Landlord Confessions

Okay, I have a confession.  I've decided to come out of the closet and just say it.  Ken and I are landlords.  Yes, we have rental property.  In fact, we have a few - not a lot, just a few.  Why haven't I mentioned this in the past, when speaking of our recent financial struggles?  I guess because whenever I mention that Ken and I have rentals, I feel discriminated against.  It seems that as soon as the word "landlord" is mentioned, an assumption is made about us that just isn't true.  What's the assumption that I hate so much?  We're rich!  We don't need money!  Believe me, I wish such an assumption were true!  However, it's far from the reality.

During the past few years we've had several people ask us for a loan, many others that expected Ken to do construction work for them for almost nothing, and tenants that figured it was no big deal if they didn't pay their rent!

So,  I wanted to share this bit of information with our followers for two reasons.  The first is that Ken and I want to inspire others to live their dreams, and we want to give an accurate account of how we will manage to retire before the age of 50 and live on a sailboat.  The second reason is that I want to bring awareness to people that being a landlord isn't a piece of cake and doesn't automatically make one rich.  In fact, the past year or two we've been in landlord hell!


What I failed to mention in our blog is what we've been going through with our rentals while trying to work, renovate our own home for resale, and get our sailboat ready for cruising.  In just the past five months, we've had three of our four tenants move out without notice, and without paying their rent that month!  Not to mention that two of those three tenants left a lot of damage to the home - much more than their deposit. 


The past few months have been one struggle after another.  As soon as we'd repaint a house and repair all the damage, another house would be left vacant and damaged.  The latest occurred just this past weekend.  The house was brand new when our tenant moved in three years ago, so imagine our dismay when we walked into a home with holes in the walls, door frames chewed up by dogs that weren't supposed to be there, and carpet so stained and disgusting that there's no cleaning it.  I swear I wanted to run away!

Even worse, and what so many people don't seem to think of, is that we have mortgages on these rentals.  With taxes and homeowner's insurance going up every time we turn around, we break even every month that rent is collected and there is no damage.  With everything happening lately, we're having to use our own money to fix all the damage.  With our own income not so great, we're tapped out! 

Fortunately, Ken is a contractor and can fix a lot of the damage himself.  However, it's still not cheap.  We've wasted no time when we've been "screwed" by our tenants, and we quickly rented the past two vacated homes.  However, we had to charge less rent than the previous tenant in order to get the home rented quickly and accomodate the weak economy.  We're working on getting the current vacant home repaired and are keeping our fingers crossed that it's rented soon.  This particular home has a mortgage that's larger than the rent we can collect!

I know I'm venting, but have I mentioned lately that WE CAN'T WAIT to get out of here!  Ken and I are so disgusted with today's society.  So many people think nothing of not paying their bills, being dishonest and thinking only of their next immediate gratification.  If we just get our own home sold, then we can pay off our debt, pay off some (not all) of the rental mortgages, and start to prepare our sailboat for cruising.  We can then also focus on selling the larger rental, which would enable us to pay off the other mortgages. 

Our original plan was to cruise with the income from our rentals, but they've been such a headache the past few years that we're now thinking of selling all of them!  We'd try to sell the vacant one right now, but we can't afford to pay the mortgage for a few months while trying. We want to be free from all possessions, and hopefully we'll figure out by then how to make our money work for us.  We're hoping to cruise off of only $1800 a month, but we're not sure how much money we'd need to make that much interest.  Any ideas?

Oh, and one of the last tenant's response to me when I told him he was really putting us in a bind by giving us no notice and no rent .... "Well, I heard ya'll were going cruising soon anyway."  Oh, it was a good thing he was on the phone and not standing in front of me!  I told Ken that he is no longer allowed to tell anybody that we do business with about our cruising plans.  Just like being a landlord, being a cruiser in the near future causes a lot of misconceptions.

So, if you're considering becoming a landlord be aware that it's not always a bed of roses.  While it can be a great investment, it requires a lot of work and you need to be prepared for things to go wrong.  With the economy the way it's been lately, it is just becoming harder and harder to cover the costs and find decent, responsible people. 

So, now you know why we haven't sailed so much the past year and why we haven't done much to Nirvana since her haul-out.  I've been trying to keep this blog positive, but it will be a good feeling when we put a "For Sale" sign in our front yard, and an even better one when we're signing the sales papers!  Yesterday I posted this on our Facebook page:  You have to climb a mountain before you can enjoy the view.  Boy, we oughta have a really awesome view!

Hasta luego ... until then.  Mid-Life Cruising!