I have a love-hate relationship with owning real estate because something always comes up. The more physical rental properties you own, the more problems you will have as a landlord.
In June 2022, I decided to rent out a fully remodeled single-family home I had purchased in 2019 to a second family. We had originally planned to live in the home once it was finished.
However, I severely miscalculated how long it would take to remodel the entire home. Instead of taking one year, it ultimately took two and a half years to complete partially thanks to the pandemic. So when a close by fully renovated home was for sale in mid-2020, we decided to pounce on it.
For our old home, we first got a family to rent the top two floors while the ground floor was remodeled. When the remodel was complete, a new family of three moved in at a higher rent.
So far, the tenants are solid and pay through electronic autopay each month. With only three of them and no pets, the wear and tear on the property are less than the previous family of four with a dog.
Maintenance Issues So Far With The Rental Unit
You would think a newly remodeled house would have no maintenance issues. But not so.
On November 16, 2022, my tenant texted me saying there was a small puddle under the kitchen sink. It turned out the p-trap pipe had cracks on both sides. Thankfully, it was an easy fix that only cost about $150 for my handyman's time and the part.
Then on January 6, 2023, my tenant texted me again. After weeks of heavy rains and winds, the pillars of our fence had broken. The wooden fence was probably over 35 years old, so I didn't feel that bad splitting the $2,600 replacement cost with my neighbor.
But in order to replace the fence, I first had to get a couple of fellas to come out and bid on the project. Then I had to come to an agreement with my neighbor. All this took away time that I'd rather have spent with my family, hence my shift towards private real estate investments.
A New Landlord Problem: The Mysterious Sound
My heart sinks every time I get a text from this tenant. She always starts off by saying something like, “Hope you are well!”
And every time after seeing the message I immediately think to myself, hmm, I'm not as well now!
Her latest message was this,
“Hi Sam! I hope you are well. One of the smoke alarms in the basement keeps beeping. For some reason, I can't figure out which one exactly. I tried to open them to check the batteries, but they are hardwired. Not sure how to fix the sound. Could you pop by sometime tomorrow to check?”
Ugh. How hard could it be to identify where the fire alarm sound is coming from? As a handy guy myself who can YouTube how to fix things, I couldn't help but feel annoyed by her latest text.
Summoning me to come by the very next day felt like a stretch. Could she, her husband and 12-year old daughter really not figure out the source of the sound and swap the backup battery or alarm?
I'm probably more sensitive than most regular mom & pop landlords because I haven't been told what to do since I left work in 2012. My tolerance for instruction is low, which is one of the repercussions of early retirement.
Waited 24 Hours To Respond
In the lease agreement, I told the tenant to contact me by e-mail with any problems and I will respond within 24-36 hours. But if there's an emergency, she can contact me by phone.
Therefore, I waited a day to respond by text. I didn't want her to get used to texting me all the time for the smallest problems.
As the saying goes, “If you want to get something done, give it to the busiest person in the office.” I don't want to be viewed as the efficient person that I am.
Visiting The Rental Property With My Son To Inspect
The next day, I responded to my tenant and told her I could stop by after picking up my son from school. I'd bring him along so he could help diagnose the problem. She said sure.
Being able to bring my son immediately lifted my spirits. At almost six years old, he gets to learn about the duties of being a landlord with a real-life, problem-solving example!
After explaining to him what the word “inspector” means, I told him he would be Inspector J for the afternoon. J is the first letter of his name. He would help daddy identify where the fire alarm noise was coming from given the tenants could not.
If he could properly identify the source of the sound, we'd go eat popsicles after. He was thrilled!
Identifying The Problem
Inspector J and I investigated every fire alarm downstairs and upstairs. The five beeps would go off every 30 seconds. So every 30 seconds we would move to a different room in the house.
Unbelievably, we couldn't easily identify which fire alarm was beeping either! It was the strangest thing. I even pulled down and unplugged the hardwired fire alarms to no avail.
After about 15 minutes, I had a realization. Maybe the noise wasn't coming from one of the rooms. Instead, maybe the noise was coming from inside the walls! Spooky!
The downstairs was completely new construction. Just a year ago, the space had no walls as they were demolished.
My idea was to get rid of the existing 300 square feet of downstairs spacing and create 650 square feet of livable space. After all, the best way to make money in real estate is through expansion.
Inspector J and I put our ears to every wall until we pinpointed where the noise was the loudest. Ah hah! The noise was coming from between the living room and bathroom wall. Then we got a step ladder to see exactly what height the noise could be coming from.
Inspector J was excited to confirm the sound was the loudest at about six feet high. The tenant concurred and was pleased we had at least found the source of the sound. She wasn't going mad.
Here's a brief audio of Inspector J confirming the sound was up high while on the ladder. I was having so much fun seeing him try and figure things out.
Coming Up With A Solution
Although we had located the sound source, we still had to come up with a solution. The tenant told me the noise wasn't that bothersome since their bedrooms were two floors up.
Downstairs was her workout area with a treadmill that drowns out the beeping noise. Further, they couldn't really hear the noise one floor up either.
I talked to Inspector J and the tenant about the options:
1) I would first go through my video archives to verify whether there was a fire alarm inside the walls.
2) If there was a fire alarm inside the walls, we could either: A) Cut a hole in the sheetrock and take it out, or B) Do nothing and let the alarm run out of battery. Option A would probably cost $150 and two hours to patch, sand, and paint the wall.
Upon returning home, I searched through my video archives and identified what was behind the walls! There it was, a white, battery-operated fire alarm attached to a beam. For some reason, the construction guys had not removed it before putting up the sheetrock. Ugh.
Inspector J and I informed the tenant of our finding via text message, and she was pleased. At least she felt at peace knowing she wasn't crazy for not being able to find the source of the sound. We also felt good knowing the alarm inside the walls was not hardwired.
The tenant agreed to wait a couple of weeks to see if the alarm would run out of battery. To set expectations, I told the tenant it could be months before the battery runs out. She seemed fine.
Lesson: Always video all stages of home construction, especially before the walls are covered up. You never know!
Attention To Details When Remodeling
Internally, I couldn't stop laughing at the hilarity of the situation.
On the one hand, it felt great to have found the culprit and come up with an agreeable solution. On the other hand, how random it is for something so unnecessary to occur!
When remodeling a home, attention to detail is critical. If possible, inspect the work of your contractor and sub-contractors daily. I've had situations where the tile was set wrong or they forgot to install the shower membrane and so forth. Ripping tile and sheetrock out to redo something is painful.
If remodeling with permits, the inspector should catch most of the issues, but not all. However, as the homeowner, you're responsible for the final details. And it is those final details that will drive you nuts if not done properly.
Changing Your Mindset As A Rental Property Owner
A good landlord will provide the best living situation possible for the tenant. Given rental income is considered semi-passive income, it's important for landlords to take action when problems arise.
For years, my problem was viewing rental income as passive income. As a result, every time a problem came up I felt annoyed. Once you change your expectations on rental income, you will feel better about being a landlord.
I'm now excited to provide more real-life teachable moments for my children whenever problems arise. A positive mindset shift is powerful.
Five Things Children Can Learn From Landlord Parents
Parents who own rental properties might as well turn negatives into positives.
1) Problem-solving and conflict resolution
Problem-solving is a critical skill to learn since we will all encounter endless problems in life. Children will learn how to identify a problem, understand a problem, and figure out a solution in a timely manner. When a problem is resolved, a child can feel proud to have been a part of the resolution.
2) Good communication
Learning how to communicate well with others is another important skill. Great communicators are empathetic, respectful, and clear. The more practice we have communicating with others during unique situations, the more comfortable we will be communicating during future unknown situations.
Speaking, writing, and reading are essential skills for all children and adults to master.
3) New vocabulary words
Being a landlord provides an opportunity to teach new vocabulary words to our children like: inspector, permits, remodeling, rent, real estate, lease agreement, construction costs, inflation, tenants, turnover, insurance, mortgage, handyman, property taxes, conflict, faith, and more.
There's no set rule stating we only have to teach our children basic vocabulary words such as: sweater, cat, and winter. The greater we can build our children's vocabularies, the greater their ability to read.
If we can teach our children how to read everything, they can learn everything!
4) The importance of financial planning for the future
Eventually, our children may have to manage their parents’ rental properties. If they are taught about the ins and outs of owning rental property from an early age, they should be well-equipped with knowledge when they are adults.
With thoughts about total income composition early on, a child might appreciate their education more. Further, when our children grow up, they might be more strategic in how they want to spend their time.
5) The reality that achieving financial freedom takes work
Finally, landlord issues will show kids that achieving financial freedom takes work, even with a decline in meritocracy. One of the problems early retiree parents face is demonstrating good work ethic when they don't have to work.
Each landlord problem provides another opportunity for parents to show their kids what it takes to achieve financial freedom. Doing is more powerful than telling, which is one of the reasons I will also write more books. Maybe my kids will be more inclined to read and write themselves if they see me doing so.
Of course, I don't wish for more landlord issues in the future for any of us. However, when they inevitably arise, we might as well use them as teachable moments for our kids!
Update About Fixing The Rental Property Alarm Issue
Unfortunately, after three weeks, the alarm kept beeping. My tenant texted me while I was on vacation, even though I told her we'd be gone and to email me for non-urgent matters.
When I got back, I explained the situation to my handyman who came by three days later. He cut a hole in the wall at the precise place I thought the alarm was and took it out. So easy! He then put the sheetrock back and taped and mudded the holes.
His work took about 30 minutes and he charged me $100. Fair enough given he is so easy to work with and is flexible.
I stayed back another 45 minutes to use a blowdryer to dry the mud. Then I sanded the dried mud then applied two coats of paint. I brought a blowdryer because I didn't want to have to come back again.
While blowdrying, my tenant scared the bejesus out of me when she popped behind the door and said “Wow!” I told her we'd be done in an hour, but she came down after 35 minutes.
While waiting for the first coat to dry, I touched up about 20 spots alone the various walls downstairs because they were scruffed up. I also got out two large stains on the brand new carpet I installed on the stairs and landing area before the tenants moved in eight months ago.
The stains were annoying me when I first came over. But I figured they must have tried to get them out, otherwise, why else would the stains still be there. Given I had time, I used their “Oxiclean” solution from the laundry room and sprayed the stains. Then I used to a wet sponge. All the stains came off!
It's as if the tenants didn't even try to get the stains out. There truly is a difference with how we take care of property when we own versus rent. Renters have tested my faith in humanity before, which is why I don't want to own more rental properties.
Reader Questions And Suggestions
Have you ever had a mysterious landlord issue that took a lot of investigating to solve? How else can we positively view the work involved in owning rental properties?
If you want to invest in real estate passively, take a look at Fundrise, my favorite private real estate investment platform. Fundrise focuses on investing in single-family and multi-family homes in the Sunbelt, where valuations are lower and cap rates are higher.
It is actually due to all these recurring landlord issues that I started investing in private real estate funds and deals since 2016. I believe in the long-term demographic shift towards lower-cost areas of the country thanks to technology. Earning true passive income becomes more valuable as you get older.
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