Real Estate

Getting Started With Investment Real Estate – Part 7

To start at the beginning – please see part 1 of this series.

So I had a 1st and last month’s deposit from my screened tenants, a signed lease and was happy to have the condo go from costing money to making money. Shortly after they moved in I got a call from the tenants saying that the washing machine was leaking water. I went and had a look, and quickly determined that the problem was the plumbing behind the machine rather then the machine itself.

I hit it with a couple of types of liquid plumber, and played around with an auger, but couldn’t get it flowing fast enough to let the washing machine drain. I contacted the condo corporation, and luckily enough they said this was their responsibility. The superintendent hit the drain with his auger and that seemed to get it working (he’s clearly better with his auger then I am with mine).

Next day the tenants call me and say the dryer isn’t working. It tumbles and heats up but the clothes don’t dry. They assure me that one of their fathers is a mechanic and that I need to replace the dryer. I come out and find that the vent is obstructed (so replacing the dryer would have been a waste of money). The condo corporation assures me that this ISN’T their issue to fix (go figure). After calling a duct cleaning company and getting a quote for $400 to clear the vent, I go at it myself with the auger (I’m not a “right tool for the job” type of guy) and 30-45 minutes later I’ve pulled a bird’s nest out of the vent and now have a steady stream of hot air coming out of the exhaust.

Next day another call comes in. They had done a couple of loads the day before and it had worked fine, now the dryer wasn’t drying any more (and wasn’t heating up). I talked to a few people and looked on the internet and had the idea that there are TWO fuses for the dryer, and the theory is that one of them had blown. I wasn’t able to really figure out the fuse panel (its all the old style plugs instead of the flips I’m used to). An electrician I talked to was positive that the heating element was blown and I needed a new dryer, so I head out and bought one for $400 (after taxes, delivery and paying to get my old dryer taken away). The dryer that came with the place didn’t look that old, so I was sad to see it go, but I figured it must have burnt out working away at the bird’s nest (although it seemed suspicious to me that it burned out AFTER the nest was cleared).

The delivery and installation wouldn’t go through since my ducting wasn’t metal. I had to buy duct materials from Canadian Tire, hook it up myself, and after I plugged it in and pressed the start button, nothing happened. I had a sinking feeling as I pulled out the multimeter that I’d been afraid to use before, get a battery for it, found the fuses for the dryer (sure enough there were two) and found that one of them was a 25 Amp (should have been a 30), and sure enough that was blown. I replaced it, and the dryer started working immediately.

Therefore I’d spent $400 on a new dryer, replaced the ducting to accommodate that new dryer and paid Future Shop $20 to take away a perfectly good dryer (and I could have avoided all that by testing the fuse and replacing it for $4).

Live and learn, this was an expensive lesson, but one I hope I won’t need to repeat – don’t be afraid to learn new things with home maintenance. Ignorance is VERY expensive.

My next (and final for this series) post will detail all the financial elements of the purchase and the first 6 months of operation.

(continued in part 8).

5 replies on “Getting Started With Investment Real Estate – Part 7”

*grin* well, I think property owners enjoy sharing “war stories” and making things sound a lot worse then they actually are. I’ve been VERY happy with this condo and would buy another just like it if I could be sure of a similar experience (in fact, I’m gearing up to start looking again soon, I just got pre-approved for a mortgage).

Tell your wife you’ll support investing in real estate if she finds the properties, does the repairs and deals with the tenants. If she’s willing to do all that, start with a condo (lower cost of entry and you can sell it off again more easily if you find real estate investing isn’t to your tastes).

Its *FAR* more work than buying stocks (and FAR, FAR more work than the “gurus” claim), but if the return is even a little bit better then my dividends I think I’ll look back and feel its all been worth it.

My tenant/buyer (lease with purchase option), calls me back after his rent is late and tells me his girl friend just cleaned out his checking account and he can’t make his montly payment.

Another tenant just started a new J.O.B. and is having trouble getting paid, so he can’t pay rent.


Mark: That’s good for you if he’s on a purchase option (very, very bad for him though).

At what point will you evict the J.O.B. tenant if they don’t pay? Personally I think I’d start the eviction proceedings as soon as they were one day over-due (and tell them its nothing personal, if they pay what they owe I’ll stop the eviction).

I like the idea of providing affordable housing (lower cost to buy the properties, you help people find decent housing at a reasonable price, etc, etc) but I think the reality of having people stiff me on a regular basis would get me down (and if you built this cost into what you charged people, you’d then get accused of being a slumlord and exploiting the poor).

My condo is a non-luxury, decent working person’s place to live. I’m hoping that’s a good demographic to target.

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