For all of you that are landlords, or are thinking about becoming landlords, I’d like to tell you a story about how a property can cost you thousands of dollars in just a few short weeks, and that is without any natural disasters.
We own a house at one of our former duty stations. We haven’t lived there in four years. New tenants have just taken possession of the property, and they brought to our attention quite a list of maintenance that needed to be done. Normally, I would have had this all taken care of before they received the keys, but I didn’t know it needed to be done. The previous tenants hadn’t mentioned it, and my handyman is mostly concerned with fixing things he is asked to fix.
Unfortunately, one of the things they mentioned was concern about mold. Because I can’t be there, I had a home inspector come in and do a completely inspection of the entire house, just like you’d do before buying a house. He was very thorough, and there is no evidence of mold (whoohooo!), but he added even more things to the “probably should be repaired” list.
So, in ten short days, we have ripped out the (old, cheap) laminate flooring on the lower level of the house, and organized to have replacement carpet laid. We’re having the house re-roofed, including new gutters and repairs to the underlying trim and fascia. Things have been painted. And caulked. And grouted. And replaced. And glued. And rewired. And cleaned. And cleaned some more. I won’t be surprised if my handyman gets a Christmas gift from Home Depot.
The best part of the whole process has been something that isn’t: this isn’t going to be a huge financial disaster. It’s not pleasant, but it is part of being a landlord. We keep a substantial amount set aside for repairs. It’ll be all spent, and we’ll have to start building that account back to a safe level.
I share this with you to reinforce that if you are a landlord, you need to have a financial plan for the things that are going to happen. Not only will it keep you from being crazy (and in debt) when your property needs work, but it is also the responsible thing to do for your tenants. You can’t make them wait for a new heating unit because you aren’t sure how you are going to pay for it.
I know it is hard, especially if you really didn’t want to be a landlord in the first place, or if you are receiving less rent than your mortgage payment. However, it will be even harder to pay for stuff if you haven’t figured it out ahead of time. We were very fortunate that nothing serious went wrong in our first five years of landlording, because we weren’t really in a good position to absorb any big expenses.
And I hope none of you ever have two weeks like the ones I’ve just had!