It doesn’t surprise me you did this for that family

A little over 20 years ago my husband and I were renting a townhouse in Lexington, KY. We had a 2 year old and a brand new baby who had been hospitalized with viral meningitis at 5 weeks of age. My husband lost his job when the baby was maybe 8 weeks old. We had always paid our rent in advance, and had painted and done upgrades on our own. We were excellent tenants. Immediately after my husband lost his job, we called our landlord and told her what was going on, and let her know that we probably wouldn’t be able to stay much longer (we had a month to month agreement) without his income and because of the extensive medical bills we had incurred with our newborn. She asked us what we could afford to pay because she wanted to keep us as tenants. We came to an agreement. A few months later, my husband still hadn’t found a job. She then contacted us and asked us if it would make things easier for us if she lowered the rent even more. To this day, I won’t forget that woman’s kindness towards us during a very difficult period of our lives.

My husband and I have 3

They are all paid for. It can be pricy to fix things and a shock to your system if you are dependent on the rent for living if they become vacant. After 20 years of doing this, we have finally learned how to manage tenants. We don’t allow pets or smoking. We have small houses(only 1 bedroom and 1 bath) so we don’t rent to people with children. With the smallest 2 houses (less than 1000 square feet), we won’t rent to couples. We also try not to rent to people we know. It is easier if we have to kick them out. I am very straight forward with them. If they don’t pay the rent, they have 30 days to leave. I am sorry for what ever they are going through, but this is a business not a ministry. We have bills to pay too.

We also have one that is an hour away and my son lives in that one. It is not paid for, but he pays the mortgage. I’m not sure that I would do that again, because his dogs have torn a lot of things up. I think pets tear up more stuff than people.

Yes that too

I do have a reputation that I am kind of proud of. It is pretty well know that I can be extremely fair. If I say I am going to do something I do it…. Good or bad. If we discuss your financial difficulties I can work with you. If you like to stick me like you do your other creditors, they know me by name in dispossessory office of the local county courthouses. I had one tenant stay with me for almost a year because he communicated with me a few years back. He lost his job and he told me that he wouldn’t have it all, it was just his wife working and they had 3children. Then she lost her job and with unemployment it was difficult to make rent. Then it became virtually impossible, but all the way, he was telling me what was up. Having previously lived in the house, I knew the cost of utilities…so he wasn’t exaggerating his costs, and expenses and every month we talked. I didn’t put his family out, but then I didn’t have any costs except insurance and taxes on the property so I could afford to let them stay. When they finally both obtained jobs, they are still there, and every so often I get a double rent payment which I have never even asked for.

During the same time period I put several other tenants out of other properties because they didn’t communicate with me.

I don’t think I could be a long distance landlord

but maybe I just have the personality to be a landlord… I haven’t found it difficult. I make repairs, I visit my properties and I encourage my tenants to take pride in ownership by encouraging them for example, to call me if they need the carpet cleaned. I have since started carpet cleaning at every lease renewal. Same thing with lawns, its better for me to hire a lawn company, then I know it’s done, neat and orderly, and it has inspired at least two tenants to plant their own flower beds.

I’m too nice

Changed the locks and touched up the paint and listed it again. I found the PERFECT couple to rent it. Then my dad started losing his house, so I told him to sell it and move into my rental. I was so sad about not renewing their lease, but gave them 2 months notice (instead of the 30-day required) and they found another place and didn’t want to pay for the last month of their lease. So I kind of got mad about that, since I was trying to be nice and give them plenty of time to get out. So again, we sat down and talked and split it. My dad moved in early and paid the remainder of the month, so that worked out ok for me after all.

The “perfect tentants” were planning on renting for the long haul. So they “made it their home” by painting all of the walls. Some pretty bizarre, and some not so bizarre! There was a big, black tree painted in the MBR and the kitchen cabinets were black and the kitchen walls were yellow and red trim (looked like a fast food joint) and the (already small) bathroom was blood red and black!! So during the final walk-thru, I was silent. My husband later said he couldn’t believe that I kept my mouth shut!! It was only because I didn’t have words in my vocabulary for that!!

Talked to Dad to determine what he could live with and what he couldn’t. I found a shower curtain with a playing card on it that kind of made the bathroom look less like a dungeon (who knows, it might have been theirs? Found it at Goodwill for $1!) and he enjoyed it. He did like the living room color but that was it. He and I agreed if I bought the paint, he would roll it on. I took the actual cost of paint (sent them a copy of the receipt) out of the deposit. He painted the kitchen blue and covered the tree in the bedroom and did some other “subtle” cover-ups before he moved in.

He is doing well in the house. He has set up auto pay for the rent and since he’s my dad… it’s pretty safe bet that he’s going to take care of the house. All that having been said: we have decided to sell it whenever it is available to sell again. I’m not sure how people make money on rent. Granted, I still have a payment, and I don’t charge enough. But even if I paid $68k cash for the house and renovations, and charged $680/month (which I’d never be able to get in this town), it would be over 8 years before I saw a profit, even if I never had to put another penny into it and it never sat empty. Not to mention taxes and insurance, which keep going up (and landlord insurance is higher than homeowner insurance).

My house isn’t paid for but here’s my story:

I bought the thing in 2007 for $38k and did about $30k worth of repairs to it. I remarried and moved to the country in 2010 and tried to sell it, and didn’t get a decent offer on it. We left it on the market for 6 months. Our realtor was a “let’s set the price high and drop it if we have to!” so every 4-6 weeks, she wanted to drop the price because “You only owe $30k on it”! So now, if you see the house on Trulia or Zwillow or any of those sites, it shows “Price lowered 20%”, 3 or 4 times, which looks bad, IMHO.
We finally decided to try to rent it for a while and hope that the market recovered. I rented it for the same price as a 2-bedroom apartment, hoping to be able to pick good tenants. My attitude was that I wasn’t as concerned about getting rent as I was about someone taking care of my house.
The first family that rented it really made me re-think that attitude. They were a young couple with 2 toddlers and just awful awful awful credit. But they were in love with the house and I charged them a giant security deposit and they moved in. They even paid the giant security deposit AND an extra month’s rent because I gave them a little discount to pay early.
That was the only time I didn’t have to badger them and chase them down for rent. I had to give them eviction papers twice and finally after they’d lived there 7-8 months (yes, 2 months were paid up and 2 months were so late I was ready to kick them out! The other 3-4 months were just as bad!) I sat down with them and had a talk with them. Flat out said you can’t afford this house, and you lied about that. They did take care of the house, I’ll give them credit for that. They knew they were in over their heads and we decided to end the lease early, and I gave them their deposit back.

It’s funny that we’re thinking this way

We had a house in Ohio we were trying to sell for four or five years. Every realtor in town had someone they wanted us to rent it to, but brought us very few concrete purchase offers (of course, the best one was the first one that came immediately after we listed the house and we stupidly turned it down. Lesson learned there). The last thing in the world I wanted to be was a landlord, and certainly not a long distance landlord. Two years ago we finally sold that place. We probably could have made a decent income had we decided to rent it, but quite honestly, I was at a different phase of my life, and all I wanted to do was to cut ties and move on. I certainly wasn’t looking for any more responsibilities in my life either. I’m now looking at the advantages of possibly doing this, but it won’t be for a few years, and if we do it, it would be in an area near us so we could still keep an eye on things. I don’t want to give the responsiblity to someone else when we can do for ourselves.

The long distance stuff was definitely a problem

That’s the first thing I’d do differently. But the other issues – the turnaround time between reported issues and needing to repair them, spending money to draw up papers that didn’t do anything to help us later, the property manager that tried to steal it right out from under us, and the delays between knowing we had a problem and being able to act on it – those are all issues where our proximity would not have made a difference.

I know a lot of folks make a very nice return on rental properties. This was definitely not an average experience. I guess I’d prefer to do my investing in ways where we aren’t so exposed to things going so sour. Knowing that the tenant met the realtor at the door with a shotgun? I can go a long, LONG time before I ever want to be associated with that sort of thing again.

Definitely what our game plan is

Pay cash for everything and have a comfortable savings safety net as well. I wouldn’t do it unless we knew we did everything with cash reserves as well. I wouldn’t want to find us in a desperate situation to find a tenant. I also like the idea not to buy property in an area we would not choose to live in ourselves. That is a very good point, Betsy. This would be the final step to what I think is our laddering of building passive income in our quest for financial independence.

My experience with being a landlord was unfortunately not very encouraging

My first house had a legal apartment upstairs, and it was already rented when we bought it (my ex-DH and I). That arrangement was Ok for awhile, and the tenant’s rent certainly helped us make the mortgage. When I got divorced, I kept the house and that tenant made it possible for me to stay in the house. BUT, I felt compelled to make every repair, as quickly as she reported it. If she had a plumbing leak at 3am, I was up at 4am to let the plumber into the house at overnight rates to fix that leak. If it snowed 1/2 ” overnight, I was out shoveling before she got up to go to work at 6am, so that she didn’t slip and fall and sue me. Maybe that was overly protective of me, but I couldn’t rest easy until I knew that she didn’t have any possible complaints about the way the house was maintained.

When I moved out here to WA state, I still owned the house in Billings, and I wanted to keep it awhile so that I could build up some equity. With my parents’ counsel (they’re both realtors and had been in real estate for years), we hired an attorney and drew up papers to rent the house to a local property manager whom I had met while I was in the mortgage industry. He was responsible for renting the property (both the upstairs and the main level), maintaining it, and sending the payments to the mortgage company. His “take” was to rent the house for more than the mortgage payment.

For awhile that arrangement worked out OK. But then I started getting letters from the mortgage company that the payment was late. It was written into our contract that the property manager would pay for any late fees, so that by itself didn’t concern me. But it kept happening more and more frequently. I’d call the property manager and he’d tell me that the tenants were “just a little behind”, but they were good folks working hard to make ends meet, he’d take care of it, blah blah blah. He also told me they were “fixing up” the house because they ultimately wanted to buy it, so he really wanted them to stay there instead of finding other tenants. I believed him.

Then some friends drove by the place, and called me to say that the place looked like a wreck, the tenants had trashed the yard, they had a busted-up wreck of a car in the drive, etc etc etc. And then I got a call from the mortgage company that the mortgage had gone late again. And then, because I hadn’t gotten enough good news, I got a call from an escrow company in Billings asking me to verify that I had sold the house to this property manager because the proper papers hadn’t been filed. If I was intending to sell the house, I’d have to fly back to Billings and sign the papers in front of a notary. It took me a minute to digest what I was being told – the property manager had filed papers that he OWNED the house, that I had sold it to him when I hired him to manage it, and thus it was his right to sell it to the tenants.

From that point forward is something of a blur. I called the sheriff to please go check the house. I called the mortgage company to find out what the payment history had been. I called my friends who still lived there to please drive by on a regular basis and keep me updated. I called a realtor to see what my options were for listing the house for sale. I called the attorney to see what my options were for firing the property manager and evict the tenants. The property manager denied any wrongdoing, and claimed there was nothing wrong with him trying to sell the house “on my behalf.” The friends reported that the curb condition of the house was degenerating by the day. The sheriff called me back to report that the tenants seemed to have a lot of trash on the property, but they weren’t quite breaking code yet. The realtor said that they went to the house and the tenants met them at the door with a shotgun. The attorney said my options were limited, but he’d do what he could.

We had to wait until the property actually went into 6 months’ late before we could act. During that wait, the property manager evaporated. The tenants continued with their destruction. The sheriff and friends continued their driveby’s but couldn’t act. The realtor went ahead and did all the background work so that they could list the house as soon as we got possession. And the attorney started having health issues, and suddenly his staff wouldn’t return my calls. He never actually clarified for us what we could or couldn’t do.

We finally hit the date at which time the mortgage was 6 months unpaid, and the eviction notice was posted. The tenants tore it down. The sheriff and the realtor worked together to evict the tenants without further damage to the house, but a lot of damage had already been done. At five minutes after the eviction date/time, the sheriff rolled in with enough backup to escort the tenants out in a show of force that must have really impressed the neighbors. The realtors went in and took over. They inherited a wreck of a house and did some amazing work to get it ready for market, then they marketed it aggressively and sold it within 30 days of listing.

From the time I bought the house until the time I sold it, was approximately 5 years. It was leased during the last 2 years of that period. During that time of ownership, I amassed roughly $15,000 in equity. But the tenants did $14,500 in damage. After the dust settled, after all that effort, and during a period of time when the market there was fairly strong, my grand total return on that house was a check in the mail for $500.

My experience is not typical, but it shows what can happen when this stuff goes sideways. If I were to do it again, and I actually have considered doing it again, I would do a lot of things differently. I would rent a house that I could check, conveniently, in person, with a casual drive-by. I would do the property management myself. I would line up contractors myself, with excellent referrals, and have them on speed-dial. I would lay out to the tenants the work and repairs I would do, and within what timeframe, which wouldn’t be “immediately”. I would screen the tenants very aggressively, and let them know that if they violated rent I had no problems evicting them five minutes after breaking the rent. I would hook up with whatever landlord advocacy group existed in the area, and find an attorney who would back me up. And I would think really really hard about whether I wanted to get into this whole gig again.

Here in Massachusetts a great many properties are double or triple deckers

We were very tempted to buy one, but I knew we could not handle doing the maintenance. There are so many ways a rental property can bite you. The tenants can not pay the rent. The property can be empty for a few months. You can have unexpected repairs. The tenants can trash the place. And you can’t put off repairs to a rental the way you can choose to do with your own house. I lived with an un-usable second bathroom for quite a few years, for example, while I saved up cash, but it would have been really hard to rent an apartment that way. And I’ve seen tenants ignore leaks and otherwise mess up a place.

A friend of mine owned an apartment in a bad neighborhood (rule of thumb: NEVER buy a building you wouldn’t want to live in yourself) and he ended up with a tenant who was a drug dealer. She had a small child and he was not able to evict her immediately even after she stopped paying rent. He had to pay his lawyer while hers was covered by some low-income program. The crowning insult came when the police came to the apartment and broke the door down. My friend had to pay for the repairs and he *still* couldn’t evict her .It took him forever to get out of that building (a less ethical person probably would have had it burned)

Of course, most tenants aren’t like that, and in a duplex at least you live right there and can tell what’s going on, but you never know. It just introduces a lot of risk and unpredictability into your life. I don’t think I’d want to go investing cash in real estate until I had a really sizable cushion to play with.

I am looking more

like if we bought one doing it in another 10 years. It would be save the cash first while still investing in mutual funds. Then, buy it. We could just put more in mutual funds instead.

This is why I’m excited about the rental aspect

My husband can indeed do the work. He just needs the motivation. lol Guys like Mr. Money Mustache and Lacks Ambition are doing all their work themselves, and I know that’s a huge advantage in staying ahead of the game and keeping a lot of the money in your own pocket rather than farming it out to someone else. If my husband wasn’t Mr. Super Genius at this sort of thing, I don’t think I would even be considering this as an option for us, but I see now, and even Dave extols this, how it can be a huge financial boost to us, but….we have to buy the rental with cash, and it’s got to be a deal. Like, a helluva deal to even be a consideration.

I don’t think I have the time for it

My youngest is 2 yrs old and my oldest 13. My hubby just can’t do things like dishes and has to limit even his cooking. He has a hard time standing long. It leaves me going from sun up to sun down. I also homeschool my younger kids. I do have a reliable guy I hire to work on our house. He is very reasonable and I have known him forever. He is who built my swing set. I think hubby could manage the renters. It’s the maintenance that red flags me. With rental properties you do get a pretty solid passive income though even if it’s not huge.

I know, and thank you

but I don’t think I can learn how to use all the right saw thingies in just one afternoon. I live in a crooked little cabin. I believe the trim sizes vary vastly in width since the house is crooked and that’s why my husband isn’t totally motivated in finishing the trim work.

Jacob from Early Retirement Extreme has the same mindset as Mr. Money Mustache

I’m fired up reading these guys blogs. The thing is, they are flipping brilliant (like mega i.q. type of brilliant) guys. They’ve figured out how to live large on less very early on. I need to order Jacob’s book from the library after I plow through the library books I have on my bedside table. I’m not down with how he and his wife separate their finances, but I like the way his brain works in a lot of other areas.

I wouldn’t do it

It cuts into your profit margin is you have to pay someone else. I know a lot of people pay property management companies to maintain and oversee the rentals, but that costs money. Also the best deals out there right now are for cheapo houses that have to be overhauled. If you can do it yourself, you’re keeping all those labor costs to nil. I don’t know, Keisha. Maybe you need to take a home improvement course yourself at the local community college and learn this stuff yourself. I’m actually thinking of taking a carpentery course myself. I’m sick of nagging my husband to finish with the trim in our house. Might as well figure out how to do it myself. How hard can it really be? I just need the knowledge. We have the tools.

See my hubby can’t which is why I think it’s a bad idea.

He is disabled. He has severe back and neck issues. They cause hand tremors. He worked as long as he could. We thought he would work till we paid the house off. It got worse faster than we thought so his work fired him from it. The house payoff took way longer than we thought. I know how to find great cheap properties. I just don’t know if maintenance and no pays would kill the plan.

Can you do the repairs yourself?

I know my DH can. You also want to buy a steal, but that’s what DR always talks about. One of the blogs I’m reading, the guy always advertises on Craigslist and rents for less than the going rate in his neighborhoods (I think his number is for 90% of the going rate but I have to go back and look. His blog is called Lacking Ambition). Anyway, his thought process is that in renting for less than others in his locale he can cherry pick his renters from a wider range, and the ones he does select end up staying for extended periods because they’re getting a better deal than most. Not bad. Ironically, I just stumbled across an email from a realtor wanting to show DH and I a nearby property with rental potential. How ironic is that? Gotta ask DH how this happened. I haven’t put the word out that this is a consideration. Quite frankly, I want to put more money into a couple of different funds I have in mind first and go for the rental after all that. I’m very excited and optimistic about our future right now. DH income is going up every month, our expenses are going down, and our future is looking very promising. It looks like a lot of us will be going forward this year. I think we’re all a lot smarter for what we’ve been through, so I’m excited about what 2017 will bring every single one of us on this group. :0)

Rental properties

What does everyone think of owning debt free rental properties? Hubby would love to own one. I am personally chicken of someone not paying or trashing the place. That blog really got me thinking about our long term since hubby is disabled and we have 7 kids.

Hi, I am new here

I actually have an HR degree and have done some professional resume writing. Mostly I do it for my friends and family. I do not think you need to pay someone all that money when alot of it can be done yourself. I would be happy to look at your husbands resume. Every resume I have redone has actually landed someone an interview. And one quastion – what you think about this service (online payday loans service with no credit check)? Thank yuo and best of luck to you!!

The word on the street is that things are about to go south with my husband’s job

He’s worked with this company for 13 years, and they’re in the process of consolidating 5 large companies down into 1 smaller one. In the past year, they’ve let go of 8 people, and they seem to just be making their way down the line. He has a resume that is functional, I suppose, but we’re looking into having his resume professionally written. Does anyone have any experience with this? I.E- was there a particular company that you used that you were pleased with, how much do you think is reasonable to pay for this service, etc? Also, does anyone have any thoughts on some of the extras that are offered in conjunction with the professional resume- cover letter, linked in profile, etc? We want to get moving with this process, but I don’t relish the idea of dropping $1k on a resume, cover letter, linked in profile, etc. On the flip side, if it gets him a job in his field in this crazy economy, it might be worth it to just bite the bullet and spend the money. I’d really appreciate any feedback from those of you who’ve had experience having your resume professionally done. Thanks in advance!

I was the one that said the piece about the healthcare

I’ve had the discussion about what things cost on your own—I was out at 16, she’s 22 and knows that she needs it…we were without for a bit before cobra kicked in and she saw what it cost for her meds–without insurance. She also knows that 2 part time jobs without benefits will not cover all her bills and college. She is finally working towards a goal.

On the other side of the coin, I have a friend that has 2 kids that are getting ready to get phased off his insurance, both have dead end jobs, no benefits and no clue. one of them has been married/divorced and both graduated with useless degrees.

Oh man, sorry to hear it is so rough, hang in there!

And I gotta say I disagree with whoever posted that they would drop their child from health care. Young adults think they are invulnerable and may not choose to pay the high price of a private policy. God Forbid, something bad could happen, and they could end up denied surgery, or stuck with a pre-existing condition. There are just too many stories of people who don’t have the money to pay who get turned down for treatments.
Deny any other thing you want, but not health insurance.

I guess that would be some better

I just really hate to see her/them struggle when they don’t have to, and the fact that her father and I can be “good parents” to let her struggle. That just eats at me. I know I have to let this play out but sleep has eluded me for the past two nights just thinking and restraining myself.

I’ve been debating the question of whether a college education is a requirement today, regardless of what field she goes into

I have to say, I think a college education really has become as critical today as a high school diploma was 20 years ago. She may not ever become a mortician, she may not even work in her degree field. But I’m trying to remember the last job application I filled out which did NOT require at least a Bachelor’s degree or some kind of at least vocational training. It doesn’t actually matter what the degree is. Rather, it shows future employers that the job candidate has not only the brains, but the discipline, to set their eye on a distant goal (ie, the opposite of “instant gratification), and work to get it. I easily believe that being a woman of color sets her up for more challenges than a young white man would face in her shoes. But even the young white man would have a heckuva time getting any job worth more than minimum wage, and with promotion potential, without a college degree. Those of us who are self-employed often came to this place after working in the professional realm (either blue-collar or white-collar) for a number of years. She has to start somewhere, and starting off even self-employed is already tough enough. Trying to do it without a college education just makes it harder. And good luck getting a blue-collar or white-collar job without either a bachelor’s or very specialized certificate training in hand. In this jobs market, she needs every ace up her sleeve she can get. Dropping out of school isn’t a guaranteed hard road, but it sure doesn’t pave the way to success.

You are so right about one thing, at least in my case..

I do not understand about being a black woman. But we can sympathize and empathize about being mothers.

I agree that we should, to the degree we have been blessed and worked hard, we should make arrangements for those left behind. Now, to leave a trust fund baby? Not necessarily. That which is not worked for is not always appreciated.

Of course, we shouldn’t want our children to suffer. Surely you are asking this tongue in cheek. You write so lovingly about your dd and your love for her and her abilities. I quite confident she is quite capable of whatever she puts her mind to.

I know in our family, my dad worked hard all his life, most of his adulthood he was self-employed till retirement in 2009. There were many years both my brother and I were not involved in my dad’s business. My dh joined my dad 2 different times as an employee. The last time was in 2000 and has been there ever since. Now we own one of the 2 businesses my dad started so I understand the part about a family business and passing it on.

In my dad’s case he didn’t know for a long time that either of his kids would join him in business. I guess that is where I am coming from …. don’t assume she will want to be a part of it just because you saw it as a ticket to a secure future, as secure as it can be in today’s times. But just because she doesn’t want to be part of it now, if that is the case, doesn’t mean she won’t later, just like finishing college.

Our dd has also been blessed by a business that she has not ever really shown an interest in running. Does that mean I should “force” her into the family business just because it’s there, running and viable? I don’t believe so. If her giftedness is not in the field of self-emploment & running a retail establishment (which is one of our businesses) … to me that is like putting a square peg in a round hole.

However our dd loves children and being with them. She works part-time in a church preschool 5 days a week and loves being with the children. It is hard work in it’s own way and so underappreciated and underpaid.

Our dd is in a different situation than yours. She has congenital physical health issues (not mentally impaired) that make it more difficult to work full time in a physically demanding job like retail. Because of her health we have had to make arrangements so she has some income coming in besides her own via the preschool and the disability she receives. She has a heart condition that usually leads to a shorter life expectancy so we may outlive her. However, we are helping plan her financial future in the event we both preceed her in death.

Dd was not interested in college and we felt it was not a pre-requiste to what she wanted to do, whether she worked with children or in the family business.

I wish your daughter the best and I hope you have some peace soon about her situation.

We are Christopher, and I think you and her dad have done a wonderful job of it….

Living in the South, in an area that is 75% African American, I can honestly hear what you are saying about the struggles a black woman has without a higher education, or marketable skill at minimum… The lady who has a booth next to ours is a black woman who has worked hard to own her own business, and in her words, become a roll model to many young women to break the stereo type that befalls these young ladies in the deep South…

Would it have been easier if he were a fellow student? I was thinking about that….I mean, I know she isn’t my child… but I heard the exasperation in your writing, and she became “our child ” LOL… and I thought, ” I would feel a lot better if he were in college”….

Just call me Mama 🙂

Pun totally intended :)

Aren’t we supposed to plan for our heirs? I have worked hard to leave her something, same as people did for me… We really are supposed to want our children to suffer? I am not asking her to do something she is physically or mentally incapable of doing.