This is part of an ongoing series about how I became the owner of a rental property in Florida while living in Utah, and all the adventures I have had along the way. This story started in late 2008 and is still unfinished. If you’re just joining me now, you can check out the first installments here:
- Life As A Landlord – The Beginning
- Life As A Landlord – The Approval Process
- Life As A Landlord – Down Payment And Closing
- Life As A Landlord – Loose Ends
- Life As A Landlord – Classic Problems
- Life As A Landlord – Where is the rent!?
- Life As A Landlord – Eviction
- Life As A Landlord – Where We Stand
I am not a finance professional, an investment banker or anything in between and nowhere on this site do I claim to be. I’m a personal finance blogger. I write about my own experiences maneuvering the financial world. This story has been one of those experiences that I felt I needed to share.
If I was a finance professional you would have never heard about my experience with the rental property because frankly it’s pretty embarrassing. I made a lot of stupid mistakes and did a lot of things the wrong way but I write about my mistakes and experiences so others can learn from them and avoid making the same mistakes I made.
Here are some lessons I learned
Take everything seriously
When I started all this, I figured if it happens it happens and if not, oh well. I didn’t want to stress about it, but all I was thinking about was the beginning – qualifying and actually closing on the house. I never considered what kind of things could happen as a landlord and what life would be like having to cover two mortgages. The stress of not having rent come through has been more than enough to make up for not stressing about the qualification process and my carefree attitude came back to bite me because I didn’t pay close enough attention to documents I was signing and didn’t take the time to verify things I didn’t understand.
Word are just words. Get everything in writing!
I’ve heard this before, and heck, I’ve even said it myself but I try and see the good in people and trust what they tell me. Don’t do that. Even if the person telling you whatever is telling the truth, their boss may have other plans. Unless there is a contract, anything and everything can change in an instant. Because I didn’t get things in writing, I walked away from $5,000 and thought I would have a government subsidized tenant for life which was never the case.
Take control of our life
While I may be hundreds of miles away from my property, I have more control over things than I thought. I left way too much up to the management company, and honestly, the fees I pay them are not enough for them to care about what happens to me or my property. Since the eviction, I’ve actually taken a more hands on approach with the cleanup of the property and in doing so, found out that the management company padded the estimates they got for cleanup crews.
No matter what people tell you, you have to look out for yourself and take control of your life.
Don’t let things unravel in the first place
I took some time to tie up loose ends during my deal, but I should never have let them untangle at all. I left too many things up to chance because I was afraid of looking stupid by asking more questions. I was fooling myself, thinking that at age 22 I really had a clue about real estate investing, and it cost me. I should have been on top of things at every step of the way, calling the management company, the investment company and even the bank when deadlines weren’t met and things didn’t happen the way I was told they would happen. If I had done that, I could have saved myself from a lot of worry and stress and possibly avoided some of the costs I have incurred.
The one thing that has kept me mostly sane during my life as a landlord has been my plan for a long-term investment. Even though I took a carefree approach initially, the one thing I decided on is that if I did end up with a house, I would be holding it for at least five years if not ten. I didn’t think the house would be vacant any of that time, but that’s beside the point. I planned to buy the place, hold it until the market picked up again, and then decide on whether I would sell it or not. Since then, I’ve thought more about my long term plans and decided that unless the market really took off again, I’d just keep the house indefinitely. My long term plans are to have passive income supplement savings during retirement, and a mortgage-free rental property would be a great fit there.
Would I do it all again? If nothing else, this was a huge learning experience and really helped me grow. I’d do again but would do things a bit differently given the chance.
This story is far from being over and I will continue to update the series as new pages unfold.
Image by pareeerica