After the eviction which served as a huge lesson on real estate, I was cautious but hopeful for a better tenant. It also gave me a chance to reflect on a few things.
I never wish an eviction on any landlord. It’s a terrible process and your property can be disgustingly trashed and ruined when you finally get it back. Mine certainly was.
What helped with the eviction process was that my mom instilled in me to be a meticulous recorder. I had a spreadsheet that documented when rent was received, how late each rent payment was, and if she didn’t pay the full rent that month, how much she owed me.
I also scanned and saved all repair invoices and titled each one by the date the job was completed and what was repaired. More importantly, I saved and noted every communication I had with my tenant. In a binder, I placed every email, text, and letter that I sent and received from her. All of this helped when I met with my lawyer and had to ultimately go to court.
Rent must ALWAYS cover the mortgage
I had a good thing going before the refinance. To learn more about that, you can read it here. I always gained about $1000 extra per month and didn’t have to worry about paying out of pocket for other expenses like repairs, property tax, and Waste Management.
With my new tenant, I was happy to be able to increase rent to $2150/mo from $1850/mo. I wished I could have charged more but that rental price was what was competitive around the area and I wanted to rent out this property asap.
$2150 (rent)-$1974 (new mortgage)=$176 extra per month.
That extra $176 per month needed to cover property tax, Waste Management and any repairs that should arise. The extra helps, but I would still need to pay out of pocket an extra $2,000-3,000 per year to cover all extra expenses.
In an ideal world, I would have charged at least $2500/mo so that property tax, Waste Management, and any minor repairs were always going to be covered.
Smaller houses are easier to rent out
My house is pretty big. It has 5 bedrooms and 3 bathrooms. It also includes two sizable living rooms, a quaint indoor laundry room, and 3-car garage. It is way bigger than any house I’ve ever lived in.However, with a big house it’s harder to find renters.
Most renters I found had smaller families of 3-5 people and some did not have the desired income I was looking for. My place was just too much house for them. From observing my parents, their most successful rental properties were those with 2-3 bedrooms. They tend to have an easier time finding tenants than I did.
Find a trusted handyman
My rental property is about a 1.5 hour drive from my place in L.A. I can’t just drive over there at the drop of a hat so I really needed a handyman I could trust.
Having a trusted handyman is great because the tenant can also become familiar with that person and the tenant doesn’t have to always schedule time for repairman to come in and give quotes on repairs. The scheduling is hard because essentially as the landlord, I had to be the middleman for some of these conversations.
Now that I have someone to rely on, it is easier because the repairman contacts my tenant directly. He will email the invoice and I will send him a check. I also can trust that he will do a good job in fixing the property. More importantly, the repairs are done faster. I do not have to wait on quotes from different vendors.
This did not happen overnight. It took me about 3 years to find someone good so be patient and research around. You can also try to see if any property management companies have repair companies they could recommend. That’s how I found mine.