My wife and I have often found ourselves owning more than one home. When opportunities have arisen, we have charged headlong into acquiring our next forever home. While selling one of our previous homes, we had an interested couple ask if they could rent the home prior to the purchase. The couple was new to town and did not have enough working history with their new employer, limiting their financing options. Ultimately we agreed to the proposed arrangement and reluctantly became landlords.
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THIS TWOSDAY'S TAKEAWAYS
Avoid becoming a landlord until you are absolutely ready.
Passive investments create more opportunities to make amazing memories.
My wife and I have often found ourselves owning more than one home. When opportunities have arisen, we have charged headlong into acquiring our next forever home. While selling one of our previous homes, we had an interested couple ask if they could rent the home prior to the purchase. The couple was new to town and did not have enough working history with their new employer, limiting their financing options. Ultimately we agreed to the proposed arrangement and reluctantly became landlords.
With a new home of our own requiring a lot more yard care (just shy of an acre of carefully manicured grounds) and a newborn at home, carding for a rental property was far removed from other top of mind priorities. So we missed a few things with our new tenant.
In preparing to sell our 1925 home, we made many improvements including installing all new kitchen appliances. While our new refrigerator had an ice maker, the home did not have a water supply line running to it. A few weeks after moving in, our tenant asked if we could get the ice maker working for him. Up to this point I had always been a DYI kind of guy, so I agreed to take care of it one night after work. Days turned into weeks of avoiding the project until I finally gave in. However, once completed, I discovered the new ice maker required replacement as running them with no water for weeks ruins them. Now to order and install the new unit.
Needless to say, this and other missed opportunities were frustrating for our tenant, and to be fair, I couldn’t agree more. Our contract unwound, and we were ultimately left scrambling to re-list our home into a softer market. The sale took even more time and we left the home unoccupied, paying the mortgage along the way, and selling for less that we had been previously contracted for.
Being a landlord can be a lot of work. We were not prepared and it cost us time and a lot of money needlessly. And we missed out on some opportunities to create great family memories. I wasn’t ready for that and much preferred the passive real estate investments I had made.
