Amanda in the Real World - Adventures in Investment Property

Vacation is now officially over. In the past few days I've been up to my ears in all matters HOUSE REPAIR and, just today, was forced to return to my place of employment on Fort Hood. Concerning the latter, it was only a matter of time before I'd have to don the baggy boy-fitting digital cammo, put on combat boots, and go back to work. I guess I can't stay on leave forever. Boo.

But back to the house. Actually, houses. I own a home here in Killeen, Texas and a townhouse in Enterprise, Alabama near Fort Rucker. Buying houses and pursuing investment was my "single Amanda" behavior - it's the liability that I brought to the marriage. At the time, when I was single, I saw it as a learning opportunity, low risk investments, and felt a sense of accomplishment from being in a position to do so. I wasn't going to sit on my butt and feel sorry for myself and wait for some knight in shining armor to come along and buy them for me when I could do it myself. In my mind, I would always be able to cover any expense with the money I made since it affected only me and my two shitmonster cats.

My dad jokes that I'm now the "landlord". It's the only thing he can think to say whenever I bring up the subject of my properties. Seriously - real estate mogul I am not.

Then I met HusBand and everything changed. I had heard that marriage will do that to your life - rearrange priorities and whatnot, but didn't believe it until now. What was an adventure of sorts for me back then, now appears to be a drain on our finances. Draining money that he and I could use for traveling together, setting up our "for real" home in VA, setting money aside for OUR retirement that may fare better than real estate. In light of these changed priorities, owning two investment properties just isn't as sexy anymore.

In HusBand's previous life, he had owned a home in Savannah, GA and his experience was overwhelmingly negative. He felt that he was nickeled and dimed by his tenants on repairs and his property manager allowed it to happen. When dealing with property managers, it really is tough to say if they are looking out for your best interests.

In Alabama, they take 10% of your tenant's rent for their cut and that really was the going rate. Here in Killeen my property manager took only 5%. Deal right? I think so, but they managed more properties. In both cases I had a warm fuzzy. The managers corresponded frequently via email, they were available to answer questions and advise me on home repairs, as well as kept tenants in them even if it meant lowering the rent slightly which was ok with me.

What I was NOT prepared for was, in the case of this Texas house, the magnitude of the little things that were not addressed and over time, these things add up. I don't know if I can even blame the property manager since he was largely worried about the big things. Big things in the case of my last winner-tenant - breaking the garage door twice because he locked himself out, electrical problems, leaving the place disgusting, and I'm SURE there was other crap I don't even want to know about.

So when it's all said and done, I'm left with the cost of repairing the "little things":

Things like a door not closing properly, missing sealant on the windows causing water damage, shower, tub, and caulking all over the place that needed to be redone.

Bigtime cracking and separation from the wall.

Window

Tub

Then there was rotting wood on one of the windows on the back of the house.

A busted sprinkler valve which resulted from someone not turning off the water correctly, but when the sprinkler guy investigated further, there was a cracked pipe that was flooding nearby.

The segment on the right side of this unit needed to be replaced.

Weeds in the flowerbed and the lawn. Lawn dude says the grass in my back yard is completely dead and needs some expensive procedure to make it grow again.

Overrun flower bed.

It's like a damn tree growing in the back yard.

There were wasps nests all OVER that house. The night before Jimmy the handyman came I found a baby scorpion in my bathtub. I need pest control...

Gross. Jimmy knocked them all down with a high pressure washer or "warsher" as Jimmy says.

What ticked me off the most, and I mean REALLY got my goat, was the condition of the fence. How hard would it be for Mr. Cool Property Manager Dude to go out there once in a while and take a look and the state of things in the back yard? If this fence got any worse, I'd have to replace it altogether. Jimmy assured me it could be saved though.

As seen from the front - missing board, crappy bland fence is mine, nice stained fence is the neighbors'.

As seen from inside the yard. Missing boards, others are loose.

Back of the fence - fence leaning in on itself, boards falling apart. Ugh.

Doomsday Jimmy tells me the builders had the nail gun setting too high and I could see for myself that the nails went almost all the way through each board. Each board in the back is going to need to be re-nailed.

So far, these repairs have cost me $2,215. I haven't called pest control yet and Jimmy says there's another $1,300 of more work in this house. He found cracks and nail pops everywhere that need fixing. I'm going to try to do some of this myself. I think I will try nailing the fence. And the nasty grout between the tiles in the kitchen floor just needs some elbow grease.

The Alabama house needs some repairs too. Windows need replacing and I need to get a new washer and dryer before I get nickle and dimed to death on the cost of continued dryer repair.

As it is well known, the housing market is in the dumps right now. I do not even know the current value of this Texas home, but I don't think I'm upside down. I'm probably damn close to owing the amount of the property even though I've been paying on it for a few years. The Alabama house will be no problem even though it will probably sell for at least $5,000 less than what I paid back in 2005. So the issue is, do I sell these houses, take a hit, and then be free? Or do I put tenants back in these money pits and take a chance that I won't get losers who will ruin my houses and not care about them?

HusBand and I have been discussing this matter and talking openly about it. He feels strongly about it, that having tenants is simply a losing matter. My original idea was that the houses would be longer term investments and that over time, after the homes appreciated, I would get my money back. It now looks as though I'd have to hang onto them for a long time for this to happen and dump how much money into repairs in the process?

This whole idea of mine seemed so good back in 2005 and 2007. At this point, I'm leaning towards fixing both of them up real nice and put them on the market while I have some disposable income to throw at the cause. Then commit to taking another hit on overall value but be free with it once and for all. And then gain $2,000 a month, in non-house payments, to put towards something for the both of us to enjoy.

Your feedback is most welcome.