Learning to Landlord (Unit B)

At the closing of escrow Unit B, a 3 bedroom 1 bath unit, was already occupied. After having done the physical inspection of the property and before having purchased the property I felt that this tenant would have to be evicted eventually. The house was a mess, they had a pitbull, and they regularly left alcohol bottles and cigarette butts at the entrance of the duplex.

After purchasing the property I softened my stance a bit and decided to give them the opportunity to change their ways. This also allowed me to have some sort of cash flow, to cover the mortgage, while the repairs were made to Unit A. This worked while the repairs were made, but after they were complete the property management company had trouble renting Unit A. They advised that it was best to give the tenants in Unit B notice immediately. Since Unit A had gone two months without having been rented I assumed something must have been unappealing about the property. I personally went to the property and inspected the interior. The interior of the unit was fine, but it definitely was the neighbors that were the problem. Unit B had taken over the entrance to the duplex and set up chairs and tables to drink and smoke. It would make it very awkward for any tenant to enter their own home. The green light was given and the tenants were given the notice of eviction.

Property management indicated that this could be a long drawn out eviction. It is not uncommon for the sheriffs to be called to enforce and eviction. While this speeds up the process it is also quite costly. I have heard in Bakersfield it is about a $500 fee. The tenant promptly moved on his own that same month. This was a surprise, as was the state he left the unit in. It was hard to believe anyone could live in those conditions. The tenant even had the audacity to ask for his deposit back. Fortunately after only 2 weeks the tenants moved out willingly. Unfortunately, they could not have left the apartment in worse conditions. The filthy tenants left furniture, trash, cats, and insects in the home. It was not a pretty sight. I won´t even begin to get into the odor.

The apartment took an 8 hour day to clear and the handyman charged me $100 dollars for the work. Taking the trash to the dump costed the usual $45 per dump. The next day it took the handyman half a day to remove the carpet. Underneath the carpet there were stains and what can only be described as scum. This was likely from the cat urine that the tenants had refused to clean. This being the likely cause of most of the odor, it had to be removed. The kitchen had laminate flooring that also needed to be removed and redone. I decided to get my hands dirty on this project and came in to work two days on the weekend with my handyman. The tools and products used to fix the unit were all purchased at Home Depot.

The materials included …… . The laminate used costed …… per foot. The entire house was covered in laminate as I believe it is a wise alternative to carpet. It does not stain like carpet and it is possible to keep after a tenant leaves the unit. As I´ve stated before, I believe is the best and most economical form of flooring in the long run but it costs the most up front. It is also very time consuming for a single handyman. The entire remodeling of the unit took approximately two weeks.

I learned a great amount from this unit, from dealing with tenants to refurbishing the physical apartment. It is important to be upfront with the tenant from the beginning. There can only be very little leniance when the tenant does not follow the rules of the property. It is better to remove them entirely and start anew when they are not your preferred tenants. I also advise that all landlords take some time actually working at their properties. The manual labor I did with the handyman that included removing carpet and prepping the floor for laminate was eye-opening. Without getting too far into specifics, it can save you loads of money if you learn how to make simple repairs. It also very satisfying to see the fruits of your labor. As a new landlord get to know your tenants from a distance and be sure to work on your property.

Learning to Landlord (Unit A)

After closing on the property Unit A was already vacant.  Unit A is a 2 bedroom 1 bath unit that has its own laundry room around the side of the house. The unit has windows facing out on all sides and a rather large front yard.  Before leaving the previous owner had cleaned Unit A fairly well.  It was definitely not rentable in its state but it could have been far worse.

We conducted an inspection of the unit and came up with a list of all of the repairs that would have to be made to make the unit rentable.  The to do list was fairly extensive.

TO DO:

–  Replace carpet

–  Replace broken window

–  Mesh screen for windows

–  Purchase/Install blinds for 6 windows

–  Patch up tub in the bathroom

–  Kitchen stove barrings

–  Paint the entire interior of the unit

–  Purchase/Install kitchen cabinet

–  Install counter tops for the kitchen bar

How?

While these repairs may seem easy when written so concisely, each item is more complicated than it implied.  It is important to have a plan as to what is going to be fixed and in what order.  For example, the entire unit first had to be painted before replacing the carpet.  To have the handyman save time a spray gun is used when painting.  While more paint is consumed, I believe the amount saved in labor costs and time makes up for the paint.  This also allows the handyman to focus on other projects for the unit.  If the new carpet is installed before the paint is complete, you risk staining the new carpet.  That is a headache one can easily avoid.

Replacing the carpet does not simply include purchasing and laying down the new carpet.  The old carpet must first be removed (and disposed of) before the new carpet can be placed.  This new carpet must have the correct measurements to make sure it fits properly and to be sure that you are not overcharged because extra carpet was purchased.

To remove the current carpet and install new carpet I chose to use a company that specialized in this work.  The total cost would be $800 for the removal, disposal, and installation of new carpet.  This work would all be completed in a single day.  It is often better to use a company that specializes in carpet installation as they can get prices on carpet.

Each broken window costed about $50 without installation.  Windows are easy to install on their own so I chose to do the work myself.  The blinds were each about $25 and I also chose to do the installations.  This is simple work that saves plenty of money on labor costs.

Patching up the tub in the bathroom was a tougher issue.  If water leaks into the wood under the tub it could cause a mold problem.  Once the mold spreads it is likely the entire bathroom’s foundation would have to be removed.  This would be a costly expense so it was very important that the hole was sealed properly.  I left this work to the expertise of the handyman.  They recommended the tools and materials that would be need and then sealed the hole.  The same was done for any holes in the walls.

The bar in the kitchen was one of the costliest expenses of the rehab of the unit.  The purchase was made at Home Depot after having done the measurements of the size that was needed.  There were not exact sizes of the material available so the handyman had to cut the material himself.  The entire work was finished in a day.

Discounted Material

The kitchen cabinet that was purchased was found in the discount area of the local Home Depot store.  Both Home Depot and Lowe’s have a certain aisle where they place reduced items.  Oftentimes great deals can be found in these areas.  Newly discounted items are placed everyday and they can range from a new shower head to a laundry machine.  Every time I visit these stores I visit this aisle for discounts.

All of the material purchased for the rehab, except for the carpet, was purchased at either Home Depot or Lowe’s.  I recommend applying for a credit card at either or possibly both.  These credit cards usually come with a payment plan that allow interest not to accumulate for anywhere from 3-12 months on purchases over a certain amount.  These are great if you want to use the money from the rent to pay off the cards.

Rehab Complete

The entire rehab was completed in less than two weeks.  The projects can likely be completed quicker if another handyman is hired.  Upon completion the entire rehab costed roughly $2,000 including labor costs.  The unit is to be rented at $650 so one can see how quickly this can be made up.  While initially this rehab price may seem steep, it was nothing compared to the cost of rehabbing Unit B.

Learning to Landlord

Purchasing your first property is a very stressful experience. After escrow closed I felt very relieved and was ready for the next step in the process. I will explain my situation immediately after having acquired the property.

The Units

My duplex had one tenant currently occupying my larger unit which had 3 bedrooms. The other 2 bedroom unit was vacant but in need of some repairs. During the inspection of the property I found the tenant to be extremely dirty and a major liability. The house smelled of cat droppings and marijuana. They had beer cans thrown directly outside of their door and they also had a pitbull. Dogs are a definite liability and I believe landlords have a very difficult time insuring a property with those types of animals. Nonetheless now that I was the owner of the property I thought it´d be best to give them an opportunity to stay in the unit. It was made clear that they had to get rid of the animal and that they would be held responsible for any trash on the property.

The Lot

The lot itself was rather large with amples space in the front yard and backyard with an open parking garage.  In the front there were two dry trees that needed to be cut down, and there was plenty of drying grass.  This could all be fixed without too much trouble but with money invovled.  The problem with this parking garage was that it was not fenced around.  In this part of town this means that there are habitually vagrants walking through the lot and that there is illegal dumping constantly. 

In a matter of two days I had my go to handyman chop down both of the dried trees and clean the back lot of any trash.  I was given a very good price for both days of work and the place immediately looked far better.  In total it was about $300 including both days of labor and the cost of trash dumping which is approximately $45 per dump (a truck and gas is also needed).  This did not include the cost of the saw that was approximately $400 but that will obviously be reused in the future.

Now that I had taken care of the lot, I needed to begin working on the state of each unit.  I´d see that one unit would need more work than the other but I was ready for the challenge.  I will explain the work done to each individual unit in my future posts.