Feb 09
6
Last week, Dave wrote an article about managing a rental property yourself vs. hiring a professional property manager. We received plenty of emails from our readers telling us stories and asking questions about property management. But, one reader’s letter really stood out to me, and I thought it was a good one to share.
Our reader from Washington had a good idea for rental property owners (it’s something we do with our Toronto properties) and an interesting story to share.
She has found herself in a tough situation with her property and current tenants, and while Dave did write her back with some comments, she has some difficult decisions that only she can make. I thought her story was interesting, and that it’s one that many landlords can relate to – let me know what you think!
Do you have a terrible property management experience to share? Or maybe you’ve been a tenant and you have a bad landlord story to share? I know it goes both ways!!
Here’s the email:
Hello!
I really enjoy your e-mails and gift “incentives” such as the calculator, and your articles relate so well to what I have experienced dealing with income property and tenants. It can be very trying.
As a suggestion, if you’re going to be your own property manager, it certainly doesn’t hurt to have one of your tenants act as “manager”. I don’t exactly tell them that, and of course, there is some trust involved, and you always take a chance with anyone you trust to help you. It also helps to line up a handy-man, or an electrician, plumber, carpet cleaner, painter, and appliance dealer, unless you can do some of this yourself. It’s easier for me to pay $150, or so, to a carpet cleaner and have it done right and fast, rather than me trying to do it. And, of course, there is the deposit you can deduct a portion of this from, if you’re lucky enough that the tenants moving out have payed their last month’s rent!
When I purchased my duplex, I took it on with the tenants already in place. The responsible couple were on a month-to-month at the end of their lease, and the other couple were just signed by the previous owner to a one-year lease. At this point, both couples are on a month-to-month after their leases expired.
I was supposed to move in to the duplex as my personal residence, but when I saw that I was stuck with a lease for the “rowdy” couple, and my only option was to ask the long-term “responsible” couple to move out, I changed my plans. They both have young kids, and they’ve both now been on a month-to-month basis for several years now.
One of my tenants is very responsible, and always pays rent on time, or sometimes even early. He keeps up the yard (as a matter of being responsible, they should do this anyway, but law says landlord needs to maintain all common areas), and he lets me know of any problems at my duplex; and if necessary, he is pretty good at fixing things – even “fixing” the rowdy neighbors. But with this, I let him know this is the reason I keep his rent down, and he appreciates it. A small price for me to pay to keep things on track.
That being said, my other tenants get drunk all the time and can get rowdy. They are also hard on things. I’ve had to replace some of the electrical because they were overloading the hot water heater, replaced the refrigerator, and I won’t be replacing the washer. Also, they now have snuck in a little dog and won’t get rid of it. I worry about having to replace the carpet, but they say it stays kenneled when they are at work.
This is a hard call to make about whether or not to start a warning and eviction process because of the dog (and rowdiness sometimes), because for the most part, they pay their rent on time. In addition, my other tenant pretty much helps keep them in line when problems arise; however, I worry about losing the “responsible” tenants, since their family is outgrowing the duplex. It’s a juggle.
I’ve considered raising the rent of the “rowdy” tenants to accommodate having the dog.
They’d either have to pay the increase, or leave (the gal gets some public assistance being a single mom). That’s the only way I can see to solve the problem for me other than evicting them which will lead to having to spend the time, effort, and money on cleaning the place, replacing stuff, advertising, interviewing, and new background checks, etc. Ugh!
I’ve been an actual property manager for an employer in the past, and I really don’t have the guts for it. (I’m quite like Julie:-) In the past, I’ve dealt with deliberately set fires, drugs, holes punched in walls, wax dripped on carpets, and nails and chalk everywhere, last month’s rent not paid, and appliances stolen. But, it certainly taught me lessons about dealing with people.
While my current situation is saving me some money for not having to pay a property manager, it is primarily because I am just got laid off from my regular job, and I also have an ARM loan that I need refinanced. It’s a mess, but I deal with it each time the first of the month rolls around.
I recently read a comment from a person who owns apartment buildings. He said, if you own income property, you have to treat it like a job and “manage” it on a constant basis, and he’s right!
Thank you for everything!
You’re doing a great job with no “fluff” and good, useful content.
Lynda
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I dont own a home but I find that the light you shed on the topic very clear!
