Why you need reserves as a landlord

6 Replies

Here is a good case study of why you need good reserves and not to stretch yourself too thin when you're a landlord.  There's a property I'm working on with some other investors to buy. The current owner has this rental, but they got themselves involved in another project that for whatever reason, they ran out of money to do. So they were selling the rental property.

Some time after the offer was made, the furnace went out on the property (the furnace was a dinosaur, so it wasn't like this was a huge surprise).  I think it's been several weeks now and finally a furnace has gotten put in.  Apparently the owners didn't have the money to put in a furnace, so they worked with a contractor to put one in close to closing so they could pay the contractor out of closing!

If you don't know what November/December is like in Wisconsin, then let me tell you it can get COLD!  From what I've heard, the tenants have been using small space heaters and boiling water on the stove to keep themselves warm.  The temperatures have been down in the 10-15 range, and has recently gotten up to around 40 or so.

Those poor tenants!  So be a good landlord, and make sure you have money set aside, so that if something happens like this, you can get the situation taken care of immediately.

Dawn Anastasi, Core Properties, LLC | http://www.coreprop.biz | Podcast Guest on Show #29

Not to mention that most state codes allow tenants recourse in such a situation. I know that Missouri does. A tenant here can withhold rent and other tactics. Now if it was AC in spring that's one thing. But no heat in a Wisconsin winter? 

Medium head icon colorRyan Dossey, Call Porter | http://Callporter.com | IN Agent # RB15001099

I can't believe that they couldn't have charged it.  Tapped out with the next "project" maybe... not a good predictor of success, they don't deserve it if that's how they treat people.

Originally posted by @Dawn Anastasi :
Originally posted by @Ryan D.:

I can't believe that the tenants tolerated that. 

 If I had been the tenant, I would have been livid.

 If I had been the tenant, I would have left,

Medium greenapartmenthires 1024x1024Roy N., Louer Louer Ltd. | 1.506.471.4126

Wow that's terrible....I can't believe the tenants stayed. Great info!

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