Not exactly home repair, but here's what I'm up against.
Last year my wife and I had some inheritance money to spend so we
bought two ca. 1890 houses in our community...but ended up taking out a
home equity loan on our house to pay for repairs on the two houses.
House #1 cost $50,000 with about $15,000 in repairs, some things still
to be done. (Value of house today, I estimate at about $80-85k).
House #2 cost $32,000 with easily $25,000 in repairs. (Value of house
today, I estimate at about $75-80k).
We decided to rent out the houses for a year or two cause the real
estate market currently sucks, especially in this older suburb of
We rented to friends from church whom we knew were having a hard time.
We have a lease with $700 rent, not including utilities. (I would say
that rents in our community are about $700-$800 right now for houses).
If the rent is paid in full, we have a profit margin of about $200 for
each house, which doesn't include repairs/improvements or paydown on
the principle of the mortgage (does pay mortgage interest).
Both tenants have been late with the rent almost every month and we've
only received one half of one house this month. I sent a certified
letter reminding them that the terms of the lease will be strictly
enforced from now on and that unpaid balances needed to be paid
immediately. We also gave one tenant $100 for Christmas and offered to
reduce the rent on the other house from $750 to $700.
Still no payment. Tenant #1 has not said anything in response to the
letter; tenant #2 left a snotty voice mail on my cell phone that there
were repairs that I had not performed but that basically I "will be
getting my money." The discount on the rent was not mentioned. I"m
Both tenants, on a positive note, do take care of the houses. One
even did some concrete work this year (but also called the health
department about lead paint...which was really stupid).
Anyway, I needed to vent a little but will appreciate any advice that
you guyz can give.
Dean in Cincy