Being a landlord seems like it is an easy job that does not require much work. You just have to buy the property and then rent it out. And the job does compromise of doing just that, to everyone who is not a landlord. Once you are in this business you realize that there is a lot that goes in the background. Moreover, just like you can lose money in any business you can lose money by being a landlord as well. It is not all-money-and-no-work situation. Following are some of the Landlord disasters that can you a hint about all the troubles that landlords have to face and lessons you can learn from them in case you are thinking about becoming one in the future;
– Hiring the Right Property Manager
When Brad and Linda shifted to Arizona for employment reasons, they hired the property management recommended by their two friends for their current property as they did not want to sell it. At that time, it was a local, family-owned company. The first two renters were good and did not cause any major problems. Right after the second renters left, the company got acquired by some corporate firm.
Trouble started when the third set of renters arrived. They had huge dogs which they kept locked in just one room of the home. When they finally left, the built-in cabinets had their glasses missing, the carpet was gone as well, but they somehow left the carpet pad which was soaked with dog urine. The new property management, now under the supervision of the firm, wanted to return only some portion of their security and even after the renters had come and seen the damage themselves, Brad and Linda still had to fight their way to convince the firm from returning the deposit.
This teaches us that no matter how good your property is or even the renters if you do not have the right property manager your money can go down the drain. Property managers are the gatekeepers to your house and investment and if their intentions are not to the best of your concerns, you can face a lot of problems.
– Having Reserves
As their family started growing, Reese and Peter started looking for a bigger house and decided to rent out the smaller one. They were quick to find a tenant and everything was going fine until 3 months later, things started breaking out. First the water heater and then the furnace. Both times the repairs had to be urgent and expensive as the couple had to hire someone because they did not know how to fix them. Reese and Peter decided they would not renew the lease at the end of the lease year and just sell the house.
The lesson learned from Reese and Peter’s story is that there is no way you can stop things from breaking, no matter how new or string they are. So it is better to have reserves because otherwise things breaking might break you as well.