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Bought a house in 2007 in Colorado Springs and had to move out of state in 2012 for work - the crash meant I was underwater on my mortgage, but not by much. So

by jcadam 9y ago

Bought a house in 2007 in Colorado Springs and had to move out of state in 2012 for work - the crash meant I was underwater on my mortgage, but not by much. So, I decided to hire a property manager (Lesson 1: Never be a landlord if you're not going to be present to manage the property yourself - PMs take their 10% cut of the rent and do absolutely nothing in return) to rent the place out and sell in a few years after the market had recovered - which didn't happen in Colorado Springs until recently. Last summer I gave my tenant her 60 day notice, found a listing agent, and my wife flew out to Colorado Springs to help prep the house for sale... Turns out the tenant had totally trashed the place. In fact, she had been operating a rabbit breeding operation in the house (there were rabbit cages stacked floor-to-ceiling in some places, and a large outdoor hutch had been constructed in the back yard). Carpets ruined, feces smeared on walls, and a general unholy smell throughout the entire house. Hell, large amounts of rabbit bedding and feces had been dumped into the crawlspace. This is the tenant I had cut a lot of slack to over the years with late payments, etc (Lesson 2: Never cut a tenant any slack - if you do they'll walk all over you). What should have easily been a $40k profit (had the house sold at market rate) turned into a $5k loss (at least I didn't end up owing any capital gain tax, pfft). I will burn a house to the ground before I become a landlord ever again. Also, Zillow keeps sending me updates on the property value (which magically keeps going up), despite my attempts to make it stop (I don't want to know, really) :(

branchless 9y ago
Love the hypocrisy: > So, I decided to hire a property manager (Lesson 1: Never be a landlord if you're not going to be present to manage the property yourself - PMs take their 10% cut of the rent and do absolutely nothing in return) to rent the place out and sell in a few years after the market had recovered - which didn't happen in Colorado Springs until recently. So you figured you'd do nothing and wait for your profit whilst another parasite waited for theirs whilst the tenant did all the work and gave you both a cut! And easy $40k. Glad it didn't work out for you. Here's some light reading from today's Guardian: https://www.theguardian.com/commentisfree/2018/apr/16/landlords-social-parasites-last-people-should-be-honouring-buy-to-let https://www.theguardian.com/commentisfree/2018/apr/16/landlo...
- dnadler 9y ago
  Ha, that's a bit harsh, no? Nice opinion piece, by the way, checks all the boxes for stoking outrage. Maybe landlords do serve a purpose? Maybe people who don't want the responsibility of owning a home can benefit from renting? Maybe people who can't or don't want to save for a down payment can benefit from renting? Maybe people who don't plan on settling in a single place any time soon can benefit? Let's use our critical thinking skills next time before jumping on the crazy train.
- jcadam 9y ago
  Grow up. I've been a renter in the past, and when you're a renter you're expected to perform a minimal amount of basic upkeep (to include small things like not breeding rabbits inside the home) as stipulated in the lease -- don't like it, don't sign it. And a property owner is not a parasite who does 'nothing.' They're responsible for making repairs when something breaks and performing regular maintenance. A property manager is supposed to handle collecting rents, arranging for repairs (and passing along bills to the owner), and monitoring the property to ensure the lease is being adhered to (which my PM clearly failed to do). I always turned over the properties I rented back to their owners clean and fit to be rented out (or sold) again (I always got my security deposit back). It's also kind of a basic courtesy when someone trusts you to live in their property. I'd rather be trusted than have to suffer through weekly inspections by the property owner, but that's just me.
  - branchless 9y ago
    I'm not condoning willfully damaging something, I would never do that, however I am amused that the original poster just wanted to live the rentier dream of delegating and watching the dollars flow in. No risk (wrong). No work (wrong). As for "collecting the rent" for the most part this is checking if it appears in a bank account. If you are exploiting someone who has finance issues then sometimes you have to threaten them if they don't pay. They should just work on creating wealth instead of trying to exploit a need for housing for their own gain. The negative equity they found themselves in is part of the same cycle of greed. As a another poster noted, it's a zero sum game and for there to be successful parasites others have to lose.
EADGBE 9y ago
That's unfortunate, and something that keeps me only managing my own properties locally. I know it won't scale so much, but I feel like I have too much skin the game for the property to lose value on my own fault. It sounds like a very bad experience with a management company. Was this your first PM company?
- jcadam 9y ago
  Yes, first and last time being a landlord. When I was growing up, my parents had a similarly bad experience renting a home they couldn't afford to sell after moving out-of-state. Theirs included an unscrupulous (rather than just incompetent/lazy) PM who charged them for unnecessary and expensive repairs, and tenants who paid their deposit and never paid again (the PM talked them into renting to Section 8ers). The situation ultimately ended in foreclosure for my parents (they were depending on rental income to make the mortgage payments). If I ever find myself upside-down on a mortgage again, I'm going to short-sale, walk away, or find a reputable local arsonist to deal with it.

by jcadam 9y ago

branchless 9y ago

Love the hypocrisy: > So, I decided to hire a property manager (Lesson 1: Never be a landlord if you're not going to be present to manage the property yourself - PMs take their 10% cut of the rent and do absolutely nothing in return) to rent the place out and sell in a few years after the market had recovered - which didn't happen in Colorado Springs until recently. So you figured you'd do nothing and wait for your profit whilst another parasite waited for theirs whilst the tenant did all the work and gave you both a cut! And easy $40k. Glad it didn't work out for you. Here's some light reading from today's Guardian: https://www.theguardian.com/commentisfree/2018/apr/16/landlords-social-parasites-last-people-should-be-honouring-buy-to-let https://www.theguardian.com/commentisfree/2018/apr/16/landlo...

dnadler 9y ago
Ha, that's a bit harsh, no? Nice opinion piece, by the way, checks all the boxes for stoking outrage. Maybe landlords do serve a purpose? Maybe people who don't want the responsibility of owning a home can benefit from renting? Maybe people who can't or don't want to save for a down payment can benefit from renting? Maybe people who don't plan on settling in a single place any time soon can benefit? Let's use our critical thinking skills next time before jumping on the crazy train.
jcadam 9y ago
Grow up. I've been a renter in the past, and when you're a renter you're expected to perform a minimal amount of basic upkeep (to include small things like not breeding rabbits inside the home) as stipulated in the lease -- don't like it, don't sign it. And a property owner is not a parasite who does 'nothing.' They're responsible for making repairs when something breaks and performing regular maintenance. A property manager is supposed to handle collecting rents, arranging for repairs (and passing along bills to the owner), and monitoring the property to ensure the lease is being adhered to (which my PM clearly failed to do). I always turned over the properties I rented back to their owners clean and fit to be rented out (or sold) again (I always got my security deposit back). It's also kind of a basic courtesy when someone trusts you to live in their property. I'd rather be trusted than have to suffer through weekly inspections by the property owner, but that's just me.
- branchless 9y ago
  I'm not condoning willfully damaging something, I would never do that, however I am amused that the original poster just wanted to live the rentier dream of delegating and watching the dollars flow in. No risk (wrong). No work (wrong). As for "collecting the rent" for the most part this is checking if it appears in a bank account. If you are exploiting someone who has finance issues then sometimes you have to threaten them if they don't pay. They should just work on creating wealth instead of trying to exploit a need for housing for their own gain. The negative equity they found themselves in is part of the same cycle of greed. As a another poster noted, it's a zero sum game and for there to be successful parasites others have to lose.

EADGBE 9y ago

That's unfortunate, and something that keeps me only managing my own properties locally. I know it won't scale so much, but I feel like I have too much skin the game for the property to lose value on my own fault. It sounds like a very bad experience with a management company. Was this your first PM company?

jcadam 9y ago
Yes, first and last time being a landlord. When I was growing up, my parents had a similarly bad experience renting a home they couldn't afford to sell after moving out-of-state. Theirs included an unscrupulous (rather than just incompetent/lazy) PM who charged them for unnecessary and expensive repairs, and tenants who paid their deposit and never paid again (the PM talked them into renting to Section 8ers). The situation ultimately ended in foreclosure for my parents (they were depending on rental income to make the mortgage payments). If I ever find myself upside-down on a mortgage again, I'm going to short-sale, walk away, or find a reputable local arsonist to deal with it.