Hello Everyone-
It's been a while since I've gotten this condo secured and rented, finally! Here's the link to my analysis:
It started out as an adventure to secure at least 1 property to get my feet wet. Honestly I’ve been extremely busy with life and haven't been able to post about the condo!
I met my realtor at a REIA meeting in Houston. Thinking about the population growth of Houston, not really finding any Galveston properties, I was sent this deal by my realtor within a day after providing her my criteria. It was ready to go (turnkey), reasonably priced, in a great location of Houston, etc. I made an offer based on her walk through; somehow I just trusted her immediately. Maybe it was the East Texas thing as I grew up there in the same area she was from. My offer was accepted immediately for $2,000 less than asking price. It needed a refrigerator and potentially some minor repairs. Otherwise it was turnkey. I closed in late July. The closing took 5 hours due to mistakes and computer glitches. That's a really long time to sit. The keys could not be released until checks cleared, etc. I was not that impressed that day with my services..but I guess I'm used to the island's (Galveston) slow pace and thought Houston would move a little faster.
Now comes getting a renter in there. The keys were a fiasco. We didn’t have all of the keys, including the walk through gate key.No one could access the property to show it. It was 2 weeks before showings started. I had it listed at $1650 in August. It’s approaching September and we had no takers, only tire kickers. I was self-managing this property to get experience. I posted my questions as to why it’s not getting rented on BP. The responses from commenters stated that I could lower the price and that so many condos in the same neighborhood were on the market. Both of these were true. I had plenty of holding costs and wanted the highest possible rent. I continued to lower it week by week until I reached $1350.My tenant finally came just after October debt service was due. Below are the specifics:
HOA: 336
Mortgage (PITI): 625
Total: 961
Holding costs (electric): 150
Total including holding cost: 1111
My realtor charged my deposit for finding a renter: 1350
I had 1 month of mortgage and HOA fees for September in addition to the closing costs, which included the first month (August).
October was a break even month because my tenant moved in near the beginning!
Renter: I was looking for my tenant and he was looking for me. I believe he will stay in this condo for a while. His daughter is 11 years old and going to excellent schools. He stayed at the last place 3 years and was on his job for 6 years, making well over 3 times the rent!
Next: I’m off to search for another property as a primary. I think I found one with a second guest house and not a garage apartment. Thinking about doing a bed and breakfast type situation on this one out of the main house! I’m going to try to rent my current home out as rooms, furnished, either month to month or on Airbnb. I lose escrow and owner occupied status in March. I live by the coast and multiple universities.
Lessons Learned: I needed to get realistic about the time of year I was searching for a renter. It could’ve easily rented in July for $1600/mo. That’s the sad part. At least it still cash flows, and I had a safety net to still cash flow at the reduced price. Truthfully, it doesn’t need too much in the way of repairs.
I already had a leak fixed, which took my cash flow that month of October. I am concerned that the HOA management company is dragging their feet on a ceiling leak since October, when we first started calling. My tenant is great but a little too passive. If I wasn't checking on the leak in the ceiling, he wouldn't tell me that no one came to address it yet. I already called my insurance agent to see what I'm in for should I have to make a claim on my insurance for damages. I have kept all of my documentation about the calls. I even let the HOA know I was struggling with their management company. I asked what they want me to do and who I can contact at the HOA about this. One thing about me is that I don't give up and I'm persistent. All of this happened while I was out of state for an emergency mission with my job. I had my proxy in place to handle this leak. On this mission, I was pretty much unavailable and worked 7 days a week/ 12 hours a day. This is where I am with the condo. Great tenant but headache of a management company!
