So my ex husband thought buying a rental property was the answer to my joblessness (I was not jobless, I was a SAHM, homeschooler and had three kids.). Said rental property is a duplex I live in so I can't just sell the thing.
his adultery, ensuing divorce, property settlement, housing market crash, blah blah blah, now I am stuck with this house and its attached rental property.
Three bedroom, one bathroom, I pay water/sewer and garbage, provide free wireless internet, dry and clean basement (unfinished but nice), I do lawn care and snow removal. The most rent I have ever gotten at lease signing was $575 (and yeah that sucks.) but the house is in a bad-ish neighborhood (there is worse), there is no yard and only street parking. I do not allow smoking, pets and do not accept housing and will not work with agencies at move in. I have never had a tenant leave the house in good condition. Never given back any part of any deposit and none of the tenants have been surprised by not getting their deposit back. Several people I should have taken to court but it costs time and money to do that and you rarely actually see your money even if you win.
My last tenants trashed the place. Mouse poop everywhere (My cat kept bringing me mice, couldn't find the source of the problem. Found it.), two different kinds of bug infestations (one in the fridge....) the carpet is trashed but I was able to salvage it for one more tenant. total repaint. new toilet, medicine cabinet and shower head. some new windows. rewiring of a light. It is going to take a couple months and many many hours to get it back to a rentable condition. And so far it has cost me over $2000 just in supplies. And I have only gotten started.
My previous tenant was evicted when she hit $3000 in back rent and late fees (I should have kicked her out sooner but she was a single pregnant mom and it was Christmas). She left the place trashed as well. It took weeks of work, and about $3000 in repairs and supplies.
A few tenants before them wrote from floor to ceiling with highlighter. which is a solvent. and nothing will cover it (actually someone said to use a shelack based primer. sounds fun huh. We can't sand because there is lead paint) We can finally, after about 7 years, cover it with paint. And yes, it was trashy sexual things they wrote. yippy skippy.
After my next tenant I will have to replace the downstairs carpet to the tune of $1500. I have been showing it but the renter parade is disheartening. No one has a job, they all have a million kids, one guy brought his drunk friends (they had beers with them...didn't even offer me one) and tried to convince me they are quiet people who don't party.
I really worry about the quality of people living next door. I work full time and my kids are old enough to stay home. I have three lovely daughters and whoever lives next door will know my comings and goings and when my kids are alone. creepy.
So I got to thinking....$600 a month tops is what I can get for it.....minus income taxes and a higher property tax...probably $100 a month. Utilities that i pay, $50. Extra lawn care from people who don't care because they don't realize/care lawn and landscaping costs money $25 a month (i literally replace the same strip of lawn every year and have redone the front landscaping 3 times), repairs $250 (and this is really conservative). So my rent profit is really only about $200 a month. Then I did some checking. I could also get $100 a month in food stamps if I did not have the rental income. So really, if I let it sit I only lose about $100 a month in cash.
And this is all assuming I only switch renters once in a year and there is no lag between renters (bu there always is.) So far only two people have stayed longer than their one year lease (the last two who trashed it) and some have stayed as little as three months (yet still managed to trash the place...really, they are called a vacuum and a sponge)
I would also have better luck selling it if a tenant were not in there (it would be clean. I am sure it was never clean for a showing last time it was on the market)
Speaking of selling it....I got to thinking I want to sell my home just because I don't want to depend on rental property but for real, this is a cheap house. My mortgage is $775 a month. i have no equity. At the most I could walk away with $10,000 if I sold it well. (which is still less than we paid 10 years ago). I cannot imagine my house payment, on a $90,000 home would be any less than that and $90,000 in this craptacular neighborhood will get me a 3/4 bedroom with two bathrooms and about the same or less square footage I have here. my part of the duplex is 3 bedroom, 1 bath with a 4th non legal bedroom in the attic which is about 500 extra square feet. It will likely be legal before winter as I am bartering some electrical work. I think all it needs to be legal is a heater. SOOOOO all that rambling to say keeping it and ditching the renters is not different than selling it and paying for a single family home. right? or am I missing something here? (I still want to sell, i hate living on a corner lot)
So my question is....is this financial suicide? Can I really take a $600 a month hit and break even or is this wishful thinking? Is it morally objectionable to give up income and take food stamps? Even if the income is not really income.