Update: An old couple in difficulty and cannot pay rent

[Jo Zhou]

Hi, guys, I am very appreciated that so many of you are there to give me advise and recommendations and express your thoughts, your feeling. I deeply appreciated there was a community like this exists, so we could share stories and experience.

I would like to give you an update and you may be interested in. The old couple kept their promises and moved out on April 2, some government agency did come to pick them up. If the story stopped here, they are really nice couple. However, if you saw what they left, you may lose all your sympathy. And even worse, after I talked to the neighbor, you may start getting mad.

The old couples were picked up and left a full house of their belongings in there. My PM called 2 dumpsters to remove the stuff, the handyman is still working on moving stuff. The garbage is everywhere.  The full floor was covered by the dog poops and pees. All the closet doors were painted with artist drawings. The room doors were punched holes, and so on with the garage doors.  The bathroom cannot speak of. All the lawns were dead, the trees and bushes were cut down... I mean, were they allowed to do that? At the first, I wondered why the old couple could do such a demolition. After talking to the neighbor, he told me that at least 3 more people (not the old couple) lived in the house. The other three were the daughter and daughter in law and their son. They planted marijuana in the back yard, this is the one that really made me lose all the sympathy. Now I am thinking if I should go to a small court to claim some of the damage.?

I almost have to replace everything. My PM suggested vinyl plank for the floor. Including removing all the existing floor, install the new baseboard, for 1400 sqfts are around $10,000, is it reasonable price?  Painting the whole house is $1200 plus paint.  Other estimates are on the way.

Lots of people here recommend other types of real estate investing, really appreciated, please give me some head starts, where and how I could start. Dealing the tenants is not fun, I didn't have any problem in the past, now it starts revealing. In the beginning, I decided not to deal with some kind of people, so I only buy into nice family oriented neighborhood, just hopefully we will not get into this, but it still. Some people decided to live in a pig style environment. My PM try to comforted me that this was 20 years she saw it the first time, which mean it won't happen a lot. Is it true? One thing I learned is that I asked PM to inspect all the units once a year.

Also, how to prevent people who are not on the lease live in the property permanently? My PM said that it was very hard to prove it is short stay or permanently. The only choice is If we start suspecting, we will not renew the lease. 

The whole story is ended with no eviction, Good, but full whole renovation, Bad.

[Daniel P Willis]

@Jo Zhou

If this were my property, the first person i would question would be my PM. I have a property that is almost 3k miles away but i have an excellent PM who also inspect twice a year and requires that they have renters insurance. I just found out that one of the ladies in my SFH is starting to horde a lot of things, at this time its not damaging but never the less she let her know that if she wants to continue to be there she will need to get things cleaned up, she also followed up with her a week later to find out who she has hired to help her (because she is rather large and out of shape and could not do it on her own) and verified the person was in fact going to help. That being said, I pay my PM to inspect my property twice a year, its not part of the standard services, but i prefer it this way because i feel like they try harder to justify the expense, its only $30-$40 per inspection but i feel its well worth it, as i'm sure you understand why. I would consider looking into a new property manager.

The reason i mention looking into a new property manager is because if they are neglecting something as small as inspections than they might be neglecting other issues such as whether your rent is competitive with the market. I had 3 PM's in the area to look into, I called all 3 and 2 answered the phone right away and the other did not and i had to leave a message. The other two came out very quickly, that day, and looked at my home and both told me that they could rent my SFH out for about $800-$900 and were very nice. I didn't get a call from the 3rd one until late that night and was a little frustrated by how long it took, and i had already made up my mind on who i wanted. My wife however told me to be patient and let her come by, which was a couple days later which i didn't want to wait for, and the experience i had with her made the entire wait worth it. First off i could tell within 15 minutes of meeting her that she was way more knowledgeable than the other two by far, in addition she said that she could rent my property out for about $1,100, possibly more. The result was that she rented the house out for $1295 a month instead of the $1,100 she originally thought. In the first year the tenant wanted a new porch which she negotiated a price increase of $140 upon renewal, totaling $1,435 for the second years rent and got the contract months in advance. This year on renewal she found the inspection issues that i mentioned earlier but has it already taken care of and is working on getting a renewal price of $1,499 because markets have increased.

        My point is, my PM is working so hard for me that i sometimes wonder how she manages to help everyone else just as well. I'm not even close to her biggest client, but i feel like i'm her only client by the way she treats me, i feel like that is something you should be looking for, not a PM that's like "oh sorry about the 20 year pile of destruction your tenant left, don't worry because it doesn't happen often." 

       I hope this has shed a little light on what i look for and has been at least a little helpful, best of luck to you and i hope everything improves, don't give up on your dream!

Dan Willis