I’ve dreamed about becoming a landlord one day and man, my dreams did not prepare me for what we went through in the first year of being a landlord.
Let me back up a little bit. This is important. Growing up, I never thought real estate investing was a career choice, most of my family invested in a rental property every 5-10 years or so, so i always thought it was only a ‘side’ thing. So like every little girl, I dreamed about a career in medicine, law, design and business, and my dream husband was in a like field. Fast forward to college where my new dream career quickly become a stay at home wife/mom (eventually) and my husband running his own business from home while I hangout with my girlfriends, lounge by the pool, run the kids PTA, throw the best parties, drive a fancy SUV.. all the things a 20 year old dreams of. Okay maybe just what I dreamed of. What movie did I get that idea of life from??
In 2017, my now husband quit his job at a Fortune 200 company and started on the path of entrepreneurship and product licensing. He worked countless hours and nights coming up with a product that solved a problem, research, development, networking, all the above. This product didn’t work out (the company that was most interested at the time merged with a company that had zero interest) so he went to work at a fortune 500 company. He got traditional financing for a house, we moved in and rented the other rooms to our friends. He stayed at that job for about 7 months, and his department got downsized. At this point, he was offered a severance or a new position within the company and he took the 3 month severance. This is when the journey really began. He hasn’t worked for someone else since 2019, I took a year off of medical work to build the business that will someday allow me to be the stay at home wife/mom I’ve dreamed about haha.
If you’re interested in hearing more of our story, I’ll write it in a separate post.. because it deserves it’s own post.
Back to being a first time landlord.. sorry for the sidetrack.
This was a crazy experience and I don’t recommend anyone do what we did the first time around, please learn from our mistakes!
We were in a hurry to get the house rented because the mortgage is expensive (we only put 3% down), we had another property we just took over as a fix and flip and there were tenants in that one. So, we decided to move them into our beautiful house thinking “what’s the worst that can happen” WE WERE SO NIAVE. The worst happened… or at least some version of the worst. This is what the house looked like when we lived there…
Over the last year, we’ve had 8 different leases for a 4 bedroom home. We’ve had rodent problems, neighbor complaints, smoking inside, service animals and unauthorized animals, 4 lease breaks, covid-19, arrests, poker tournaments, babies being born, unauthorized subleases, strippers, gang members, broken cabinets, police visits, appliances break.. just to name a few of the things we encountered.
How did this happen you ask?
Like I mentioned, we were desperate to get it rented ASAP so we foolishly skipped the background checks, employment verifications and formal income verifications.
We also got our first set of tenants from a house that was in foreclosure (the tenants were ‘paying’ the owner and the owner wasn’t paying the mortgage, so we bought the townhome and flipped it). We soon learned that they had 6 people sharing a 2 bed 1 bath townhome, which should have been a good indicator of how they lived. We also had one tenant off of HotPads.
Anyways, when one lease would break, we were faced with the dilemma of finding a random person to move into a house of friends, or to have a friend of the friends move in. This was a bad idea and we knew it, but we wanted to fill the room without putting a random stranger through the drama of the house.
We also didn’t set the best expectations with this first round of tenants because, we were naive and assumed they would be as respectful as we were to them. we were wrong.
We had to reach out several times every month to collect rent, usually rent would be paid but never on time. We would have to remind them constantly of things like taking trash outside the house and putting it in the trash can.. oh and using trash bags.
After they moved out, I truly believe the house hadn’t been cleaned since they moved in. We also didn’t do a great job of ‘hiding’ that we owned the house rather than just manage it. Here are some photos of how they kept the house…
Along the lines of managing expectations and doing due diligence in finding a quality tenant.. our tenants (and likely most) didn’t understand that they are paying to have clean, safe and affordable housing however we took the risk to buy the house. They often thought the house was free for us to keep, and everything they paid us was ‘extra’ money for us (lol what is extra money?) . This is something we’ve learned that a lot of renters, especially younger ones don’t understand.
Everything has been resolved at this point, besides the cracked window but that’ll be replaced soon! The best part about this is that our tenants paid us rent all through the shut down of 2020, and we have cement walls so there isn’t any drywall repair!
Now, we’re on to year #2 and hopefully we’ve learned a thing or ten. Keep an eye out for a post about the updates we did to this house before renting it out again! And.. likely another post talking about some of the crazy stories our tenants told us (you can’t make these up…) .
Cheers to living and learning.. and learning some more.
Coffee & Chaos 