This being a help forum, and me being a newbie to this and this forum…I have heard a bunch of success stories with investing in property. Its like the gambler your hear only how much they won, and never much about how much they lose.
Im putting this out there for the more experienced property investors that have been through this over and over again. Can you tell us newbies some of your nightmares in property investing? From tenants? insurance claim? lemons? loss? everything and anything that though “hey wha that hell did I get myself into” I want to hear the other side, the NIGHTMARE side of investing in real-estate so maybe we can learn from your mistake and tread in different path or do more research on it.
Cheers
I think its important to have the failiures listed so you can be aware of what to expect.
Most of them are things that should have been little that got a lot bigger because they were left alone (poor property management)
The tenant who left and decided not to take his 4 cats with him .. locking them in a cupboard. Decomposing cats anyone? Not nice.
The leftover food once the tenant left attracted a COUPLE of cockroaches before it was found .. ok we lie .. can you think 30,000?
The ideal tenants who threw apples around in the back yard to break things .. and had mushrooms growing in their couch.
The property manager is told about gutters that need to be cleaned .. no action. Eighteen months later .. an inspection notice points out the fact that the gutters are now rotting and need replacement .. extended costing of 12k (it was multiple units so it wasnt THAT bad, but still expensive)
We installed a switch for outdoor lighting with a pop-out timer button. The tenants couldnt work within the timeframe .. so they stick matchsticks into the button to keep it on .. totally ruining the timer button.
Apparently the tenant left a non-functioning tap .. which was still leaking when he moved out. Received the bill on an empty flat for 4 swimming pools worth of water usage (about $600). NOTE : Make sure taps are off after tenant has left property.
Hey Xdrew
thanks for sharing, seem to me like property management of getting him to check up and getting the right tenants in was a problem. Thats where I think I would have a lot of trust issues is with property management. As I like to do things hands on instead of relying on someone else to do the job. But as most case people just don’t have the time micromanage their properties resulting in something thats ends up costing the owner money. So, with all that said, I’m guessing landlord insurance would have paid for everything? So overall, your still sticking with IP, you must be doing something right!Even though IP seem like a great idea to me….im assuming its a hell of a lot of work for upkeep, tenants, and dealing with property management.
Cheers
The tenant who left and decided not to take his 4 cats with him .. locking them in a cupboard. Decomposing cats anyone? Not nice.
That tenant should be locked up – words can’t describe how horrible that is. It’s sad that people like that exist.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Hi yuley,
As with most things in life, it is the people that make the most dramas. Getting a GOOD Property Manager is every bit as important as a good Accountant, Broker, lawyer, etc. Good property managers will usually be found in good RE agents – but not always. We had a cracker PM who worked for a no-hope RE agent. We stuck with them BECAUSE of the PM. Once he left them, so did we.A drama that occurred for us was when we went through an exceptionally wet period – we got eight months of rainfall in just FOUR days. Though our place had long-run corrugated iron, the intense rain managed to belt its way through the seal around a pipe that vented through the iron. We ended up with drenched carpet and lost a tenant (his leather furniture was growing mouldy with all of the moisture in the air). The Insurance covered replacement carpet and lost rent so, the result was as good as could be expected.
On another occasion (a different property with a different agent), a departing tenant had left a stack of little problems (writing on walls, garbage throughout the garden, house filthy, etc) The RE agent supposedly arranged a professional clean, but we inspected a week later to find filthy toilets, cobwebs on curtain rails, etc….. On approaching the RE agent’s new PM re the $350 spent on “cleaners”, their attitude was “Well, it wasn’t you that paid for it (as it had come from the retained bond monies).”
Totally NOT the point !! We dismissed them on the spot, and left in search of a PM who appeared to care a little bit !!
One major problem with PM’s (and all staff of any company) is that they can “move on”. So, if you have found a GOOD PM, be in touch regularly with them. Then, you may get to hear from them “Oh, I am moving on soon” – and can maybe follow them as they move.
Good idea for a thread, Yuley – I look forward to reading others’ stories,
Benny
Nightmares:
tenant died in a property – I had the agent push her under the rug hoping no one would notice but that didn’t work. I did let her out of the lease though.Off the plan came in short on the valuation – luckily I terminated the contract sucessfully. But the worry and waiting left me with many missed opportunities.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Hey all some bad stories there can be some scum bags out there
My biggest mistake so far has been buying a property through a buyers agent for a pretty high price in a mining town and leaving myself with little equity to keep moving forward, but the real kicker is the property was valued at $52,000 less the oringial bought I got a $18,000 so total loss of $34,000 and there has been massive delays and rents not where I was first told
So my experience is get educated and find good deals and get a good team behind you and don’t leave your self short as it’s not a good feelingDaniel
I’ve always gone about my PI with my business hat on but there was tenants I had who split up. She left and took the kids and he stayed in the property and gradually got behind in rent – the fixed lease was up in 6 weeks so was not going to renew his lease.
He gave a sob story to the PM about how he was in a bad way from the break up, got fired from his job and had no family he could rely on. He promised to get his act together and had found a new job and said the rent could be taken out of his wage and paid directly to the PM without him seeing it, much like the centrelink arrangements.
Rental vacancies at the time were a little high and he must have caught me at a weak moment because I agreed to it and he seemed genuinely remorseful. So I signed him on to a 6 month lease. All was fine for about 10 weeks then the rent stopped… He had gotten fired from the new job. Long story short, issued the NTV and the coppers had to remove him in the end. Place was a mess, broken windows and door locks. Luckily, had LL insurance in place and made a claim. All worked out OK in the end but was without rent for a good while.
Kinnon Bell | Kinetic Funding
http://www.kineticfunding.com.au
Email Me | Phone MeMortgage & Personal Loan Broker based in Cairns and Melbourne but servicing clients Australia wide.
@ Daniel
that sucks. I actually have thought of going throughout a buyers agent to look at the best deals and area that I can purchase in. Seem like there are bad seeds everywhere, hard to know who to trust.@terry
Never really thought that would happen, until it actually happens to you@kinetic
Even have problems making a claim?? I know this one guy that had his apartment trashed by his tenants over the term of the lease, and he tried to make a claim and the company says because they happened at different times you have to report them at different times, with each report is a excess claim of $700. I think he had to make 6-7 claims, lucky for him he knows a lot of people that give im repair quotes that over valued his cost so he can get some of the money back.All these great stories to look fwd to lol
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yuley7575.
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