Okay blog, here’s the deal. I’m broke. Yesterday I had a minor panic attack because I’m in a lot of debt and don’t know how I’m gonna pay all these damned bills. Maybe it wasn't an actual panic attack, but I was definitely feeling overwhelmed. I have to write everything out here and find solutions to these problems. Now. So I’m gonna turn to the one person that has always made me money: Me.
These are the current bills that are driving me nuts, listed in order of priority:
National Grid bills - About $500
Anita - $569.40 for May
Post Office Dues - $200
Lawn Mowing Services: $140
Handyman Alfonso Balance: $2100
Total Remaining Debt: $3509.40
If all my tenants paid rent on time, I wouldn’t have a problem with these bills. So let’s go through each issue and get the problem resolved.
Property 2
Problem: Both Nicholas and Tyrell have yet to pay rent and I’m tired of it. Nicholas will most likely pay sometime this week, but Tyrell is a lost cause. I’m tired of his missed deadlines and it’s time to take action.
Solutions
I have a meeting with Tyrell this afternoon when he’s giving a pathetic $100. I don’t care how it’s said, but he has to understand that his tenancy is over and I’m sending him a 30-day notice tomorrow. He’s already paid $1100, so the money today will make it $1200 of the $1375 owed. As long as he pays the remaining $210 ($175 + $35 late fee) before the end of the month, I’ll give him July to find a place. If he doesn’t pay, I file an eviction in July for the $175 plus the $715 for July’s rent. One way or another, he has to leave before the end of July.
As far as Nicholas goes, I’ll wait for him to pay before I tell him that he’ll be given a 30-day notice if he misses one more payment. I’m choosing to be more aggressive with Tyrell because it’ll be easier to rent his apartment out. He’s barely ever there, and I did extensive renovations before he moved in. Nicholas has been in his apartment for over 2 years, and I know his apartment will need at least $700 worth of repairs that I simply don’t have.
Property 3
Problem Ugh. Where do I start? Thomas and Brie have broken up, so Brie moved back in with Rory. This might affect Thomas’ rental assistance, as it’s in Brie’s name. Rory called the other day to let me know they’re looking for a two bedroom apartment to live in. Also, Eugene’s late payments are also getting on my damned nerves.
Solutions
Before he lost his job, Thomas was the first to pay every month since I bought Property 3. He’s paying $200 tomorrow out of his unemployment, and I’ll work with him even if Brie cancels the rental assistance. His apartment would be an absolute nightmare to renovate, so I really don’t have a choice except to work with him. I may even have to reduce the rent just to keep him there. Better to lose $30 and keep the place occupied than to keep the rent the same and end up with a vacant apartment that would cost over $6,000 to renovate..
Rory and Brie can leave whenever the fuck they want. Rory’s apartment is the nicest of the four, and I’m tired of having a convicted child rapist as my tenant. It’s gnawed at me for years that he and I have any connection, so I’ll be more than happy to let the both of them go.
With Eugene, I think he’s used to paying late. The truth is that I didn’t have a problem with his late payments until problems arose with Thomas and Brie. As long as Thomas gets back on track, I won’t have an issue with Eugene.
Property 4
Problem: It’s been a week since I’ve put the newly renovated Property 4 up for rent, but it hasn’t generated much interest. I really thought I could get it rented out for $1,000-- and maybe I still can-- but that place needs to start making money NOW.
Solution: Reduce the rent to $900. It’s a competitive price that will generate interest with good tenants, and it’s still high enough to keep the crackheads at bay. As time goes on, I can gradually raise the rents.
So that solves my money woes as far as tenants go. Yesterday was the first day in over a month that I did not consume outside food, so it looks like I'll be saving money in that department as well. I also need to organize my papers as Damon suggested last month. I already cleared my desk of all my old papers last week so now I need to scan, file, and shred pertinent documents. It'll take a while, but I know how much easier it is to think and have a clear head when my stuff is organized. Being broke sucks, but being broke without a plan is much worse. And look, I'm already starting to feel better.
So there, Ahkenaten. You have your solutions. Now go make that money...
These are the current bills that are driving me nuts, listed in order of priority:
National Grid bills - About $500
Anita - $569.40 for May
Post Office Dues - $200
Lawn Mowing Services: $140
Handyman Alfonso Balance: $2100
Total Remaining Debt: $3509.40
If all my tenants paid rent on time, I wouldn’t have a problem with these bills. So let’s go through each issue and get the problem resolved.
Property 2
Problem: Both Nicholas and Tyrell have yet to pay rent and I’m tired of it. Nicholas will most likely pay sometime this week, but Tyrell is a lost cause. I’m tired of his missed deadlines and it’s time to take action.
Solutions
I have a meeting with Tyrell this afternoon when he’s giving a pathetic $100. I don’t care how it’s said, but he has to understand that his tenancy is over and I’m sending him a 30-day notice tomorrow. He’s already paid $1100, so the money today will make it $1200 of the $1375 owed. As long as he pays the remaining $210 ($175 + $35 late fee) before the end of the month, I’ll give him July to find a place. If he doesn’t pay, I file an eviction in July for the $175 plus the $715 for July’s rent. One way or another, he has to leave before the end of July.
As far as Nicholas goes, I’ll wait for him to pay before I tell him that he’ll be given a 30-day notice if he misses one more payment. I’m choosing to be more aggressive with Tyrell because it’ll be easier to rent his apartment out. He’s barely ever there, and I did extensive renovations before he moved in. Nicholas has been in his apartment for over 2 years, and I know his apartment will need at least $700 worth of repairs that I simply don’t have.
Property 3
Problem Ugh. Where do I start? Thomas and Brie have broken up, so Brie moved back in with Rory. This might affect Thomas’ rental assistance, as it’s in Brie’s name. Rory called the other day to let me know they’re looking for a two bedroom apartment to live in. Also, Eugene’s late payments are also getting on my damned nerves.
Solutions
Before he lost his job, Thomas was the first to pay every month since I bought Property 3. He’s paying $200 tomorrow out of his unemployment, and I’ll work with him even if Brie cancels the rental assistance. His apartment would be an absolute nightmare to renovate, so I really don’t have a choice except to work with him. I may even have to reduce the rent just to keep him there. Better to lose $30 and keep the place occupied than to keep the rent the same and end up with a vacant apartment that would cost over $6,000 to renovate..
Rory and Brie can leave whenever the fuck they want. Rory’s apartment is the nicest of the four, and I’m tired of having a convicted child rapist as my tenant. It’s gnawed at me for years that he and I have any connection, so I’ll be more than happy to let the both of them go.
With Eugene, I think he’s used to paying late. The truth is that I didn’t have a problem with his late payments until problems arose with Thomas and Brie. As long as Thomas gets back on track, I won’t have an issue with Eugene.
Property 4
Problem: It’s been a week since I’ve put the newly renovated Property 4 up for rent, but it hasn’t generated much interest. I really thought I could get it rented out for $1,000-- and maybe I still can-- but that place needs to start making money NOW.
Solution: Reduce the rent to $900. It’s a competitive price that will generate interest with good tenants, and it’s still high enough to keep the crackheads at bay. As time goes on, I can gradually raise the rents.
So that solves my money woes as far as tenants go. Yesterday was the first day in over a month that I did not consume outside food, so it looks like I'll be saving money in that department as well. I also need to organize my papers as Damon suggested last month. I already cleared my desk of all my old papers last week so now I need to scan, file, and shred pertinent documents. It'll take a while, but I know how much easier it is to think and have a clear head when my stuff is organized. Being broke sucks, but being broke without a plan is much worse. And look, I'm already starting to feel better.
So there, Ahkenaten. You have your solutions. Now go make that money...
Being a landlord sucks. It seems that I am constantly losing money since all of my properties are non-local. You having so many problems with local tenants explains why.
ReplyDeleteI think it depends on the situation, Trix. For example, 90% of my current tenant problems are because of me, rather than the landlording profession. Both Nicholas and Tyrell should have been out of Property 2 since February, but I chose to take that risk and make that mistake. I don't mind Property 3 giving me problems, but Property 2 is in a great neighborhood, and I should have known better than to accept anything less than on time payments and quality payments.
DeleteTo me, being landlord is about doing business as an extension of myself. I have ideas on how life and things should be, so I apply it to how I manage properties. For example, I am very lazy and don't like to deal with legal stuff. So I make sure all my leases are short and go to month-to-month within 6 months. This prevents me from dealing with lease renewals and finding reasons to break the lease when I want them gone.
As a non-local landlord, you can't really do business as a true extension of yourself. Your business is based on the rules and regulations of whomever is the property manager. So if you're constantly losing money, there's only so much you can do about it.
Property 3 was bought with $15,000. I've made over $19,000 so far. Property 2 cost a little over $5,000 (Hud 3% down program). I've made over $21,000 to date. I spent $16,000 on Property 1, and it's made over $19,000 so far. These aren't major returns, but I've learned many lessons and haven't had to pay for it.
No matter what happens, I plan to continue buying properties. Being a landlord was tough this month because of the Property 4 repairs and my own bad decisions in February. Once I wrote this post to get things organized and clear, things got a lot easier. Whatever you do to clear your head so that you can make objective decisions, you should probably do it. Being a landlord is not for every one, that's the truth. And maybe that's going to be true with you. But I never underestimate my own ability to get myself out of crappy situations. Maybe the same can work for you. I don't know the amount of properties you own, mortgage payments, equity, turnover ratio, management costs, or rental income. But I think you can look at these objectively, and find a way to make it work.
I think you've got three options: a) look at the situation and find a way to make it work; b) look at the situation and find the fastest way to get out of property ownership, or c) look at the situation and find a way to get out of it and then start over.
P.S.: Option A is my favorite