It's one of "those" days today...

General Landlording & Rental Properties
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It's one of "those" days today...

Joe M.
Real Estate Investor · Hartville, OH · Member since 2010 · 148 posts · 174 votes

Well today turned out to be one of 'those' days.

Rental house #1: Furnace breaks down, requires $300 to fix

Rental house #2: Hot water tank sprouts a major leak, needs replaced, $500

New Rental House #3: Discovered a problem during rehab that is going to require an extra $1,500 to fix.

All on the same day......geesh I need a beer :D

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Steve Babiak
Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
16y

Since rentals #1 and #2 are now "in service", repairs are fully deductible in tax year when paid. Whether the water heater is treated as a repair or improvement (to be depreciated over life of water heater) is something for the CPA / accountant types.

Rehab costs get capitalized on house #3.

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  • Steve Babiak
    Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
    16y

    Since rentals #1 and #2 are now "in service", repairs are fully deductible in tax year when paid. Whether the water heater is treated as a repair or improvement (to be depreciated over life of water heater) is something for the CPA / accountant types.

    Rehab costs get capitalized on house #3.

    4Reply
  • Joshua D.Pro Member
    BiggerPockets Founder · HI · Member since 2008 · 16k+ posts · 5k+ votes
    16y

    Sorry to hear about the drama . . . more reasons why the 50% rule is true.

    Podcast Guest on Show #100
    1Reply
  • Account Closed
    Full-Time Investor · Charlotte, NC · Member since 2009 · 2k+ posts · 1k+ votes
    16y

    joe, i voted your post hoping it'll help cheer you up..we've all been there, but at least you were financially prepared for it instead of having to scramble and find the money

    0Reply
  • Mark UpdegraffBusiness Member
    Real Estate Broker · Rochester, NY · Member since 2010 · 1k+ posts · 697 votes
    16y

    bummer, vote from me too! Now enjoy that frosty bev!!

    Podcast Guest on Show #112
    Updegraff Group Realty4.746 Reviews
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    1Reply
  • Joe M.
    OP
    Real Estate Investor · Hartville, OH · Member since 2010 · 148 posts · 174 votes
    16y
    Originally posted by Bryan Alenky:
    joe, i voted your post hoping it'll help cheer you up..we've all been there, but at least you were financially prepared for it instead of having to scramble and find the money


    Good point.

    I'm not sure if I read it on here, or somewhere else, but I try to follow the suggestion to keep around $2,500/property in reserve to cover repairs.

    I'm sure as I get more experience and data from my own properties I'll be able to refine that number for my situation, but for now it works.

    0Reply
  • Bryan Hancock
    Investor · Round Rock, TX · Member since 2010 · 8k+ posts · 4k+ votes
    16y

    How does that always happen? Whenever stuff breaks it ALWAYS seems to happen all at once! It is almost like the tenants all get together and script the thing out….or the properties do the same!

    0Reply
  • Josh Green
    Financial Advisor · Tampa Area, FL · Member since 2008 · 956 posts · 214 votes
    16y

    i just received a bill for $741.57 from the city for the pavement assessment infront of my rental. fun!

    0Reply
  • Michael S.
    Residential Real Estate Agent · Camden, NJ · Member since 2010 · 126 posts · 55 votes
    16y
    Originally posted by Bryan Hancock:
    How does that always happen? Whenever stuff breaks it ALWAYS seems to happen all at once! It is almost like the tenants all get together and script the thing out….or the properties do the same!


    tell me about it. on the weekend of July 10th, 3 of my 4 properties the tenants moved out. one bought a house, one eviction, one disappeared.
    0Reply
  • Joe M.
    OP
    Real Estate Investor · Hartville, OH · Member since 2010 · 148 posts · 174 votes
    16y
    Originally posted by Josh Green:
    i just received a bill for $741.57 from the city for the pavement assessment infront of my rental. fun!


    You have to pay a "pavement assessment"? Meaning you have to pay for the stretch of street in front of your house? I've never heard of such a thing.
    0Reply
  • Chris L.
    Investor · Fort Wayne, IN · Member since 2009 · 391 posts · 257 votes
    16y

    Joe,
    Just to help you feel better, I discovered an outstanding electric bill for $381.07 that was about to go into collections. How they managed to get the electric back into our name without us getting the bill is beyond me.
    Being a rental owner sure exposes you to the devious nature of some tenants.
    Hang in there. It will get better but this is also part of the business.
    Chris

    1Reply
  • Steve Babiak
    Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
    16y

    Speaking of devious behavior of tenants. I recently denied a tenant's application; yesterday, mail addressed to that person appeared in the mailbox at that rental unit they applied for. Just another good reason to not have rented to that applicant.

    0Reply
  • Josh Green
    Financial Advisor · Tampa Area, FL · Member since 2008 · 956 posts · 214 votes
    16y
    Originally posted by JoeinOH:
    Originally posted by Josh Green:
    i just received a bill for $741.57 from the city for the pavement assessment infront of my rental. fun!


    You have to pay a "pavement assessment"? Meaning you have to pay for the stretch of street in front of your house? I've never heard of such a thing.



    you got it man....that's how we roll here in FL...lol i would say it's just the city limits of that property, but the same thing happened to my mom's property and it was assesssed by the county that time.
    0Reply
  • Joe M.
    OP
    Real Estate Investor · Hartville, OH · Member since 2010 · 148 posts · 174 votes
    16y
    Originally posted by Chris Luithly:
    Joe,
    Just to help you feel better, I discovered an outstanding electric bill for $381.07 that was about to go into collections. How they managed to get the electric back into our name without us getting the bill is beyond me.
    Being a rental owner sure exposes you to the devious nature of some tenants.
    Hang in there. It will get better but this is also part of the business.
    Chris

    Holy Crap!

    My local utility has an option for landlords where you can allow the bill to be swapped back to you in between tenants.

    They have some security questions you set up and then answer to avoid a tenant from swapping it back to you w/o your knowledge.

    So far it has worked well.

    0Reply
  • Chris L.
    Investor · Fort Wayne, IN · Member since 2009 · 391 posts · 257 votes
    16y

    Joe,
    BTW, I failed to mention that I discovered that issue last night on the electric bill.

    Trying to sort this out with the property manager and I still do not know how the tenants managed to take advantage of the situation that way. Of course, the tenants moved out early and I am sure they are no where to be found.

    We have that auto switch feature for the Landlord agreement as well. It is a catch 22 IMHO. If you don't have the agreement, you end up with no utilities in the winter and busted pipes or you end up paying a tenant bill that you should not have to.

    Keep your head up and keep moving forward.
    Good Luck
    Chris

    0Reply
  • Tracey B.
    Real Estate Investor · MD · Member since 2010 · 124 posts · 84 votes
    16y

    Michael S, what do you mean tenant disappeared? Were they locked up for violating probation? lol Are you saying they abandoned your property?

    0Reply
  • Account Closed
    Landlord · Seattle, WA · Member since 2010 · 3k+ posts · 1k+ votes
    16y

    It seems that days like this will happen when you manage your own properties. So, now you may be good for quite awhile.

    There are some bad days, I probably will never forget. One tenant that it took awhile to evict and once we got in had caused approx 15K in damages.

    0Reply
  • Michael S.
    Residential Real Estate Agent · Camden, NJ · Member since 2010 · 126 posts · 55 votes
    16y
    Originally posted by mdlandlord:
    Michael S, what do you mean tenant disappeared? Were they locked up for violating probation? lol Are you saying they abandoned your property?


    maybe i should used abandoned... she failed to pay June rent. so when i went over there the neighbors said she moved or was moving down south. so i gave her a thirty day notice (June 10)and put all her stuff on the curb(July 10) to be picked up by the city.

    0Reply
  • Jeffrey K.
    Real Estate Investor · Milwaukee, WI · Member since 2008 · 1k+ posts · 671 votes
    16y

    That day doesnt sound so bad sometimes. Once you own a few more that will start to be an every day thing. I manage my own properties so it hurts extra each time something like this happens. If I was a PM company it would just be money in the bank for a little work.

    We always say, "there is no such thing as a good day in property management, just some that arnt as bad as others."

    Welcome to being a landlord

    2Reply
  • Don Hines
    Investor · Little Rock, AR · Member since 2010 · 628 posts · 251 votes
    16y
    Originally posted by JoeinOH:
    Well today turned out to be one of 'those' days.

    Rental house #1: Furnace breaks down, requires $300 to fix

    Rental house #2: Hot water tank sprouts a major leak, needs replaced, $500

    New Rental House #3: Discovered a problem during rehab that is going to require an extra $1,500 to fix.

    All on the same day......geesh I need a beer :D


    Wow Joe!!!
    I have been trying to sell the Mrs on the idea that we need some passive income. Then you go and post something like this. She just has started liking me again after losing on a rehab; 2 YEARS AGO!!
    Don
    3Reply
  • Jeffrey K.
    Real Estate Investor · Milwaukee, WI · Member since 2008 · 1k+ posts · 671 votes
    16y

    Bonds are for passive income. Rentals are work.

    2Reply
  • Tracey B.
    Real Estate Investor · MD · Member since 2010 · 124 posts · 84 votes
    16y

    Please elaborate Jeff. Which bonds do you like and why?

    0Reply
  • Account Closed
    Landlord · Seattle, WA · Member since 2010 · 3k+ posts · 1k+ votes
    16y

    When you choose to manage your own rental properties. There is work involved. If you only have a few SFRs, it generally is not that much work most of the time. Problems do occur over the course of time.

    When you have more rentals that you sell manage it progressively becomes more work. My rentals are in good areas, but acts of nature and time don't care about neighborhoods. I've had a tree fall on a rental and puncture the roof no one was hurt, but the roof and some of the structure had to be repaired.

    0Reply
  • Jeffrey K.
    Real Estate Investor · Milwaukee, WI · Member since 2008 · 1k+ posts · 671 votes
    16y

    I own very few bonds and most of them are T bonds given to me as gifts. My point is that owning rental property is not passive income. That is guru speak.

    0Reply
  • Josh Green
    Financial Advisor · Tampa Area, FL · Member since 2008 · 956 posts · 214 votes
    16y

    there are some bonds and bond funds that are producing decent returns (some upwards of 10% taxable equivalent yields). legally, i can't get into specifics though. check with your broker.

    0Reply
  • Bryan Hancock
    Investor · Round Rock, TX · Member since 2010 · 8k+ posts · 4k+ votes
    16y

    I don't think real estate investors that carry debt should invest in bonds. That is overweighting your portfolio in fixed income product. Pay down your mortgages if you want that exposure.

    Bonds are very poor inflation hedges...especially bonds with long maturities.

    1Reply
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