Well…. Let’s just say it this way, as nice as it is to be a landlord or landlady, if you do the bureaucracy and paperwork involved yourself, it is a LOT of work and hassle! And if you get a realtor to do the renting out, evicting, repairs, and advertising, it will cost you. My husband and I finally found a company that did all the work for us for 8% of our rental income. This has proven to be the best deal for us, and we were very satisfied. But before that, we had to cope with several downfalls ourselves.
You think when you own a property and are able to rent it out, you get a monthly income you can live off comfortably. That is not always so. First come the taxes. My husband and I each had a rental home, because we both owned a house when we got married. Since I moved in with my husband, I rented out my home. Because I was not a senior when I bought it (I was a Master’s student in my 30s), and due to the area and school district my house was in, my property taxes were over USD 4,000 a year. A friend of mine with almost an identical house, who lived in the same street but was a senior, paid about USD 2,000 for her house in property taxes. In a way, I found this unfair: who the heck thinks retired professors who owned houses before have less money than grad students who are first-time home owners? It’s nice that you protect seniors, but it’s discriminating towards those who need help most. Even while I still lived in my house, I had a student tenant from China living with me, so I had a contribution to my taxes and mortgage payments. And Jielei was the best tenant I ever had; we even bought a puppy together.
I ended up selling my house later, because it had been standing empty for over a year and brought in no money. Still, I have lots of wonderful memories furnishing my first home in the United States, and living happily there for seven years with my two dogs, three cats, and about 100 leopard geckos.
Second come damages due to weather and natural catastrophes (floodings, storms, earthquakes, etc.). My husband’s house had been destroyed in the 2009 storm. It took a year to rebuild it, during which time he lived in a student dorm.
Since the storm, my husband was scared to live in a house with no basement, so a couple of years before we got engaged, he bought one that did have a basement and rented out the one that didn’t. He paid only about USD 2,300 in taxes annually for each of his properties. The home with a basement had a sump pump, but it was flooded twice while I lived there. Once, we had a pipe burst under the kitchen sink, and the water leaked through the basement ceiling. We stood ankle deep in puddles and cleaned it up with towels, doggie pee pads, and fans. The second time, the sump pump had become clogged up and stopped working. After all was cleaned and fixed, we had to remove and replace the laminate we had had put in, so it wouldn’t get moldy. I had painted our basement white, and we used to have two really nice rooms down there, to play ping pong and raise geckos. My husband had allowed me to keep in the basement whatever I wanted 🙂 . But both times, the insurance did not pay for that kind of damage.
Third come the problems with the tenants. We actually both had those. Let’s see what all can go wrong when you have a tenant:
1. The cleaning company that “cleaned out the house”
Before I even got to rent out my first home, the real estate company who had taken over the maintenance thought my house was “dirty” (well, after two dogs, three cats, and 100+ geckos lived in there for almost eight years, there might have been some dust and a slight odor) and hired a cleaning company to “clean out” my house. I don’t know if they didn’t understand English, but they really “cleaned out” the house and threw ALL my furniture away!!! I had planned to rent out the house partly furnished, because I could take only our master bed with me, and the rest didn’t fit into my husband’s little house anymore. So my four blue chairs (which had made it all the way from Germany), my dinner table with chairs, the $2,600 TV wall unit with book shelves, and my new green couch ($600) with a green ottoman and chair ($200) bought the year before for the prospective tenants landed on the trash, too….. (we assume someone just took them and claimed they were thrown out).
The rental company was giving me a refund for some new stuff I still had receipts for, but they were quite mad at the cleaning company (who hopefully had good insurance!!). They also took out a threshold I had installed the fall before when I got the new laminate floor, because one room had an inch higher level than the other…. they bent it and threw it on the front porch. Why would anyone do that…. At least, we found a tenant soon – now that it was all “clean”…
2. The tenant who claimed she got asthma
The first tenant in my house was a lady named Lisa. For some reason, she wanted out of the rental contract before her time was over. The real estate company who maintained my house for me didn’t let her, unless she paid the money she owed for the contractual time, of course. That must have angered her, because she suddenly claimed she had gotten asthma in my house (I had lived there for almost a decade and did not get asthma) because it was moldy. She wrote a letter to the city, saying I would endanger the lives of my tenants and needed to make the crawlspace dry by installing a sump pump. She threatened with the court. She did move out, but the city made me install that sump pump for USD 5,000. That was money I did not have, so I had to forego my rental income for as long as it took to pay that off. My wonderful real estate company advanced it for me. The other houses in my street (mine was the second on top of a hill, and the water flows downhill) had the same kind of crawlspaces, and also didn’t have sump pumps. I feel like this was revenge only. At least, the house sold better with a nice, dry crawlspace.
3. The criminal who didn’t pay rent
When my then boyfriend had moved into his house with a basement, he desperately tried to find a tenant for his house that had been restored after the storm. Once, he almost had a nice, young couple to rent it, but at the last minute, when the contract had already been drafted, they got out of the deal, and we never knew why. So I made the big mistake of advertising for his house on craigslist. We should have guessed that nothing good comes of that, but I had just bought an excellent piano from craigslist and thought, why don’t we try it… Well, a guy named Abe contacted us and was interested in renting it. He would bring his 18-year-old daughter and his 22-year-old girlfriend (he himself was older; looked spent and wrinkly, but was actually in his late 30s). He was a stand-up comedian (and we saw a couple of YouTube videos, but they were rather boring and very vulgar) and a good talker, so my boyfriend ended up taking him in as a tenant.
Since my boyfriend was depressed, which caused him not always to open his mail on time until a big pile had accumulated on the kitchen table, he did not notice that Abe and his consort had not paid the rent for two months. If he had checked his mail, he would have found the bounced checks. Once he did noticed them, Abe came with different excuses why he didn’t have the money yet: his mother had a heart attack and was in the hospital, his former landlord had cancer and had not given him his deposit back yet, his girlfriend’s account was locked due to identity theft, it was in the mail but somehow never arrived, etc. etc. etc. Of course, we grew suspicious and looked the tenant up on the Internet. Since there isn’t really much data protection in the U.S., we were able to find out that he had been evicted several times before and had had many convictions; even his 18-year-old daughter already had a felony. My husband became really scared and feared retaliation, should he himself evict the unreliable tenant. Thus, we went to a real estate company to sign over his house to them for maintenance. They set an ultimatum by which the tenant either had to pay or leave the premises. They told us later that they already knew him; in fact, they had evicted him from his previous place, before he rented my boyfriend’s house!!
After the rental company had served Abe (he was just a little bit unruly, but ended up leaving), he had a week to pick up his stuff, but he never came. He left the house in a terrible state. Turned out that heat and water had been shut off by the city long ago, because he had not paid them. The poor girls must have lived there in impossible circumstances. We heard from the neighbors that he might have sold drugs on the property, because there had been strange visitors and not a good vibe around them. The house was a mess. The oven was totally crusted and dirty. Abe had had a cat and a snake, and one of them must have had fleas, because the whole carpet was full of them! They jumped up my legs when I steam vacuum cleaned the place. I finally had to have Terminix come to get rid of the fleas. They fumed out the house, and nobody could enter it for a week. There were mattresses on the floor (the three inhabitants had not possessed beds) that were completely soaked and dirty. We put them on the curbside, with lots of other stuff that was too damaged to sell, and they went with the next trash collection.
When after a week, the things had not been picked up (I later heard from a friend of Abe’s that he had had no money to organize a truck to pick up his stuff), my good buddy John the Mason (a plane builder) came with his long trailer, and we carried everything that was left to Doerr’s Auction Sales in Vergennes (there were a little cupboard, a pair of boots, a toy shark, and some other household items). The proceeds from this auction were $35 🙂
Can you imagine the whole household of this dude being worth only $35? That’s tough. He owed my boyfriend more than $3,000. We never saw those again. I heard from said friend that Abe had left, probably for Georgia. We did not sue his girlfriend (who had co-signed the lease), because she had been punished enough; she lost her guy and was probably out of her money, too. And she was still a student (of social work, go figure. Maybe she had tried to save this scam artist.).
We vowed never to take in a tenant ourselves again; everything would be in the hands of the rental properties manager, from now on.
4. The tenant who caused a little grease fire
The worst is yet to come…
After my husband had died, I lived in Tennessee with our son and had our home in Southern Illinois rented out. There was a student living in our house at that time. The real estate company who was taking care of my house for me sent me the following email:
“Hi, a little bad news last night. The tenant had a grease fire on the stove and it ruined the kitchen and caused smoke damage through the house.”
I thought, a “little bad” meant not too bad. After all, what can happen if you burn a little grease in a pan, right? Probably the wall was a bit dark with soot, and the stove top needed replaced. I had a small fire in my toaster once, too, and nothing really happened (just trashed the toaster). Then, I got the pictures and the following text:
“Kitchen is a total loss. It will probably be months until the house is ready to re-rent. Hopefully the insurance will cover loss of income because it is a rental. The tenant did not have any rental insurance, which we highly recommend just for these occasions. That would have taken care of their belongings.”
In short, the tenant lost everything. The tenant also vanished and didn’t pay me anything for the damage caused; I did not even get an, “I’m sorry.” Hey woman, you just burned down the house of a widow with a baby because you were on your damned cell phone in another room while your food was cooking on my stove! Luckily, I had a great insurance with State Farm, and they not only paid more than USD 29,000 for remodeling my house (not just the kitchen; other rooms had smoke damage and carpet damage, too), but also the lost rental income for the year it had to stay vacant. It took a long time until all this was sorted out with the mortgage lender, the insurance, and the contractor and workers, but finally, the house was restored to even better than pre-fire shape.
5. The tenant who didn’t pay rent during Corona
In the house that had been remodeled after the fire, I had a new tenant who lost his job during the Covid-19 pandemic. As understanding and sorry I am about this, his government allowed him to stay in my house without paying the rent for months (according to the moratorium), so since September 2020, I did not see any rental income, but had to pay the mortgage. How the heck is a landlord or landlady who is not a big corporation going to afford the mortgage payments if the tenants don’t pay up? The government did not forgive the mortgage, and neither did the mortgage lender allow a forbearance; I was threatened with foreclosure. There’s legal aid available in Illinois for housing issues (both for tenants and landlords), but since I live abroad now, nothing seemed to apply to me. Thus, I had to take what little wages I had as a primary school teacher and pay my own rent plus the mortgage of a house overseas. In January 2021, the tenant finally got into his hooves and paid off some debt, but I had to lower my monthly asking price by $100 for him to stay in the house. And during the pandemic and in that region, it is impossible to find a new tenant who can afford a higher rent any time soon. This meant, my mortgage was now higher than my rental income, so this house was a burden rather than a source of second income. Come on, guy. You got yourself a brand new kitchen there 😉
To sum it all up, I loved all our houses, and I have fond memories of each of them, but being a landlady definitely does not make you rich, especially not during a pandemic; you’re lucky if you break even, at least as long as you have mortgages on your properties. Once they’re paid off, you hopefully have enough profit to outweigh the repairs – and don’t forget a good insurance, because….. shit happens!