Why be a slumlord? Because it’s very easy. The less you do on a rental property the less money you spend, the more short term money you get, and the less time you spend on the property. That sounds great in the short term but then you end up with a tear down. I am not a slumlord. That means I spend more money, get less money on a short term basis, and spend more time on the properties. I don’t want future tear downs. These last few months I had to prepare 4 vacancies for rent, three in the last 3 weeks, and many repairs also popped up. I have been swamped because I do most of the preparation and repairs myself. That has given me little time to write on this blog.
About a week ago I was installing a built-in microwave that went bad and thought to myself how much I would be charged to outsource that job. My guess would be about $150. Then I thought about all the other stuff I had done to get that property ready for lease and its probable cost if I had outsourced the labor. Below is the breakdown:
Install Microwave: $150 labor; $400 for microwave
Paint 3 bedrooms, 1 Hallway, 1 bath, plus baseboards: $1200 labor; $150 for materials/paint
Caulk baseboards and ceilings on about half the house: $300 labor; $30 in caulk tubes
Take out large Mirror and replace with double single mirrors: $150 labor; $70 new mirrors
Clean Gutters: $100
Mow and edge lawn (big yard): $70
Paint and install all door knob hardware: $150 labor; $7 in paint
Applying Tile Sealant on all tile: $200 labor; $60 for sealant
Replace old faulty toilet: $150; $110 new toilet
Paint all closets and pantry: $400; $30 for paint
Change out faulty exhaust fan motor and light switch: $200; $20 for fan and switch
Patch large cracks with cement on front porch steps: $80
Fix Garage door sensors: $100
All together we have a grand total of $3250 for labor that would have been spent to get the property ready. But wait there is more. I outsourced professional cleaning at $160 and carpet steam clean at $165. The carpet despite the steam clean still showed many stains so I opted to install new carpet for 3 rooms at $1050. All in all if I outsourced all the work done I would have been spending about $4625, plus materials of about $877, for an ultimate grand total of $5502! Geez…why even go into the real estate rental business? Well, as for me I saved about $3250 by doing all that work myself but did I really save? I spent so much time on all day weekends and late evenings trying to get things done. I have to wonder?
And this is just one vacancy. Now imagine the time and money spent on the others. Now granted not all vacancies are so labor/cost intensive, some less, some more. But all eventually will be as intense or even more intense when bathrooms and kitchens need updating. No wonder we have slumlords.
I imagine some landlords who have to outsource all the labor, attempt to do the minimum and not fix faulty items because of the high costs. They may not have the money or do not want to spend the money. In a few years, one day they look in the mirror only to find out that they have become slumlords. Then they may hide behind management companies. The management companies hold the burden of all the complaints but can not do anything unless the landlord offers money to correct an issue. The management company has a list of excuses why a problem can not be corrected or they lie and say it will be corrected but never do.
I just gathered all my information to do my taxes. That is the only place I see some type of relief for all the work and expenses done on all the properties. All repairs are deducted from our taxable income which is an added help during tax time. Maybe it’s not so bad being a landlord afterall. Maybe.
There are big ticket stuff like two years ago when I spent $14,000 on new siding on another property. Then there are the small costs here and there that add up to big numbers. I have boxes full of receipts. I have a contractor account at Home Depot and Lowes. Sometimes my clothes are covered with paint, grime, and dirt. My van is full of tools and debris. I take calls and correct problems on a constant basis. I do not hide behind management companies but sometimes I wonder if I should? Everybody thinks its easy. I say its not and they don’t believe me. Being a slumlord is easier. I am not one of those.