Life As A Landlord – Where We Stand Now

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 since closing in early 2009. If you’re just joining me now, you can check out the first installments here:

This story started two years ago and with this installment we are now caught up to the present. We have been without a rent check since December 2010 as we tried to work things out with the tenant and then had to go through the unbelievably long eviction process. Now the tenants are gone and I’d really just like to get this baby back on the market and get a tenant in there.

According to the property management company, there have been several inquiries on the place and the rental market is really picking up as Spring gets into full swing. That’s great news! But we first have to deal with the cleanup of the place to get it rent-ready again.

When the tenants moved out, I let out a sigh of relief. I didn’t realize that people actually trash places, I mean the tenants lived there rent free for months as they worked the system, what possible reason would they have for causing physical damage to the house and more financial damage to me?

Nevertheless, soon after the official eviction I got an email detailing all the damage as well as pictures of the place. I had never actually seen the inside of the house, so that was interesting. It has nice tile floors and good lighting – it really isn’t a bad little house. But overshadowing the little good that I found in the pictures was the damage.

Before even looking at the pictures, I was shocked. In the damage report, here is what I found:

  • The chain link fence needs repair as it looks someone drove a car through part of it.
  • There are half a dozen mattresses in the back yard that will need to be hauled away.
  • The back yard is also full of other misc furniture items including a full entertainment center and a couch.
  • The roof had some damage from general wear.
  • The landscaping needs work as it has been obviously neglected, specifically there are tree branches too close to the roof.

Inside the house, the damage is far worse…

  • All the doors were torn off their hinges and would need to be repaired and rehung.
  • All the blinds were torn down and would need to be replaced.
  • Several of the light globes were missing or broken.
  • The carpet badly needs a cleaning and will possible need to be replaced. (replacement not included in the estimate)
  • The utility room was full of black mold that would need to be thoroughly cleaned – the room would need to be checked for water damage.

Aside from that damage, the house was full of trash. There were more mattresses, a smashed big screen TV, two or three trashed couches and other random stuff including what looked like a rifle of some sort. The walls were all a very dark gray from general neglect as was just about everything in the house.

Out of all the things about the house that I found there was one major thing that I just couldn’t understand and that is the mold. It’s obviously been there for a long time and what I couldn’t understand is why the tenants never let me or the management company know. It’s my responsibility to get things like that fixed. I mean, how can someone live like that?

So this is where we are now. I’ve got a house with lots of crap in it but no tenant. The total estimate of damage to the house is $2,700 and that’s just an estimate. If there does appear to be water damage, I’ll have to get that repaired as well.

What do you think, has this been worth it?

Image by Seattle Municipal Archives

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27 People have left comments on this post

» Kevin @ Thousandaire.comNo Gravatar said: { Apr 6, 2011 - 10:04:01 }

You may need to investigate the management company. Maybe the tenants did complain about the mold and the management company didn’t do anything about it.

Jesse MichelsenNo Gravatar Reply:

That’s a good point and one I’ll be taking up with them. I’m disappointed because they actually want me to pay a quarterly maintenance fee for them to go to the house, check on the tenants and fix little things that can be done in a couple hours. I was already on this plan during this time and if they were actually doing that, they would have noticed some of these problems. I’ll be looking at different management companies in the area as well and see how they compare.

RobbyNo Gravatar Reply:

I’d fire that management company in a heart-beat and sue them for breach of contract, provided you have a contract with them. I’ve heard of some “management” companies that are nothing more than a guy that’s formed a LLC and takes a cut of the rent and does nothing, but feeds you a line. It’s one thing when you can physically show up in their office and raise seven colors of hell, it’s another thing to do it over the phone. I can be 7 feet tall and bullet-proof, and sell water to a well over the phone! Face to face, it’s not that easy…. am I seeing a trip to Florida coming soon?

Jesse MichelsenNo Gravatar Reply:

I’ll be doing some shopping around but you’re absolutely right, being so remote gets complicated. I’ll be heading back east later in the year, maybe I can work in a stop at the place. Until then, I’ll call and give em a stern talking to!

» krantcentsNo Gravatar said: { Apr 6, 2011 - 02:04:14 }

This is an example of how things can go wrong owning income property. Part of the problem is it is not local and part is incompetence. Visiting tenants periodically would remove many of these problems. Someone should stop by to pick up the monthly rental check or for some other excuse. No management company will care as much about he place as an owner. I don’t know how it is done in Florida, but make sure you get a judgment for what is owed to you by the tenant. Then turn it over to a lawyer or collections agency.

Jesse MichelsenNo Gravatar Reply:

Thank you for the advice, I do plan to pursue the debt owed and see what comes of that. You’re right though, it’s impossible for me to keep a close eye on the place from where I am and no matter how much money I pay someone to do it for me, they don’t care as long as they get paid. I pay the management company to visit the tenants, and they weren’t able to spot any of the problems we found after the tenants left. And I know I’m to blame for much of the problems I’ve had as well, I left way too much up in the air and will be more closely monitoring things now. I will be staying on top of the management company and won’t be waiting till something bad happens to know how my tenants and property is doing.

thanks for the advice, I really appreciate it.

» JenNo Gravatar said: { Apr 6, 2011 - 03:04:25 }

A few thoughts that hopefully help you>>

The chain link fence >> Do you need a fence at all? If not, take it out and don’t replace it.

The back yard is also full of other misc furniture items including a full entertainment center and a couch. >> Assuming it is now yours to dispose of put it up for free on Craigslist. Someone will take it.

The carpet badly needs a cleaning and will possible need to be replaced. (replacement not included in the estimate) >> If it needs to be replaced get it tiled with cheap stuff. Get extra to replace missing and damaged tiles in the future. It is easier to repair and can handle a lot more wear and tear.

Jesse MichelsenNo Gravatar Reply:

That’s great thinking. I thought about trying to talk the estimate down, but opting out of things I don’t need is probably a better way to go, if I don’t do both. I don’t think any of the furniture is really salvageable, but it’s worth a shot. As for the carpet, the cleaning wasn’t too expensive, but if it needs replacing, I’ll check out tile and see what it would cost to get done. Thanks again Jen, this is some great info

» JanNo Gravatar said: { Apr 6, 2011 - 05:04:53 }

Agreeing with previous comments… be suspicious of mgmt company. I am a renter and a landlord’s dream tenant but when owner hired a mgmt company, we renters all started getting terrible, illegal, and unethical treatment and made-up fees left and right that we never agreed to, followed by eviction attempts if we refused. I consulted an attorney. I looked up prop. tax records and got owner’s address (out of state, like you) and wrote him a detailed account of my mistreatment. No action was taken. Owner did not call. No doubt, owner called mgmt company who fed the owner a pack of lies. I now see BBB complaints on this mgmt company from tenants AND owners. I plan to sue the mgmt company and possibly the owner as well for doing nothing when illegal fees and retaliatory eviction attempts and lock-out threats were documented. Meantime, I just moved to a new rental run directly by the owner, no middle man, and I made it clear that should a mgmt company ever be hired, I have the right to break the lease if I find them unsatisfactory. As far as failing to report mold etc, unless you contact tenant, you don’t know… maybe they TRIED (like me) to report problems and were ignored.

Jesse MichelsenNo Gravatar Reply:

That’s a good point. I’m unfamiliar with landlord – tenant etiquette, would it be completely wrong of me to call a tenant directly and check on them? I don’t trust the management company and just found out they padded an estimate to fix up the property. It’s not much, but I called them on it and the lady told me “oh, we don’t do that sort of thing” but how does she explain the extra 120$ exactly that was divided into random chunks and applied to the separate (inside+outside repairs) estimates from a single contractor?

I’ll have to do a bit more investigation into this company, I wonder if they have any BBB complaints. I wonder what I can actually do if they have been screwing me and worry that maybe my tenants were treated unfairly too. Thanks for bringing this to my attention.

RobbyNo Gravatar Reply:

BBB stuff is rigged. You can have a perfect rating if you pay them what they want. (I work for a bank. Trust me on this)

I talk to my tenants all the time. The way I look at it, it’s my place, I’m just letting you borrow it. If you don’t like me insuring I’m not losing my pants on my investment, then GTFO.

I beat on the door when they are late with the rent, and I’ve been known to call too. Dont be skerred!

Jesse MichelsenNo Gravatar Reply:

haha thanks Robby, I need a good kick sometimes, I will be much more hands on going forward. I’ll be calling tenants to check on my management company, and vis versa ona regular basis.

» Claire MoylanNo Gravatar said: { Apr 7, 2011 - 12:04:00 }

Uh oh…Black mold will mean you could lose your house insurance not to mention the liability with new renters if they develop respiratory problems. I'd bulldoze by now.

Foundation Repair San AntonioNo Gravatar Reply:

Yeah, black mold is no joke. As a landlord I have had to deal with similar issues with careless renters. It is rough and takes a lot of work. The last rent house issue I had involved a renter leaving a christmas tree plugged in while gone for vacation. The tree caught on fire and burned the living and dining room and caused insane amounts of water damage from extinguishing it.

» Jesse MichelsenNo Gravatar said: { Apr 7, 2011 - 12:04:00 }

eek! That's no good. I'll be getting everything inspected before bulldozing but good to know. Thanks!

» optionsdudeNo Gravatar said: { Apr 6, 2011 - 09:04:34 }

Very interesting story, Jan. Sorry for your troubles but I agree that a “management company” could easily be a guy with an LLC.

As for the question, “Is it worth it?” I would say that it depends upon the length of the mortgage. Is it 30 year or 15 year? How much cash have you put in already? How much more do you anticipate? Those are considerations to make a decision.

Jesse MichelsenNo Gravatar Reply:

I’ve done a little investigation into them and you’ll have to check back tomorrow to see what I found out. I’ll be looking for a replacement to manage my property in the coming weeks.

Thanks for your input dude!

» JanNo Gravatar said: { Apr 7, 2011 - 09:04:10 }

Read your contract. When mgmt company found out I’d written the owner, they told me that wasn’t “permitted” and that I must deal only with them. Contract may also spell out that you are locked into a year with them and can’t fire them without a breach of contract suit from them. Contract should include fees they charge for various services. Do the math. They probably make more money when unit is vacant than when occupied. And they make a LOT when they deliberately piss off good tenants and drive them out early.

Jesse MichelsenNo Gravatar Reply:

That makes sense, if they are screwing you, you aren’t allowed to report that 🙂

kidding aside, I’ll def check over everything again and make sure I know what I can and can’t do.

I don’t actually pay the property management company anything when I don’t have a tenant, but do you mean they make money from the legal fees from eviction (that seemed pretty high, $500)?

RobbyNo Gravatar Reply:

FIVE HUNDRED DOLLARS >[email protected]!?#@?!#[email protected]

Sweet jeeezus that’s crazy!

My whole eviction trip was about 138 bucks or so.

Jesse MichelsenNo Gravatar Reply:

ouch…really $138?…..what the heck did I pay for! This isn’t over..

» JanNo Gravatar said: { Apr 7, 2011 - 10:04:50 }

The prop mgmt company I despise has a PDF in the bowels of their website showing a list of fees to owner. When unit is vacating, they charge owner a moveout fee to cover admin costs of overseeing moveout (when they, in fact, did nothing, including not showing up for the moveout inspection). Then they charge the owner fees for cleaning and prepping the place for the next tenant (when they, in fact, do little to no cleaning or prepwork at all that I can tell from watching them keep the units beside mine vacant for a year). Then they charge the owner monthly fees for advertising and showing the unit. Again, they do little to nothing… the ads are on craigslist (free!), they frequently fail to show up even when prospects want to see the place, so the units beside me were vacant nearly a year while numerous prospects asked around the neighborhood and then rented elsewhere. When they did show the place, they send the newest little minimum wage twerp who knows nothing about the place, cannot answer questions, and is singularly unpleasant in manner. Mgmt company don’t want a tenant. Their cut of rent is way less than the fees they charge owners for “showing” the empty unit. Thus units stay empty and naive owners stay income-less and clueless.

Jesse MichelsenNo Gravatar Reply:

ugh that’s awful! In reading this management companies contract, there were no fees for showing a place or advertising. I just pay a whole months rent to renew a tenant, that’s probably going towards that cost…which is a pretty big chunk of cash. I’d better make sure that contract didn’t have any other hidden fees…

» eemusingsNo Gravatar said: { Apr 9, 2011 - 07:04:46 }

Ugh. Hate that you’ve had to go through this! After all the stories I’ve heard I know I don’t have the stomach for LL-ing – yet property investment is like a cult in NZ. And given that rental agents charge rent plus GST to the tenant as a letting fee, no wonder – the only cost to the LL is the ongoing management fee.

Jesse MichelsenNo Gravatar Reply:

I don’t want to scare anyone away from property investing but wanted to share my real experiences for just this reason, so others like yourself can get a feel for what things can be like before you get into them.

I would be curious to see how laws concerning LL and tenants compare between NZ and the states because that doesn’t seem exactly fair?

» MattNo Gravatar said: { Apr 12, 2011 - 05:04:49 }

Jesse, it sounds like you had tenants that were actually using it as a temp/illegal worker’s flop house. What is really telling is the mattress volume that you have to deal with along with the type of damage you found. Unfortunately you will have a difficult time screening out these people as they often appear to be a normal family of renters (and often are) only they use the place to house/store workers and don’t live in it themselves. Due to the management company issue and your distance/inability to personally interview tenants, you’ll have to be extra vigilant that whomever you rent to will be using this as their primary residence.

Jesse MichelsenNo Gravatar Reply:

Hey Matt, I can see that considering what was left behind. I’ll definitely do the best I can when screening tenants. This will be a first for me since the first tenants were inherited with the place. Thanks for the great advice.

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