First House Hack: 1 Year Recap

In my previous post, I discussed 7 key lessons learned during our first house hack. I wanted to do a look back on our first full year of owning our first property/house hack and share some of the things I am proud of that my wife and I accomplished, and some of the things I wish we would have done better.

The Good

1. As best we could, we created a community environment in our complex. We tried to encourage tenants to say hi to one another and ensure everyone felt safe and happy to be living there. To help this, we did improvements to the landscaping, painted the exterior doors, which hadn't been painted in over 20 years, cleaned up the stairwells and added new carpet, and brought little treats to our tenants every now and then. We have very good relationships with each of them now and they respect and appreciate us. This has also been great for them communicating with us when something is broken or needs to get fixed.

2. We were able to get all of the tenants on Cozy after about 8 months. This has been a game changer for us, as previously they were all paying by check or cash. We also taught them how to use Cozy for maintenance requests, which has been nice.

3. We implemented new systems and processes to improve turnover, and educate our tenants upon moving in. This has made everything much easier and allowed us to improve our relationships with our tenants so they know when to contact us and for what.

4. We built relationships with nearby neighbors who are also investors/house hackers, and they have helped us when we are away and also are great to talk to for referrals for contractors, etc...

5. We have everything being tracked efficiently through Stessa, Mint, and Google sheets, and also have built out our net worth tracker so that it is very easy for us to update all of our trackers in less than one hour at the end of the month.

6. We decided not to end the leases of the tenants we inherited who were below market. Even though we could ask them to leave and rehab the units to increase the income by $500 a unit, we realized they are great tenants that always pay on time and rarely complain. We decided it was more efficient to keep them in place and raise the rents modestly over time until they decide to move out.

The Bad (but learned from!)

1. We did not prepare well enough for the winter our first time around and had some pipes burst and a furnace go out. We made sure this year that all doors and windows are better insulated, and heat sources were added to areas that have no heat. We also did routine maintenance on the furnaces and water heaters, and asked our tenants to make sure their heat was working.

2. We allowed someone to rent out one of our apartments to then run an AirBnB arbitrage in the unit. It sounded good initially, but incidents started occurring that made us realize it was not a good situation. Our tenants were not very happy about random people coming into the building, the AirBnB guests treated the apartment and the building poorly, there were parties thrown that disturbed our tenants and neighbors, etc... We decided it was best to terminate this arrangement, and our tenants were much happier and we found great new tenants to replace them. If you are considering running an AirBnB or leasing to someone who wants to do AirBnB, make sure you have plenty of precautions in place to ensure any and all damages are repaired at the cost of the tenant, and also that you have a way to get out of the arrangement if it is found incompatible.

3. We had a tenant who did not fully read through our welcome packet, and decided to use our Google voice phone to text and call us frequently about a personal issue. We had to re-send the orientation packet, but also called out some important details in the email. We decided to start doing this up front with new tenants to ensure they are aware of our hours of operation and communication preferences via email, in addition to the orientation packet.

4. We knew that the roof was not in good shape when we moved in, but we put off repairing it early on because we thought it would last. We ended up having some leak issues earlier this year, which thankfully did not cause significant damage, but could have been a lot worse. We replaced the roof this summer, which although expensive, should last us for at least another 10-15 years. I would encourage people not to take risks on items like this that could cause serious damage to your property or tenants if not addressed.

There has been a lot that we have gone through over the past year, but it was definitely worth it. We continue to improve, and are thankful to have made a positive impact on the tenants of the property and the community, while also helping improve our financial position. Things are definitely not all sunshine and roses, but in the long run we know it will all be completely worth it.