Rental Properties - My Experience As A Landlord
Becoming A Landlord - How It All Began
I never intended to invest in real estate. I always dreaded the thought of getting a bad tenant - someone who would abuse the property, not pay their rent, or both. Worse than that was the thought of having to evict someone. This was all compounded by the fear that something - or everything - would break and require fixing. I could just see myself paying out more money for upkeep than I was receiving in rent. Yuck.
So how did I get here? Did I overcome my old fears and purchase an investment property? No. I had found new work a few hundred miles away from where I'd been living for the previous half decade. A little too far for a daily commute, I had to put my home up for sale. In this market. I got a fairly steady stream of lookers, but no buyers. About half of the people who looked at the property, however, asked me if I'd rent it to them.
Soon I had moved everything out, and unpacked at my new (temporary) location. What's worse than late rent checks or the occasional repair bill? Paying for an empty house out in the country that could be vandalized (or worse) without my knowledge. It was a remote place...the house could burn to the ground and I probably wouldn't hear a thing of it for weeks. So the situation changed in my mind. Now I needed a long-term house-sitter. And why not one who would pay me? I called up the most reliable prospect I had, and we came to an agreement on the rent and term of contract. We met up soon after to sign the lease. Bonus: This couple wanted to be able to purchase the house after the lease was up.
Welcome To Landlording 101
So now I found myself in a position I never thought I'd be in. I've taken a new job, moved halfway across state, and another couple is living in my home. I had hoped to sell it and move on, but this seems much better than leaving the place vacant with a "For Sale" sign out front like so many other homes these days.
We're now nearing the first year of our landlord-tenant relationship, and I must say it's going much better than I had thought. My tenants really enjoy the house, as well as the land that goes with it. They take care of it as if it were their own, possibly due in part to the fact that they still intend to make it their own. So far there have been no major repairs required, and anything minor was handled by the tenants of their own volition. And while the rent was late one month, I was glad to find that it came with advance notice, an apology, and an explanation.
Where I Stand Now
So everything is going fairly well for me. My mortgage payments are covered, and the house is being looked after. My current tenants are working on getting a down payment together and coming up with a loan. Everything has gone quite well so far, and I hope it ends just as well.
Will I look into purchasing rental properties in the future? Probably not. While I have good tenants, and faith that most renters out there would have the same respect for my property, it really isn't for me. For my long-term investments, I prefer contributing funds to my retirement plan and index funds. My perspective on rental properties certainly has changed over the past year or so, but in the end I prefer to put my money to work in the market.
Any other investment property owners out there? If so, how has the experience been for you?