My crash course in being a landlord

[Jake Thompson]

Hi all, just wanted to share some of my issues and mistakes with renting my first (and only) investment property in order to help others. I know most if not all of what I'm going through could have been avoided by being more educated, however at some point you just have to jump in and do that first deal.

I purchased a duplex with a little workshop back in December of 2015. I moved into one of the units and rented out the back to my sister in law and a couple friends (mistake #1: don't rent to family. Ever.) I decided to let the previous tenant from my unit continue renting the workshop for his business without knowing anything about him besides his name and phone number (mistakes 2 and 3 and .... many more: don't let someone use your residential property for commercial uses, do some kind of tenant screening and gather information on your tenants, don't rely on verbal contracts, and don't rent to a guy that hasn't even paid you the rent from your first month of owning the property. In essence, don't be dumb like me.)

Fast forward to June and we can't get this guy in the workshop to contain his mess and keep it from spilling onto the other tenants yard, as well as issues with him bringing over sketchy characters, so we give him notice to move out. We tried to work with him for about 2 and a half months before giving up and filing for eviction. Now almost 4 months since we first asked him to leave he has given us possession of the property but still hasn't removed his garbage from the premises. I told him I'm hauling it away Wednesday if it's not gone and billing him for it.

Now that he's almost gone my sister in law is making some very poor life choices that have warranted cps coming and taking her kids. They're now with my wife and I. She has been spending time with my workshop tenant and I believe learning how to be a professional tenant from him. She decided this month she would wait until the end of her grace period before paying rent. Only problem is today was her last day before being late and tomorrow I have to serve her with a 3 day notice to pay or quit. We have been having issues with her before this, and already told her we won't be renewing her lease, but now she has buried her head in the sand and won't communicate with us.

I have to say this is not how I thought I would start my real estate investment career. And while I could have avoided most if not all of these problems by doing more research ahead of time, I'm going to take these experiences and use them as a learning opportunity. I have no fear of filing an eviction in california now. Been there, done that. I have qualification standards in place now and don't just rent to the first person that comes along, and I especially won't rent to family, whether I think they are responsible or not. I hope I have convinced someone just starting out to avoid these mistakes, but if not, understand that it's all a learning process and you will make mistakes. Just keep learning and growing and don't give up. 

[John Thedford]

Thanks for the post. Sharing learning experience is a great way to help others. I have quite a few learning experiences myself:) I personally am not against renting to family or friends but I make everything clear up front: this is a business and will be run like a business.