In
1962 my father sold his business and decided he needed to invest some of the
money. So he bought a 1920s-vintage stucco house a mile and a half from ours,
figuring he’d rent it out for a steady stream of income. That wasn’t how it
worked out.
The
place needed some work before it could be put on the rental market. Some of it
— plumbing and wiring — had to be contracted out, and some of it we did
ourselves. I have a vivid memory of going to that house with my mother and
spending the better part of a few very hot summer days painting the interior.
For
some reason I can’t remember the name of the first tenant. It was a family, and
the man was in his late thirties or early forties with curly brown hair slicked
down, as was the standard at the time. He used to drive over to our house on
payday and settle in cash.
After
a few months the paydays seemed to become less frequent, but when he had a good
day at the track he’d come by and pay the rent — or part of it, anyway. For a
couple of years he was chronically behind, but always managed to pay just
enough to keep my kind-hearted father going.
Then
one day the tenants up and left without any notice, leaving the place in need
of repairs and my parents in the hole for a couple of months’ rent. There was
another tenant after that, I recall, and the story was similar in its general
outlines. My father decided he wasn’t cut out for the landlord business and
sold the house. I had overheard enough snatches of conversations between mom
and dad to conclude from the experience that I, too, would never be a landlord.
Stuff
happens, though. Linda’s mother died recently after a long and full life, and
we inherited her house. It’s a nice little place, but it’s in a location awash
with foreclosures, which are depressing the market. Selling it now would be a
bad move, so we have become what I swore I would never be. We are now
landlords.
Even
with a professional property manager, the landlord situation is putting a lot
of stress in our lives. The ubiquity of foreclosures referred to earlier means
that many of the prospective tenants out there have gone through foreclosure,
bankruptcy or both. Even with decent jobs, they are just one income shock away
from falling behind on the rent. If one of the kids needs an unplanned doctor’s
visit, or one of the parents gets ill and loses a couple of weeks of work —
well, their problem becomes our problem in a hurry. It’s as if the ghost of my
father’s tenant has come back to haunt us.
At
times like that, I try to maintain my serenity and gratitude. Our problems are
not as serious as the tenants’ and at the end of the day we are fortunate
enough to own that house. Eventually we will sell the place and put the
problems behind us. Still, there are enough mornings where, at 2 a.m., it’s
hard to focus on the big picture.
I
was right as a kid when I decided I didn’t want to be a landlord. If you’re
considering it, I would strongly suggest that you not go into the business
unless you have a certain minimum number of units, say 12 to 15. The tenants
who are paying at any given time will generate enough cash flow to allow you to
sleep like a baby. Perhaps that sounds like Mitt Romney advice, but then that’s
my point.
