LANDLORD
HORR R STORIES
E
very business owner knows that costs are incurred simply
as a part of doing business. Property ownership and being a
landlord is no different. Things break or fall into disrepair
and have to be fixed, and that costs money. Like it or not,
most tenants don’t take care of the houses they stay in. They
may not actively be messing things up, but they certainly aren’t doing
repairs. Even worse, if they do choose to do repairs themselves, they are
often doing more harm than good in the long run.
One of the properties I own was purchased from a landlord who never
raised the rent on his tenant. The house fell into disrepair while the
tenant purchased toys to play with, including a $30,000 motorcycle.
The seller, on the other hand, had $15,000 in credit card debt. Instead of
enjoying the income a rental property should produce, he was basically
paying half the market rent himself, with nothing getting fixed, while
his tenant was living a lifestyle way above his means. When I went in,
there was mold everywhere, the shower was leaking, and trash was
piled up in every room. Costly repairs, to say the least.
The bottom line? As a landlord, you need to be charging market rates
for what you are providing. You aren’t doing yourself or anyone else a
favor by subsidizing the lifestyle of your tenants on your own dime. You
will end up losing money one way or another trying to play that game.
Unfortunately, it may not become evident until it’s too late.