First-Time Landlording – My First Two Weeks

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I’ve wanted to be a landlord since I was 16 years old. I always loved the idea of owning property that would appreciate in value, and I adored the notion of someone else paying off the loans.

“Why wouldn’t everyone want to be a landlord?” – I often thought to myself.

As I grew up, I began to understand both the positives and negatives of becoming a landlord. And now that I am a landlord, I’m beginning to see the pros and cons first hand.

First-Time Landlording – My First Two Weeks

“Going to be a slum-lord huh? Have fun with that when the toilet backs up!” — Clueless Broke-Guy

I thought that I would be the envy of all of my friends. I finally had the ability to buy a rental property and I could conceivably earn money passively from anywhere! I could be taking an all-day nap, watching a baseball game, or playing golf…and still earning money every minute. But, then I started getting comments like the one above from my friends. Instead of feeling proud, I felt like I was back in the network marketing game — hearing the heckling everywhere I went.

For the longest time I couldn’t make sense of it, but today I put it all together.

The heckling comes from critics that never step out of the norm and typically criticize those that do. From their experience, doing something different always ends in failure. If you fail, that means that the system was flawed and their fear of failure is verified. If you succeed, that means they were wrong and could have gotten rich themselves. When this happens (and it often does), they write you off and call you lucky (instead of actually admitting that doing something different can lead to extreme success).

Weighing the benefits of the critics vs. those that take action, I am 100% on board with being a rental homeowner and landlord.

20160501 - first time landlording soffit downSix Days In – The Emergency Text Came

On April 15th, I handed over the keys to three young gentlemen and my landlording journey began. I couldn’t help but wonder where this journey would take me. Would I have to deal with bad plumbing? Trashed houses? Evictions? I was sure there would be future challenges. What I didn’t expect was what came just six days after I handed over those keys!

“Hey Derek. Tried to call you but apparently your voicemail is not set up. Need to talk to you ASAP about the house. Please call me back when you can.”

Crap…..

This was the text I got from my tenant. I tried not to let my imagination run wild with flames coming out of the rental house windows… I stayed calm, finished the meeting I was having at work, and then called back my tenant.

As it turns out, the front eve and soffit fell off the front of the house. Very strange, but thankfully no one was hurt and it was a fairly easy fix. I screwed the eve back up there (I suspect that birds were the culprits since I found nests under the eve), and then closed off all the holes so that it wouldn’t happen again. It took me about 2.5 hours in total, and that included the trip to the hardware store for more soffit. Grand total in dollars….$10.60. Definitely not that big of a deal.

The Positives

Yes, there are downsides to landlording – especially if you’re doing the property management yourself – but there are plenty of positives as well.

When you put in the time and actually hunt out that quality tenant, life becomes super easy. Sure, the soffit might fall off the front of your house, but stuff like that is just going to happen. While going over there to fix it though, you know what else happened?? I looked around the front yard and noticed that they added mulch to the landscaping. And, they were in the middle of edging the grass! These guys are better tenants than I could have ever imagined. It’s going to be a great first year.

Beyond the fact that they’re caring for our rental house like it was their own, there’s also the benefit of the payments that these guys are making every month. On the 1st of each month, Liz and I receive $1,200 of mailbox money. I suspect that in the upcoming months, we’ll do absolutely nothing (no repairs, no phone calls, no emergencies), get our mailbox money, smile, and then head off to the bank to pad our account for the next real estate purchase. Months like this are definitely welcomed. I fully expect this venture to be hassle-free at times this summer, and we’ll love the mailbox money even more because of it.

Have you ever been a landlord? Do you love it or hate it?

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10 comments to First-Time Landlording – My First Two Weeks

  • bobbi dougherty

    ummm, everyone’s toilet backs up at one time or another, lol. Silly “friend”. Do what you are doing and do it well, it will repay you. 🙂 Great job landing good tenants too! most people wouldn’t care, just get someone in…thanks for sharing.

    • It definitely took effort to find a quality tenant, but I knew this would be absolutely key to earning a truly passive income. I’m so glad we took our time and performed the proper checks on each tenant. Thanks for the comment Bobbi!

  • Not a landlord yet but would love to become one. Appreciate your posts on the topic – the good and the bad of being a landlord. They help me keep things in perspective and motivate me to take the leap.
    John recently posted..When to Sell a Dividend Stock

    • Appreciate you stopping by, John! So far, landlording has been great. The three young guys are a pleasure and will probably be a blessing to their surrounding community as well. Save up those dollars and get educated on real estate. The more you learn, the less daunting your leap will be! 🙂

  • Melanie

    Can you advise what you did in particular to find a good tenant?

    • Hi Melanie. Sure! I actually did a ton of research and wrote about how to find the perfect tenant before we were even ready to rent out the house (How to Attract the Best Tenants For Your Property). I then referenced it months later and tested my own theories. Let me tell you, it worked beautifully! We didn’t follow every single step that I laid out (we DID end up advertising to everyone on Craigslist), but by following most of them it sure made the process a whole lot easier!

      The best advice I could give is set up your qualifications before you start looking (ie. necessary income, credit scores, and rental history), and then stick to your guns until that qualifying tenant walks in. It might take a few weeks, but it’ll be totally worth it when you don’t have headaches for years to come!

  • Dave

    Hi Derek – Congrats on starting your landlord journey. I’ve received similar, skeptical reactions from friends/co-workers when talking about becoming a landlord myself (timing isn’t right for me now). Couple questions for you: 1) do you own your rental as a corporation (LLC or similar) or in your own name? 2) Did you consider a rental management company – why or why not? Looking forward to reading about future rental posts!

    • Hi Dave. Yes, we created an LLC for the rental (and future rentals to come) and made sure to put the house deed in the name of the LLC. This makes taxes easier and protects our personal assets as well. I spoke a little bit about the process of that in this post: http://lifeandmyfinances.com/2016/04/turn-your-home-into-a-rental-property/ .

      I never really considered a rental management company because I’m fairly handy and the property isn’t that far away from our house. Plus, I’d rather have some control over who rents my house and what they’re doing with it. Call me a control freak, but when I have an asset that’s worth over $100,000, I’d really like to know what’s going on.

      Hope this helps you out! Stay tuned for more real estate posts!

  • Congrats on realizing your dream of becoming a landlord. That’s a big deal! Excited to come back and see more real estate blog posts.

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