good candidate that passed the credit and background checks.

It has been an interesting ride over the past eight years that we have been renting out the condo.  I wanted to share a few examples of what I had to deal with so that anyone considering doing the same can see if it might be for them or if they would rather not be bothered with stuff like this.

  • Tenants signing a one year lease and then trying to get out of it early for various reasons such as job loss, relocation, marriage.  Even if you get to keep the one month deposit it’s still a lot of trouble to find a new renter and get the unit move-in ready.  If they stay a full year but leave after the lease ends you are still in the same situation running around trying to minimize vacancy.

  • High turnover examples.  First tenant left after 7 months, second left after 1.5 years, third after 6 months, fourth moved out after 10 months but paid for 12, fifth is still there after almost 5 years.

  • One tenant STOLE our Tivo!  Allegedly, of course.  This was our first tenant and my girlfriend and I were about to get married.  One of our friends bought us a Tivo as a wedding present and sent it to the condo instead of the house and we didn’t know anything about it.  A few months after the wedding our friend asked us if we were enjoying the Tivo and we obviously had no idea what he was talking about.  He tracked the order with the UPS and they pulled up a receipt with our tenant’s signature on it.  After we politely asked if she had our box by chance, the tenant told us that her sister, who was visiting at the time, must have signed for it and taken it.  Long story short, we never recovered the Tivo from the tenant but did get it in the end because our friend somehow got a free replacement from Target since we never signed for the package.

  • That same tenant just disappeared after 7 months packing up and leaving without notifying me in any way.  Not only that, but a few months after the tenant left, my wife and I were walking by the condo and heard some loud banging on the door.  It sounded like it was coming from around our unit so I went to investigate.  I found two guys who were looking for the tenant that no longer lived there.  I explained the situation and asked what’s it all about.  Turns out that this lady rented a bunch of furniture and electronics from a Rent-A-Center and disappeared on them as well.  I gave them my info but never heard from them again.

  • There was a tenant that accused me of renting him a place full of bed bugs.  I never found anything even remotely resembling a bed bug but had the apartment fumigated just in case.  Tenant before and after him never complained about bed bugs either.

  • There was a tenant that would literally call me when one of the bulbs went out.  He later told me that when he was growing up he had a servant do things like that so he never learned how to do it himself.

Quite an entertaining list, isn’t it?

Lets go back to the latest email from my current tenant about mold.  I ended up doing much more than mold remediation as I noticed stuff to be fixed while I was on premises.  Over the 3 nights and 1 day that I was at the condo I did the following:

  • Cleaned the HVAC unit inside the condo, especially the coil and the drip tray.

  • Found a draining issue in the drip tray plumbing and fixed that.

  • Fogged the HVAC, ducts and each room/bath with Concrobium.  I will have a separate article on using Concrobium for DIY mold remediation soon as it’s pretty neat and relatively new.

  • Wiped down all walls, mirrors and floors to get rid of the residue left by fogging.

  • Bought a dehumidifier and had it running in different rooms for 4 days.

  • Snaked the floor drain in the laundry room.

  • Fixed the shelves that fell off the wall in the storage unit.

  • Wiped down a ceiling in one of the bedrooms that had a lot of dust and cobwebs.  Took off ceiling vents and washed that too.

  • Patched a hole in the bedroom wall, sanded, painted and vacuumed.

  • Painted scuff marks on the walls in the bedroom.

  • Found a bulb in the ceiling fan that was broken off at the base.  Extracted and replaced.

  • Installed new door stops to replace broken ones.

  • Noticed that most kitchen cabinets had doors that were hard to open.  Turns out that the bumper stops melted over the years and now were acting as crazy glue.  Scraped the gooey mess of all doors, cleaned up with Goof Off and installed new rubber bumpers.

  • Fixed a few knobs in the kitchen and tightened all the screws in all the hinges.

  • Tightened both of the fans in the bedrooms.

  • Fixed the door strips where the nails were coming out.

  • Bought new filters for the HVAC unit.

  • Bought and installed a new wireless doorbell.

There you have it – a glimpse into the life of a DIY landlord.  I think the list above is pretty typical of the stuff that you would end up doing at some point at the condo.  Actually, condo rentals are easier since there is no outside maintenance, which is a huge plus for me.  An upcoming project that I am dreading is the HVAC replacement, which I know is going to happen sooner rather than later.  Throw in the water heater and the appliances from the 80s and it gets expensive quick!

While not passive, renting the condo out has been adding to our net worth from year one and is continuing to be a great investment.  I don’t mind spending a few full days at the condo each year doing the type of work I described so it’s a good fit for me.  However, if we had to outsource all the work that goes into finding tenants and keeping the condo in good shape I would much rather sell it and invest in REIT’s instead.  Sweat equity is what makes this work for us!

I also secretly love knowing that if all hell breaks loose we can always sell the house and live in that condo for next to nothing.

 

2 thoughts on “Are You Ready to be a Landlord?

  1. Pingback: DIY Mold Remediation and Concrobium Review | Insourcelife

  2. Pingback: Psycho Tenants, Leaking Toilets and DIY | Insourcelife

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