When I originally started this blog I had just purchased my home & the rehab was part of my story then.
Quick recap: In Sept ’13 I moved 1300 miles away from home for a new job & why the fuck not life wasn’t happening where I was. Lived in the family condo while things got sorted with selling my townhome back north & regrouped financially. BUT I hated feeling like a mooch so I started my house hunt the summer of 2014 like a crazed person who desperately needs a hobby (and friends). Thanks to all my HGTV watching I felt pretty good looking at foreclosures & figuring out what was within my grasp or completely unrealistic for me to take on. I have absolutely no skills whatsoever, but I had cash (cash is king!) & thanks my job (I work in the building field) I had connections to hire contractors to do what I wanted. I closed on the house in January ’15 & started the work. Honestly it was a pretty good foreclosure that needed only minimal repairs or things done. I moved in May, but a year later decided I didn’t care to live in the area the house was in (not bad reasons, just not where my friends & activities were) & decided to rent it rather than sell at the time cause I had no idea what my long term plans were. I hired a property manager (PM), got an annual renter the end of summer & welcome to being a slumlord!
My adventures in being a slumlord have been pretty minimal. I pay for the weekly pool care & lawn maintenance as part of it. I did that because it was all new pool equipment & I want the stuff cared for properly. Also I didn’t want to be THAT house on the block with the shitty unmowed lawn that the neighbors complain about. The renters go thru my PM for anything so I don’t have contact with them, but I handle everything for the house when something happens cause I want to use my contractors & know what is going on. There hasn’t really been anything major financially since it was all pretty much new when I moved out. The same renters have recently signed their 3rd annual lease. They pay on time, they only call for serious issues (not every petty little thing) & are easy to deal with it seems. Basically the PM gets to keep 10% a month for doing nothing. Which got me thinking later on why the fuck am I paying her??
I contacted the PM early this summer before we all re-signed the contract that I wanted to get inside the house for a walk thru. It came to my attention from several friends that rent they have a walk thru every 6 or 12 months with their property management. I was like wtf? Nobody has been inside my house in 3 years! I have no clue what the renters are doing in there & I have heard some horror stories of damage. When I walked thru the end of June with the PM, I brought Ken with to get his feedback. He was never to the house so it was a fresh set of eyes. The house isn’t in bad shape. Some wear & tear that you’d expect after 4 years. But it’s outdated especially the kitchen & bathrooms. The appliances & roof were all new when I fixed it up. I ripped out all the landscaping so it’s pretty minimal outside the home, but it’s easy keeping.
My original plan was to keep the house rented until summer of 2021 & then not renew the lease (it ends July 31st) so I could remodel to sell it. I like having the house right now cause it IS making me some money after it pays it’s way which I use to pay down extra on my car (that should be paid off early the end of 2020 if all continues to go well financially). But after the walk thru I was like hmmm… & started thinking.
The 1st thought being why am I paying the PM still when I do everything? Granted I wanted it set up that way initially to find renters or if there was an issue to handle them, but I got a list of shit to fix after the walk thru & she scooted off free willy when we were done. I was also pissed that after 3 years some of this shit to be fixed was just being brought to my attention NOW when I should have been told like oh I don’t know a year or 2 ago when it started. The renters are easy enough I think I can handle them directly. I got my hands on the PM contract I signed with her & apparently I will have to pay 80% of her monthly fee for the remainder of the contract to terminate it early. Which just started August 1st. Fabulous. Glad I had this realization 2 months too late. FML. I’d save about $40 a month paying her off early, but I don’t have that much cash on hand right now to use for that.
My 2nd thought was again using my job experience & HGTV watching I was probably going to spend at least $20K to do a basic remodel on the kitchen, 2 bathrooms & probably a new pool cage just so I can sell it. Why invest all that money when I won’t be using it & I don’t know how much of a difference it would make in the final selling price? Am I investing $25K to only get $15k more when I sell?? Not to mention I don’t have that cash flow sitting around either right now. Plus the house would be sitting empty starting in August making me NO money while it gets remodeled & then going on the market until it sells. This sounds like a lose lose to me!
Soooo my new game plan is later this fall I will contact the realtor who sold me the house (we’re still in touch) & pick her brain. My idea is to list the house for sale as is with the renters starting in January & give it to end of April to sell. I will price it fairly for what it is, but I am no hurry to sell or need to dump it. See what happens. IF it sells I will pay the PM out of her contract whatever amount is left, pay the rest of my car off & take the remaining money to the bank. Yes I will no longer be making on paper the amount of money annually with my rental, but I will have NO bills expect for my housing which is what I pay to be a roommate monthly (peanuts in the grand scheme). I can really start rebuilding financially at that point. Obviously that is the BEST scenario that could happen. Now come April if it doesn’t sell, I’ll take it off the market & let it sit. See how much cash I have & perhaps I’ll be able to terminate the PM at that time. Hopefully it won’t freak my renters out so much they decide to leave when the lease is up the end of July as I will definitely be taking over the official slumlord title August 1st. I think if I am very clear & upfront with them it will be ok.
I am feeling pretty good about this. I have been tossing it around the last week or 2. I’ll miss that house. The project was fun & I see so many projects I would love to do, but doing the walk thru in June really finalized in my head that I won’t live there again. Love the house. Unfortunately it’s not the area I want to live. Even my dad said that to me last month. Continuing to invest in improvements seems silly at this point & I need to get out before I start having REALLY big costs when the stuff needs to be replaced or the pool needs an overhaul. I think I just had to reach a point in my life where I was ready to close that chapter & now I have. It’s time for me to move on.