All My Rentals are Full (for now…)
I was able to take in a pretty decent renter in my vacant apartment in my duplex. Now that the winter is over, the calls on the rental seem to be exponentially more in volume. The tenant had lived at her old place for about 10 years, and was ready to move out of the apartment scene. She was slightly more risk that my original plan, so I went with a month-to-month lease. Overall, probably less risk than 90% of tenants, but I saw a few things that I would have preferred to have been different. The fast move in was one red flag, although that was due to procrastination on her part.
So, February and March 2015 will be a 100% full months, that is the first time since July 2014.
Tenant Transitions and More Landlord Work
One of my tenants is buying a house so they gave notice to move. Since I told them I was a Realtor when they moved in, and gave them some incentive to work with me when they were buying their next place, I was able to be in the buyers side of the transaction. My arrangement with my broker and friend is pretty good; I just pay him what it costs. I keep 100% of my part of the commission.
So I lost a tenant but gained a real estate commission. I showed several homes and helped with the negotiation process. It was my first RE transaction as a Realtor since ~1984 or so, so there was a bit to learn. It’s actually easier now, many of the forms pre-fill and get printed easily.
Another tenant bid on a short sale and used their friend as a Realtor. They have given me a heads up they will be moving, but it may take a while to get the sale completed.
I have a tenant that gave notice to be out on 3/31, so I started advertising that right away, and the response has been great. She purchased a home but not through me. She did not know I was a Realtor; otherwise she would have used me… My (real) bad. I have since notified all my tenants.
I have a tenant that gave notice to be out on 4/30, so I will start advertising that soon.
I am working with another tenant to purchase a home in the next few months. She is extremely busy, so it may take a few months before she is ready. In the meantime, I collect rent.
Water Bills!
I received a call from the City water department. It seems my water usage for the most recent quarterly billing was 3x what is ‘normal’ in one of my buildings. An extra 170,000 gallons! This generally means one of two things. Extra tenants are a major reason and often the water usage goes up dramatically when they show up.
The other reason is a leak somewhere, typically a toilet flapper or float valve. I quizzed all four tenants to see if they noticed a water leak. One said they have a slight leak in the kitchen faucet, so I went to that unit first. The leak was minor, only a drop every minute or so. So I checked the toilet.
The toilet float valve was all the way up and the water was still running. It seemed to be slower than full blast, but it was constantly running. I quickly ran to Home Depot and picked up a pack of float valves. They are like $7 each. It took five minutes to change it, but about an hour total to inspect, run to the store, and actually change the valve.
An inspection might have caught the problem, but likely not. It probably went bad over the past few months and likely would have been OK on the inspection. Monitoring the water meters on a weekly basis would have caught it, but who wants to do that?
So, I pay a $500 extra on a water bill…
Maintenance
On the property I manage, I changed a water heater drain valve. It was a relatively quick fix, and was not leaking much, but any leaks with a water heater are bad. It is on a cement floor, so no damage resulted.
I had an issue with a furnace. The best diagnosis I could come up with is a bad gas valve. I changed the pilot light module, the limit switch and the circuit board but still not go. I called a friend of mine and we swapped out the furnace. They are actually simple enough as long as the furnace fits in place. When the gas pipe or electrical connections are backwards, it is a real pain. I did save well over $500 by doing it that way.
Financial Progress
There were a lot of expenses due to tax reasons in December 2014 so the bills are coming due now. I did start contributing my 75% allocation to my 401K, and my H.S.A. I received a company match for the 401K and another $400 for my H.S.A. My paychecks are light, but the amounts flow right into my retirement accounts.
The 401K deductions look a lot better to me than when I have to pay extra payroll taxes. I do this to avoid estimated payments. Anything taken out as withholding on the job counts as money paid evenly throughout the year. It stings less as a payroll deduction than an actual amount coming out of an account.
Now if the Market would start working like it was going to make a gain this year, I would feel better.
What has your schedule been like for 2015 so far? Is it me, or is everyone feeling the compounding effects of cold and darkness?