For the first time, I experienced one of the things that most landlords dread.
A tenant did not submit a rent payment!
It’s dreaded because some landlords have a mortgage and may not have enough reserve funds to cover bills like insurance or property taxes without receiving the monthly payment.
Yes, I have a tenant who is using the Housing Choice Voucher Program (HCHV) and I didn’t receive payment for 3 months. Yes, from July through September, I didn’t receive rent money. My first thought was to panic, but I know I have a great property manager and a responsible tenant so the panic didn’t last long.
The tenant did what she was supposed to do in a timely manner. I called myself and spoke to several employees at the HUD office responsible for the area. During my calls, I found out they were experiencing a lot of turn over and my tenant’s case worker changed about 3 times before the issue got resolved which is what caused the tenant to be behind in rent.
When it was all said and done, I received back pay and I’m glad I didn’t go through the process to evict the tenant because it wasn’t the tenant’s fault. I’m also glad that I had a reserve fund to cover cost when things like this happen.
Bottom line, just because you have rental properties that are cash flowing doesn’t mean that you won’t experience difficult times and you must prepare for them.
A couple of months ago, I wrote a blog post about receiving a message from my Property Manager. The neighbor’s dog had come upon my porch and tore up the carpet.
That was in August, it’s now October and my Property Manager sent me a text of what the porch looks like now.
It is decorated beautifully for the fall weather. It looks like a porch you would see on HGTV. It has a dark brown carpet now. The tenant decorated a couple of end tables with orange and white pumpkins on them. She also has a scarecrow and fall welcome signs.
It’s all so tasteful and I couldn’t be more pleased to have someone taking care of my property. It has a special place in my heart since it was the first home my mom bought and paid off. As long as I own it, it will always remain part of our family.
If you read the first part of this story, check out the blog post.
I honestly don’t know how other long distance real estate investors handle work orders from their tenants.
I wrote a blog previously about how valuable having a property manager has been to my team.
Today, I received a text from my Property Manager. I’m thinking a bunch of things like is the tenant okay, was there storm damage from Hurricane Ida, etc.
Low and behold, it was about the stove. The stove wasn’t connected properly and a part burned out. Go figure!
No one was injured. The property is still standing. The stove has been repaired and I reimbursed her the amount that she paid for the part. Luckily, I purchased warranties on all the appliances I purchased or that may have hurt my feelings and my pockets. 😂
My advice to anyone who is considering buying long distance real estate rentals or just investing in rentals in your neighborhood, try looking into getting a property manager. The service they provide to you is worth the money.
Back in 2019, I decided to invest in a rental property in Detroit, MI with an investment club. I found the leader of the group via YouTube. I had been watching her videos for a year and I liked the information she was putting out regarding business and making your money work for you.
I know there are questions people want answers to like:
1. How do you know if you can trust that person?
2. How often will you receive your portion of the profits?
3. How long will you own the property?
Truth, I didn’t know if I could truly trust that person, but we have a contract signed with all owners that lays out everyone’s percentage and how often monies will be disbursed. There is also a clause about what happens to the property after so many years. When you think about, even if I had a personal relationship with this group of investors, I would still want a contract.
Fast Forward to Present Day!
I’d like to say that it’s been a learning experience for sure. Some things have gone well and some things have gone not so well. Let me just say, I’m so glad I didn’t pay a whole lot of money.
First, we didn’t really get payouts every quarter because the tenant stopped paying rent. Yes, before the pandemic happened the tenant stopped paying rent. It’s a sad situation because the group is being told that the tenant is not affected by Covid-19. She’s still working and not paying rent.
The owner of the investment club posted a video on YouTube about the experience. I’m linking it below