Only one more day until the weekend! This weekend is full of dog adoption events on Saturday and house hunting on Sunday. And somehow I need to find the time for an oil change. My poor truck. I am terrible with auto maintenance. I'm lucky it is so reliable.
Thursday, August 11, 2011
Once again I was looking forward to rent money magically appearing in my bank account. Once again I received, instead, an email that said my tenants were sent a 5 day notice because they didn't pay their rent or their check bounced again. I don't even want to know what the excuse was this time. Luckily I am not depending on that money for any immediate need. I hope they will pay and I will get the money at the end of the month like I did for July but this trend is not encouraging. They obviously can't afford my house. Well, I'm not going to worry about it. I'm going to let the property management company handle it because it is their job and I am going to live within my means so that I am not dependent on the rent money.
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I suggest you either:
1) become more of an active landlord and take over rent collection yourself,
2) or, stop buying rentals as an investment to avoid the hassel of rent collection.
Using a management company is a joke and a waste of your resources. You would never pay 10% comission to have a broker sell you the only funds he gets a comission for also. Likewise, why are you throwing your money away at someone who gets a kickback for any services; (ie. Plumbing, electrical, listings, evictions) that your income property will need. You need to do your due diligence.
I disagree. You can manage your property yourself or pay the 10%. I would suggest that before you rent it out again talking to the manager and letting them know that you want only reliable tenants. You may need to lower hour rent to attract a "better" tenant. Good luck.
uh..."over-wrought" I mean.
I don't know what "over-wrougTH" is ;)
Britta in Texas
Hmmm...my original comment disappeared. I'll have to come back later and talk about "risk"
Britta in Texas
Hi Daizy - it is this kind of scenario that I was referencing when I talked about the "risk" in the comments (mid-July, I think?)
Someone disagreed and brought up the Fed and interest rates and inflation and the like, but regardless of what the Fed does, or who controls congress, or what's going on in foreign markets, the real and persistant risk that should most concern us is stuff like this.
Renters are not a guarantee; neither are roommates. Nor jobs, nor relaible cars, nor good health.
You are currently DEBT FREE. Please reconsider your position. You are in the cat-bird seat and have worked very hard to get there. You owe NOTHING. Don't blow it!
I am two years older than you, also single, and am working like all get-out to get to where you are. It is going to take me 7 years at full run.
You are perfectly positioned to call the shots from here on out -- please don't turn that right, that freedom over to a creditor.
It takes patience, but you get to be your own master.
Britta in Texas
I think you dismiss what is going on with inflation and the markets too easily Britta. What good is being a saver when you are loosing 10% to 20% per year in purchasing power (I hope you don't believe that CPI number of 3% inflation, just take a glance at prices in the grocery store over the last two years)? Expect a nasty surprise soon in the form of an upward revision of CPI-U despite the best efforts of the number massager at the BLS. They were talking about this on NPR today as a matter of fact.
Just because Daizy's property management is having as hard a time as she was collecting rent from her tenants does not mean that she should save up cash for everything she wishes to purchase, specifically a new property that she could easily afford the payments for (actually she could save up 4 to 5 months mortgage from every month's salary - maybe more since she is so frugal)and that would have a roommate that alone could cover the mortgage. Roommates tend to pay much more reliably then remote tenants too btw.
There has never been a better time to OWE something if it is in fixed USD at a fixed rate. Why do you think the Chinese are so upset with the S&P downgrade of US debt? The jig is up. Nobody who pays attention thinks that the USD is headed anywhere but the toilet. Who will win in this situation? Definitely not the "savers." The best course of action is a long term fixed rate loan on hard/tangible assets and real estate. Daizy is doing the smartest thing anyone could do in this economic environment.
There are times when it is smart to have no debt. Now is defintiely not one of those times. There is risk in being too conservative with money and that risk has never been greater than now.
Daizy, the interwebs have eaten one of my posts ... it was here yesterday but is gone today. Anyway, I agree with the second post that you should indicate to your PM that your next renters should show NET income at least 3 and preferrably four or more times greater than rent.
I also check for credit scores above 700 with no lates for at least two years and no public records.
It might delay getting your house rented by a month or even slightly more but it will be worth it in the long run if they sign a lease for at least a year.
Good luck and I hope your next set of renters are a lot more reliable.
Sorry, T, but there is never a good time to owe someone else your paycheck, I don't care what NPR says.
I guess I should be astonished that people prattle on about "good debt" but I'm not. They've been doing it for 80+ years now.
I appreciate all the effort you put into your rationalization, T, but your answer made me laugh out loud. And not the LOL kind. You sound just like every broker/banker/creditor who ever had anything to sell: "Now is the BEST time to be in debt!" Pfssh.
Good luck, Daizy. I hope you find counsel wiser than the average NPR consumer.
My parting advice: don't go with the herd. When everyone is saying "now is the time to borrow! Debt is good! blah blah blah..." run, don't walk, in the other direction. Herds have a tendancy to stampede off of cliffs.
Britta in Texas
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