Hope for your financial life and beyond

Our Nightmare on Rental Street: Lessons From Evicting a Tenant

My wife and I have long enjoyed the benefits that come with owning rental real estate. The extra income each month has given us freedom within our monthly budget to fund things like our personal mortgage payoff, vacations and other investments. Granted it hasn’t been the easiest side hustle and we have learned many lessons along the way. One of those was the process we had to go through while evicting a tenant.evicting a tenant

Evicting a tenant is one of rental real estate’s darker sides. No one ever thinks they will have to do this when a tenant signs the rental agreement. We trust our background research and intuition about the person we’ve selected to fill the property. And we expect the tenant to honor their part of the rental agreement.

We provide them with quality lodging. They pay us for that service. That’s how this business is supposed to work. So, what could possible go wrong with such a simple arrangement?

Actually, plenty can go wrong. Especially when the tenant sees an opening they feel like they can take advantage of.

This is our story of how we dealt with a tenant who refused to pay his rent, how we went about evicting him and the lessons we learned from it.

[Read more…]

Home Maintenance Items Landlords Should Do Between Tenants

As a landlord, I would love to keep tenants in my properties forever. While some stay a long time, most eventually leave to seek housing elsewhere. This is either by personal choice or through an eviction. Whenever that time comes, it’s the landlord’s responsibility to conduct some home maintenance and get the unit ready for the new tenant.

home maintenanceTurning a rental house around for the new tenants can be a time consuming and financially draining time. Hopefully, as a conscientious and aware landlord, you’ve kept track of what is going on at the property and have a good idea of what to expect in terms of potential home maintenance. There really shouldn’t be any surprises, but it seems like there always is.

Because even minor renovations will cost money and require time to complete, some landlords choose to skimp on or refuse to complete repairs. I disagree with this philosophy. As much as possible, I want the property to be in really good condition for the new tenants so that our relationship begins on the right foot.

Tenants need to know that you are a landlord that prides themselves in the condition of the unit and wants to treat them well. Hopefully your attention to detail and professionalism will bleed into the tenant’s mind and they will in turn do their best to keep the property as clean and damage free as can be expected.

Home Maintenance to Conduct Between Tenants

Some repairs and home maintenance will obviously be required before the new tenant moves in. While all facets of the house need inspection, these five areas are a must for any landlord to address:

[Read more…]

4 Reasons Why Paying Off the Mortgage Early Was Right for Us

Paying off the mortgage early is a hot topic when it comes to money management. There seems to be a good amount of quality logic for keeping it and equally valid logic for paying it off early. So what’s a homeowner to do?

paying off the mortgage earlyAfter we bought our first house, I began to look into this issue. I read many opinions and ended up agreeing with the major arguments for NOT paying off the mortgage early. These points seemed solid to me. The logic goes like this:

“You have such a low interest rate.”

“You could invest instead and get a better rate of return on your money than putting into extra mortgage payments.”

“More of your money is tied up in your house and you can’t get to it for a big emergency.”

“You are getting tax breaks for carrying a mortgage.”

“A mortgage is a hedge (protection) against inflation, especially with a fixed rate mortgage.”

Then during 2010, my wife and I went through some life changes. We began to rethink many money related things including our mortgage. After a lot of back and forth, we decided to pay off the mortgage early. The reasons may surprise you because only one of them is based on a mathematical concept or equation.

[Read more…]

How to Increase Your Number of Rental Properties Without Losing Your Mind

rental propertiesI’ve written here from time to time about the advantages of owning rental properties. Owning property that other people pay you to use is a great investment that can have significant long-term benefits. Not only do you get extra cash flowing into your monthly budget, but the diversity it brings to your investing portfolio can be very comforting. While stock markets can fluctuate wildly, property generally maintains its value over time.

There comes a time though, when you might be ready to expand the number of rental properties in your portfolio. That first one is the hardest to get. But once you get comfortable with knowing how to run a rental business and have more cash on hand, you may want to increase your number of rental properties.

That sounds like a solid plan in theory. However, with more homes comes more responsibility. The added properties can mean an uptick in maintenance costs, more time spent supervising your rental business and more headaches from problem tenants. These issues can add additional stress to your already busy life.

If this seems overwhelming and gives you pause, never fear. You can successfully add properties to your portfolio. Below are some tips for keeping you sane while building up your rental portfolio.

[Read more…]

How to Be a Successful Landlord: 5 Best Practices

I love owning rental real estate! When I purchased my first property eleven years ago, I mistakenly payed a bit too much for it. Initially, didn’t know how to be a successful landlord and I let my excitement cloud my judgment when buying that first property. But I simply wanted to get started – that was all I cared about.

how to be a successful landlordI’ve learned many things since then and survived my share of dark moments as a landlord, including living through my first eviction. Ending up in front of the county judge to settle that dispute was frustrating but valuable all at the same time.

Nobody should become a landlord without doing some serious reading on the subject. That will help eliminate some mistakes you could easily make.

Related Content: 5 Common Rental Real Estate Mistakes You will Make

But head knowledge can only take you so far. Some things are only learned through experience. So based on what I’ve been through, here are my best practices for how to be a successful landlord. If you follow these, your experience will be much more enjoyable and profitable.

[Read more…]

5 Practical Ways to Save Money When Renting an Apartment

Renting an apartment can be quite a challenge. Whether you are moving out of the house for the first time, trying to cut housing expenses, or simply looking for a short-term housing option, there are many things to consider. Perhaps front and center of all the considerations is price point. How will you fit the apartment expense into your monthly budget?

renting an apartmentLiving on a budget while renting an apartment requires planning and dedication. From drafting the monthly spending plan to minimizing your expenses, there are many details to finalize if you want to save money. 

However, with careful planning and a touch of financial savviness, you can save money without sacrificing your lifestyle. To help you with that, here are 5 practical tips that will help you save money when renting an apartment. 

[Read more…]

Refinance Your Mortgage Now While Rates Are Still Historically Low

A home purchase is one of the most exciting and expensive financial transactions a person will make. Because homes cost so much, most people choose to buy one by getting a mortgage. They borrow money from a lender at an agreed upon interest rate for a designated length of time. When the loan is paid off, the house is legally theirs.

refinanceThe rate lenders charge for interest on a mortgage does not stay the same. They fluctuate, sometimes even from day to day. Because they can change frequently, Person A may end up getting a lower rate than Person B. It seems unfair that one person could get a better rate and save money just because they had better timing on their home purchase.

That’s where refinancing comes in to play. If done properly, it can end up saving homeowner’s money in the long run.

[Read more…]

6 Ways We Survive the Dark Side of Rental Real Estate

My wife and I purchased our first home to be used as a rental property seven years ago. That move was the culmination of several years’ worth of reading about and planning to own rental real estate. It took us that long to feel knowledgeable and confident enough to put a plan into action that would earn us a steady income stream aside from our normal careers.

For the most part, our experience has been a positive one. In fact, I’d say overall it has been great. However, we have had our share of challenges along the way, like:

rental real estate…an unexpected new well we had to drill and install (that was pricey!)

…leaky copper pipes that had to be replaced in an entire house

…a dual tenant situation where one roommate left, leaving us with half the monthly revenue stream on that property until another roommate could be found

…tenants who don’t inform you of repair issues in a timely manner (“Really? It’s been leaking how long?”)

…tenants who won’t pay on time, or ever

…tenants, who by their actions force you into court (that’s a post in itself!)

…managing the finances to account for repairs, taxes and the house that sits vacant for months while you do said repairs or find a new tenant

…dealing with the emotions that come when facing these tough circumstances

…the time it took away from our already busy schedule to take care of all this

Are you prepared for all that and more? If you are game, then I have five suggestions that will help you manage through some of the dark times that will inevitably come. And I’ll tell you the sixth thing we’ve done recently that has taken our rental real estate business to the next level.

[Read more…]

Your Mental To Do List Before Starting a Room Addition

So you’ve made all your plans and crunched the numbers and are finally ready for a room addition. That’s great news! But are you sure you know what to expect for the next couple months?

room additionMost homeowners think they know exactly what is coming. The truth is that most people have not done a room addition.  Consequently, they overlook some of the details that are involved. To that end, here is a list of daily activities and truths involved with any room addition you need to be aware of.

Prepare For Dust

You need to prepare for the worst if you or members of your family have OCD (obsessive-compulsive disorder) or are used to very clean environments. Things will most definitely get dirty. Walls will be removed, electricity re-routed, grading and excavation among other activities that cause a lot of dust and dirt.

[Read more…]

4 Ways to Fund That Extra Mortgage Payment

For most people making one monthly mortgage payment is challenging enough. Why in the world would you want to make an additional one? Seems like that extra mortgage payment would be pushing the monthly budget a bit too far.

extra mortgage paymentWell, if you can see the bigger picture, the money you put towards an extra mortgage payment now can have significant impact on your long-term financial health. The more you pay and the earlier you pay it will reduce the amount of interest you owe over the life of the loan. You could be looking at tens of thousands of dollars saved in the long run.

If you don’t believe me, run your own numbers on any online mortgage calculator. You’ll be amazed on how much you can save.

Making an extra mortgage payment each month (or even a partial payment) takes a strategy. More importantly, it takes extra money. That’s where the real problem lies. When you look at your monthly budget you may be left scratching your head wondering where that extra money is going to come from.

Back when my wife and I decided to pay off our mortgage early, we faced the same problem. Here are the ways we came up with to free up some money to make that extra mortgage payment.

[Read more…]

Managing a Home While on Vacation: Do’s, Don’ts, & Money Saving Tips

Going on vacation soon? Then you will enjoy this post today by Hank McKinsey, rental property owner and blogger at Homebyhank.com.

Taking a vacation can be a fantastic way to relax and regroup from your daily and weekly routine. While vacations are exciting to prepare for, one thing that often gets neglected is your home.

vacationPrepping your home for your time away will ensure that it stays safe and secure, and things like pets or plants aren’t left without care. Vacations can be expensive, so it’s also important to save money during these preparations. With a few quick tips your home, pets, and garden will be happy even in your absence.

The Basics of Going Away on Vacation

Do’s

As part of your vacation planning you should make sure there is a system in place to help you keep your house safe and secure:

[Read more…]