Tenant and Property Issues

Managing rental properties is great when everything is rented and your tenants are paid up. On the other hand, when something does go wrong I never seem to have just one problem. I guess whoever said "When it rains, it pours" was right.

Right now I'm dealing with issues at three of my properties. The one that seems like it would be the easiest to fix is at one of the townhouses. The fascia board and attached gutter have come loose from the house. Probably a result of all the rain we've been having. Since I don't have a ladder that's tall enough to reach the second floor roof, I put an ad out on Craigslist seeking bids. I had about 10 people respond but the person I selected was a no-show. I'm now waiting to hear back from the second person. No one seems to have the sense of urgency that I have.

The second problem is one I've dealt with many times before: a tenant who is behind on her rent. I'm crossing my fingers that she pays her July rent before the August rent is due. She's a decent tenant so I hope this is just a one time issue. What I don't like are all the excuses. I've always been taught that you should have six months living expenses set aside for a rainy day. Tenants inevitably live month to month.

The last issue is an empty condo. I lost my tenant due to a leak from the neighboring unit that caused some very minor damage to my own unit. Rather than deal with the threats of legal action I let the tenants cancel their lease. The problem has been fixed but it wasn't worth the hassle of tenants who insinuate that the problem is causing their infant children to have respiratory issues. I've spent the last two weeks repairing the problem and detail-cleaning the condo. You could eat off the floor now... I'm really proud of the job I did cleaning up after them. Normally when I put an ad on Craigslist I get 10-15 potential tenant responses within 24 hours. This time I've only received one and, frankly, her email scared me.

Thus goes the world of landlording. Right now my cash situation isn't an issue but it certainly could become one. With two of seven properties not generating income it wouldn't take long for me to start sweating.

Frugal Summer

I've kept myself entertained lately by seeing just how frugal I can be. Yesterday, for example, the high was only 90 degrees, so I decided I wouldn't use the air conditioning. On other days I have imposed a 4 hour limit: from 5 PM until 9 PM I reward myself by setting the thermostat to 80, then turn it back off. It's late morning before the house starts warming up again. I've also been leaving the house as little as possible. This helps me save gas and avoid the temptation to spend money. Finally, we're trying to cook almost everything at home this month instead of going out to eat all the time.

I barely feel like I am sacrificing. Sure, it was warm last night, but that encouraged me to drink more water. Boredom does have a way of sneaking up on me. I've eased some of it thanks to the local libraries and watching streaming movies on Netflix. I've also been exercising in the morning more regularly with all this extra time I now have. Really the only place I am splurging is in the travel department, and even there I'm pinching pennies.

You might be asking why I am living like this. Well, I want to pay off all my debt, especially the mortgages on the rental properties. If I can get rid of all my debt I will be able to live a very comfortable life on the rental income. If the electric bill is $40 instead of $100, that's $60 I can use to pay off my debt.

My Frugal Miser - June Expenses: $3,840

I am not very thrilled by my spending in June, but I'm not surprised, either. I spent $352 for gas but I did travel twice to Tampa. I also spent $432 on food, which is the most I've spent in a very long time. A big part of that was from eating in restaurants while we were out of town. I also spent $528 on three flights to Vegas for later this year, taking advantage of their 40th birthday sale.

June Expenses

$275 Auto ($352 for fuel, $66 for service and a $143 refund on insurance from removing the G5)

$0 Bank Fees
$0 Clothing
$432 Food
$134 Entertainment (movies, gambling, alcohol)
$0 Gifts Given

$42 Household

$860 Homeowner's Insurance
$100 Health Insurance
$0 Medical
$133 Interest on Debt (not including Mortgage Interest)
$0 Miscellaneous
$411 Mortgage Interest (primary residence)
$787 Mortgage Interest (rental properties)
$20 Personal Care

$0 Subscriptions
$+144 Taxes (state tax refund for 2010)
$198 Utilities
$693 Vacation

Total June Expenses : $3,840

Notes

• My food budget was really high but I did stock up on some sale items which should help reduce my food bill in July.
• The biggest opportunity for savings is the mortgage interest expense, but it will take some time to do something about that. Stay tuned.

My Frugal Miser - June Income: $2,832

June was an okay month for income, but since I reduced my rental income by the property insurance bills I paid (instead of just showing them as an expense), it doesn't look very good. I also had to refund the June rent to one of my tenants due to a neighbor's water leak - and I'm losing the tenant permanently. Hopefully I will recover my losses.

June Income
$35 Mystery Shopping
$1,058 Rental Income

$1,740 Other Sources

$2,832 Total Income for June


Notes:

• The category "Other Sources" includes non-recurring (or semi-recurring) income since I always seem to have a little something that doesn't fall into the other buckets. Last month the majority of this came from things I sold as well as a "gain" from selling my car.
• I earned more from mystery shopping than $35 but I spent a good bit in June that will be reimbursed later, offsetting those earnings.