Newbie need perspective

[Mia Wallace]

Hello just looking for some advice here. This is a long post. Thank you for reading In advance. I’m in a tough situation and don’t know how to feel about it. After a 4yr journey of leaving a big city, selling my belongings, living frugally and doing tons of overtime, I paid off 70k of debt and saved enough for a down payment on a house as a single person with one income.

I bought my first house house in 2021, a duplex. It was at the height of the crazy market and I felt a little pressured to buy because I put it off in 2020 due to Covid. I bought this house primarily because there was a long term section 8 tenant. At the time, I thought with the moratorium in place, this house was a safer bet and also that I would have no issues raising rent because they were so overwhelmingly covered by section 8. Because of this I overlooked some problems with the house. The house had been neglected for some time, had a wet basement and animal damage in the upstairs unit and a long term smoking tenant in the bottom unit. I didn’t realize the extent of all these problems until I moved into the house, into the upstairs unit. 

The tenant is a 60yr old woman, not employed and her son is 25yrs who works in IT. They had been mostly covered by section 8 for the duration of their tenancy, for 20 years or so, up until about last Dec 2021. They were paying about $150 a month on $750 of rent. When I bought the place last year, I would have been able to raise the rent to $1400, but I didn’t. It’s a 3 br, in a nice neighborhood, but I decided to only charge $1050 last year because I didn’t want to start the relationship off bad and raise it too much out the gate. I projected that in the 2nd yr I could get the unit to market and since they were about 80% covered by section 8, I never thought this would be too much of an increase. So they went from $150 to about $210 a month after $1050 rent took effect last year. After about 4 months of that increased rent, section 8 lessened their support from 80% to 20%, because the son got a raise. So the $210 paid on $1050 jumped to $840 a month.

When I moved into my unit upstairs it smelled horribly of dog, like a frito chip factory. Once I took up the carpet and then the vinyl sticky planks. It revealed urine soaked OSB and the whole unit smelled of urine. Once I got all the OSB up and put Kilz down, the smoke smell was revealed and all I smelled was the smoke from downstairs. It was really strange how one smell completely covered each other smell. I eventually told the tenant (the mother) that she has to smoke outside. She complied but still smokes on porch/patio and the smell wafts back inside and after a lot of additional smoke treatments and costly smoke covering paint, I still smell it upstairs. I had an issue with her throwing butts on the property and I asked her to stop. She mostly complied but I still see a butts on occasion, which I just pick up. This bothers me and I think the smell is lingering a lot, because there’s 20yrs of smoke filled carpeting still in their unit. I also found out after moving in that the tenants have 5 cats. I’m very much not a fan of this. One of the cats roams outside and I’ve had to pick up cat crap, also not a fan of this and I have no pets. The tenants are quiet and decent people. They help with snow removal, will bring my cans in on trash day, help with the landscaping. But the problem is I’ve had to spend a lot of money on this house to deal with things that have been neglected, I’ve had to deal with reno in my unit and other unexpected things that have gone wrong to deal with the water in the basement. It’s been really adding up, I’m probably about 25k in the hole and I need to charge what I projected I can get for the unit, at the very least and hopefully more to offset all the expenses I’ve had and increased taxes and utilities and such.

The tenant is month to month there was no lease in place and I never created one because I wasn't sure about them. Also they have been telling me since I bought the place that they are planning to buy a house, they claim to have 30k for down payment and have taken home buyer classes with section 8. Section 8 helps them buy from what I understand. I have asked them over the last year how that is going and let them know that I need to know what their plans are but they keep waffling back and forth between saying they'll stay and then telling me they're still looking at houses. Over the last year I've felt like I wasn't the one in control of the situation and like I wanted a new slate. I worry about the smoking situation beginning again after costly reno to mitigate the smell upstairs and I worry about what the cats have done to the unit and can continue to do the unit. I've been in there a few times and the tenant is pretty neat but all I smell is smoke so it's hard to tell about cat damage if any. Also my contractor found some water damage behind the wall in my bathroom and said there is some hers too but can't tell full extent of it. I figure her unit will be a gut reno at this point and it will take me a very long time to ROI on this place. I felt all these issues were too much for me address with this tenant and the changes I would need to make would be too great for someone who is used to not living under lease and I can't imagine asking her to get rid of her cats, so I wanted a fresh slate and renovate, get new tenants, I can vet, that can pay market rate, don't smoke or have animals. I feel morally conflicted about it and I don't know if I should. I feel bad because they have been there along time, are nice people, but another part of me says they were looking for house anyway and we're gonna leave me if they found something and I don't really believe that any other buyer, but me would have let a month to month, smoking tenant, with 5 cats, well under market stay as long as I have and I did that because of my inexperience. After a lot of mental gymnastics I decided that it's would be best to end their tenancy. As soon as I told her that I was ending their tenancy she immediately said "but I have 5 cats and no one will give me the deal you're giving me". That for me, is exactly the point.

I’m sorry for long post, I’m just so in my head about this and lose sleep over it. I know I made A LOT of rookie mistakes here and I’m trying to learn and be better. I gave the tenant 4 months notice instead of only 90 days and I told them I would help with a little money if they leave at the end of 4 months to incentivize a smooth departure. I also offered to help in anyway other way I could.

I’m getting older and I’ve been trying to clean up my financial act after being fiscally irresponsible. I’m not wealthy and I make a modest salary. I got into to this to make money and save for retirement, as a single person, without kids, I don’t have anyone to help me or fall back on and I didn’t get into to this to carry others. I guess I’m just looking for perspective and wisdom on this because I’m feeling awful about it. I know I made mistakes in how I handled all this and am trying to grow from these mistakes and be more professional. Thank you for reading, any advice would be greatly appreciated and I wish you all well on your endeavors.