Rental Property Highs and Lows

Real Estate Broker · Ashland KY · Member since 2018 · 57 posts · 71 votes

Generally speaking I'm a realist that leans more on the positive of most situations. However for the last month I have been getting my butt kicked( tenant complaints, costly repairs, and next month will be my highest vacancies I have ever had). I understand life and business has it's seasons and it will get better soon. I'm still a fan of the rental business and love a lot about it but recently I don't want to even look at my phone because it's going to be more bad news.

In your reply explain a bad rental situation or situations that all happen at once. Explain if you could have prevented the situation or what you will do different in the future. I hope this post will give new landlords a perspective on the business and hopefully it will help me with my pity party.

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Jonathan GreeneBusiness Member

Real Estate Consultant · Madison, NJ · Member since 2016 · 6k+ posts · 7k+ votes

It can always be worse @Shane Craig. I have a five-unit commercial strip mall in Westchester, NY that backs up on protected wetlands. 10-15 years ago, the town made us regrade the entire rear-drive area because they felt the run-off was impermissibly going into the edge of the wetlands. With other things the town dropped on us, it was $100,000. Five years later they made us do it again. We had lawyers, everything, nothing worked. I've also found three abandoned oil tanks on one property, with one leaking into a water source. Jackpot.

This is why I frown on all the advice out there for new investors to gather units, all with small margins. Because when it hits the fan, it hits all over and if reserves are low, it can be a disaster. If your units are solid and maintenance good over the years, you are just in a dip. It will all come back. Slow and steady.

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Shane Craig
OP
Real Estate Broker · Ashland KY · Member since 2018 · 57 posts · 71 votes
6y
@Kenneth Mooney
I agree with you.
Starting out I would buy something and do as little as possible to get it rented. But I starting to completely remodel rentals to prevent problems in the future.
1 Reply
Shane Craig
OP
Real Estate Broker · Ashland KY · Member since 2018 · 57 posts · 71 votes
6y
@David Barnett
You got it right. Reserves are key!!!!
0 Reply
Shane Craig
OP
Real Estate Broker · Ashland KY · Member since 2018 · 57 posts · 71 votes
6y
@Dawn P.
After reading your post I realized I don't have anything to complain about. Keep your head up. Next year hopefully will go a lot smoother.
1 Reply
Shane Craig
OP
Real Estate Broker · Ashland KY · Member since 2018 · 57 posts · 71 votes
6y
@Matt P.
Quick 12k LOL
When I make a large repair like that the only positive I can take away from it is that I will hopefully not have to deal with that issue for years.

0 Reply
Shane Craig
OP
Real Estate Broker · Ashland KY · Member since 2018 · 57 posts · 71 votes
6y
@Shawn Ackerman
Man!!!!!!! I feel for you man.
I have started putting fire extinguisher in all my properties. Who knows if someone would be home to use it but you never know.
0 Reply
Shane Craig
OP
Real Estate Broker · Ashland KY · Member since 2018 · 57 posts · 71 votes
6y
@Tim Rostro
Being a long distance landlord terrifies me.
1 Reply
Monica Lewis
Member since 2019 · 47 posts · 16 votes
6y
Definitely just hang in there. Few months ago I had to replace the air conditioning, hot water heater, and fix the floor in one of the bedrooms all within a few weeks. Prior to that, I went almost a year with no repairs. Sometimes **** just happens all at once.
0 Reply
Matt P.
Investor · Columbus, OH · Member since 2015 · 625 posts · 601 votes
6y
@Shane Craig Real talk. It sucks when it happens but you definitely feel good knowing it's out of the way.
0 Reply
Matt P.
Investor · Columbus, OH · Member since 2015 · 625 posts · 601 votes
6y
@Dennis M. Well said
0 Reply
Tim Healey
Investor · West Palm Beach, FL · Member since 2016 · 62 posts · 27 votes
6y
Hi Shane, I owned a duplex for a while that I thought had reached maximum annoyance... until one of the tenants died in there (I'm not going to get into how/what happened).

This place was already driving me nuts, it had so much little stuff go wrong, the two tenants not getting along, fence blown over by a hurricane. Nothing much showed up in the property inspection, I think it was just old and not well maintained by prior owner so a lot of stuff fell on me. It cash flowed nicely though which helped ease the pain.

Eventually a realtor friend came to me and offered to buy it at a price that put some cash in my pocket, and I cut my losses. That one just seemed cursed. I've moved onto to look for new deals, hopefully the next ones are smoother!
1 Reply
Payton Pearson
Member since 2019 · 114 posts · 111 votes
6y
I had horrible tenants dumped on me by a previous owner of a property that I owned, solely for the purposes of ensuring that the loan process completed properly. Not only this, but she woefully under-rented her property to these tenants (she was kind of a slum lord).
A couple months later, one tenant is buzzing my phone off the hook, calling the police, and constantly demanding work be done on his unit, while paying what amounts to pennies to live in the nicest area in Dayton, Ohio ($460/month). This is what I call a champagne appetite on a beer budget. Another one of the tenants starts smoking in his unit and then just up and says he wants out of the lease. Due to the fact that he's paying $450/month for his unit, I oblige, and let him out of it no contest.
These stories pale in comparison to some of the stuff others have had to deal with, but I can tell you they were not fun.
2 Reply
Account Closed
Rental Property Investor · Canton, OH · Member since 2017 · 1k+ posts · 1k+ votes
6y
@Shane Craig

This business can be Murphy's Law, that's for sure.

In the last 30-45 days I had:

- 4 vacancies (and you don't even want to know what some of my tenants left behind!)

- 1 eviction

- 2 HVAC repairs

- 2 basements with water issues

- 1 property flagged as uninhabitable by code enforcement due to the filth of a tenant

- 2 broken garage doors

- 1 roach infestation

- Clogged plumbing that needed hydro-jetted

- Broken sliding glass door

- Ceiling repair

- 4 doors that pulled out of the jams

Trust me, it sucked a** (I work a W2 job on top of all this too). That said, all 5 properties are now re-rented (1 tenant even paid 6 months in advance) and most of the repair issues have been handled...and believe it or not, I will probaby still at least breakeven ($) due to security deposits, getting things fixed/re-rented quickly, having a reserve, etc.

Could I have prevented any of those things?...maybe some, but not most. Now the positives of this:

- #1 you learn how important it is to have a good team in place!

- the importance of saving in advance for repairs, vacancies, capex.

- The experience teaches you many new things!

- You get tougher and much thicker skin! Future issues won't be as emotional.

- (For me at least) you learn that having multiple cashflowing properties can help offset some unexpected expenses

- The experience tests your resolve and how you handle stress. I identified a lot of things I need to improve on (mentally).

- You wake up to live and fight another day.

Keep your head up! We're all here to help!

1 Reply
Anthony Wick
Rental Property Investor · Ankeny, IA · Member since 2017 · 2k+ posts · 3k+ votes
6y
@Shane Craig
In September;
Traveled for work for 2 weeks out of state; rehabbed a unit and found a tenant; another tenant stopped paying rent and had to be evicted, so we rehabbed that unit; main sewer plugged in a unit; daughter needed surgery (she’s good); best friend died suddenly while I was out of state.
It’s been a rough 30 days, but I know things will get better. New problems will arise, and we will handle them one at a time. It’s all you can do. Keep climbing that mountain.
1 Reply
Shane Craig
OP
Real Estate Broker · Ashland KY · Member since 2018 · 57 posts · 71 votes
6y
@Account Closed
After reading your post it puts things into perspective.
1 Reply
Merle Brubacker
Investor · Medford Wisconsin · Member since 2019 · 57 posts · 18 votes
6y
@Shane Craig I don't have any stories yet being new but I applaud you for starting this thread. There are many lessons in here for us new guys thank you!
Signed, furiously saving for my turn
0 Reply
Dennis M.
Rental Property Investor · Erie, PA · Member since 2018 · 6k+ posts · 9k+ votes
6y
@John Wallace
Wow man that was pretty tough !
0 Reply
Ron Gallagher
Investor · Washington, DC · Member since 2017 · 198 posts · 323 votes
6y
I've had my rentals burn down to the ground in a fire in the middle of the night, I have had my tenants not pay their rent and go silent on me only to find out they are in jail, I've had to take entire interior walls down to plug up holes in the exterior brick wall to stop a rodent (and one possum) infestation, etc. etc.
Whenever I feel like I'm having "one of those days" as a landlord I just look at my bank statements and immediately feel better :)
1 Reply
Chad McLeod
Member since 2019 · 58 posts · 60 votes
6y
This is probably pretty minor compared to others, but I had a pretty rough experience with my first PM. He was a one-man shop but I got multiple referrals from people who used him and I figured if it didn't work I would just switch to a bigger company. Well, almost immediately after he took over as PM he completely dropped off the face of the earth. Literally no communication -- no replying to emails, voicemails, nada. I found out later that right after he became my PM he found out his wife got cancer. I think he just kind of lost it and went off the rails a bit.
It's obviously a horrible thing for anyone to go through, but I think at some point there needs to be a phone call or email explaining the situation to your clients if you're the only guy. Needless to say I go with bigger companies these days!
0 Reply
John WallacePro Member
Member since 2018 · 24 posts · 29 votes
6y
This thread has had me going down memory lane today! I forgot to mention earlier the wonderful tenant we had that NEVER called us for anything! She lived there for almost 10 years and was super friendly when dropping off the rent (on-time, every time) and since it was only our second property, we thought we had hit the tenant jackpot. Then she moved. It took 3 of the largest dumpsters and additional countless trips to the dump to clear the house out. There were cobwebs everywhere-like you only see for Halloween decorations, all toilets were clogged and had to be removed to begin figuring out how many items had been flushed, the can goods in the pantry were empty because apparently they had been there so long that somehow bugs had gotten into them and eaten the contents. The counters and floors were in great condition however because they were covered with layers of toys, clothes, stuff, stuff, and stuff. What a shock! Our 'awesome' tenant could've been on the Hoarders. I think that turn around cost about 13k. Then about 3 years ago we had to replace the entire corner of the same house because of termites in the kitchen. It was like we took a huge cookie cutter and cut the entire kitchen away from the house and replaced everything but the roof (termites hadn't made it there yet). No, we didn't have a termite bond because our first handy man treated all properties with some kind of lime mixture and when he quit working for us due to a disability, it didn't occur to us to get bonds and have annual treatments but, we do now. This house is the one I would most like to get rid of because of the trouble it has been BUT.... we have another great tenant!
0 Reply
Diane G.
CA · Member since 2016 · 1k+ posts · 1k+ votes
6y
@Shane Craig
Have 3 condo in A locations in San Francisco w A tenants for 10 years without a single repair that is over $1000....
Then City hit w a mandatory retrofit requirement.... 1 condo turned out to be $62K, another $35K, and another $27K.... that is $124K
Later that same year, did a tenant buyout for $62K.... there you go, $186K all in one year ....
Luckily I was laid off from my job that year and severance covered all that expences....I would otherwise not be able to afford all those expenses
2 Reply
Leslie Boudwin
Rental Property Investor · Dickinson, TX · Member since 2017 · 4 posts · 1 vote
6y
@Shane Craig
This business isn’t passive as far as I’m concerned. There’s a lot of mis-information and down right uninformed guidance out there about the passivity of income producing real estate. The term passive income is from the US tax code and in no way related to how you derive income or earnings from RE. If someone entered into the business with a passive attitude, its understandable why the lows are really low and the outlook is bleak. This activity is not passive. Your planning and management capabilities will determine how much work it will take to achieve your goals.
There is no substitute for thorough due diligence, thorough tenant screening, a solid lease and healthy reserves.
Know this, systems/components will fail, tenants will do crazy things but after doing your homework and planning with a winning attitude you will achieve your objectives.
0 Reply
Lawrence S Moss
Member since 2019 · 9 posts · 0 votes
6y
Clayton moss
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