A trip to the archives…

I’m old enough to remember when documents of any importance came on paper – often in multiple color coded carbon copies. For someone who has converted nearly wholesale to digital record keeping, I have an alarmingly large archive of old paper copies – old bills of sale, mortgage originations, and thousands of other 8×10 inch bits of paper that were required to build a life before everything came to us via electrons.

I recently had to take a deep dive into the furthest recesses of the paper archives – searching for something I know I’d need a copy of when the happy day comes and I go to closing on my southern Maryland condo. Yes, I know, cart before the horse and all, but I like having my ducks well-ordered.

Knowing how much has changed over the last almost twenty years, I assumed I was in for a bit of leg work – and possibly a pleading phone call to the condo association asking for a copy of the neighborhood covenants and restrictions. I mean what are the chances 22 year old Jeff held on to the copy he was given in the early spring of 2001?

Turns out I’m every bit as anal retentive as people think I am. After five moves and two decades, the old 1980’s vintage neon orange binder was tucked in between the original mortgage and the property management agreement, right where I left it back when the millennium was still shiny and new.

I was tempted to see what other oddities lurked in the depths of my filing system, but it wasn’t the moment to find myself sitting ankle deep in twenty year old paperwork. For the time being I’ll just be glad I found what I was looking for on the first attempt… but I think I’m going to add “digitize and shred” the deepest layer of the archive onto my list of things to do.

What Annoys Jeff this Week?

Electronic License Plates. My beloved home state of Maryland is launching a program to test “electronic license plates.” I have no earthy idea why bits of stamped tin that have been good enough and dirt cheap to make for more than a century needs to be made electronic – and more expensive, and trackable, and more prone to being damaged and needing replaced. It can’t possibly be as a means to make some state service less expensive or the process to receive it less onerous because God knows that’s not how we do things in here in Maryland.

Sleeping separately. Over the last ten years you can count on maybe all your toes and fingers how many nights I haven’t slept in the midst of dogs – some in the bed, some in crates, some loose on the floor, but always close enough to hear every snore and snort. With Maggie’s second accident in as many nights, though, I banished both dogs to the laundry room and their crates in wee small hours of the morning. They didn’t like it. I didn’t like it. I’m fairly sure the cat was fine with the arrangement, though. At least for the time being, this will have to be the new order of things. The alternative is planning to scrub the bedroom floor every night between 2 and 5 AM, which feels like a complete nonstarter for any number of reasons. Since we don’t have a definitive diagnosis yet there’s no way of telling if this is the short term fix or the long. In either case, it’s annoying and displeases me greatly.

Landlording. I bought a condo back in about 2001, fresh into my first professional job and figuring I’d be there for the long haul. Two years later, I was pulling up stakes for greener pastures and I’ve been renting the place out ever since. I’ve never been at risk of retiring off the rents received – once the property manager and inevitable repairs are paid for, it’s a break even proposition most of the time. I got a call this week that my property manager was winding down his business and I think that means it’s probably time for me to settle up, take back a little bit of equity, and finally let the condo go. There’s no one thing that’s really getting me out of the landlording business, but the steady drumbeat of needing to find new tenants, make repairs, replace appliances, and now the prospect of needing to learn to work with the quirks of a completely different management company are all combining to tell me it’s time to accept that the capital gains tax isn’t going to get any lower and move on.

A dark and rainy Friday…

As I was sitting here on a dark and rainy Friday morning seething quietly after cutting a check for a $1825 special assessment from my condo’s governing HOA, I realized it’s been a few days since I posted anything. What can I say, rage, it seems, beings out my inner soul as a writer – or maybe it’s just the catharsis I need after getting gang banged by a homeowners association board who must have been holding on to a shit ton of proxies when they voted.

I’m always curious about those who see rental income as a surefire pathway to wealth. Maybe it is under certain circumstances – if you’re local and can do many of the repairs yourself, if you paid cash and aren’t using at least a portion of the rent to make the note, or if you aren’t governed by an HOA that’s at least as good at spending other people’s money as the United States Congress. I’ve been renting out this condo since 2003 and I’ll admit that there have been a few good years – those years when nothing breaks and there’s no damage to be repaired. Those years are the rarity. Far more often it’s a break even proposition where you’re lucky to be about $500 into either the black or red by year’s end. Then, of course, there are those years where you end up pouring your own cash into the place hand over fist. No one talks about those years when they tell you what a great idea it is having a rental property.

At least the bastards got the bills out in time to use the whole damned mess as a 2018 deduction instead of having to wait an additional year to recoup a few pennies on the dollar. When your “bright slide” is consoling yourself that you have something to help offset the decreased federal deductibility of state and local taxes, you’ve really got to rethink the whole plan from start to finish.

This dark and rainy Friday is going to largely be about resisting the temptation to drive down there and nail a for sale sign to the door and being done with the whole bleeding mess.

Striking it rich…

There’s an unfortunate assumption that if you have rental property you must, by some unwritten rule, be rolling in cash. It’s been my experience that there are really only two ways to strike it rich through rental property; either you have 100 of them to smooth out the cash flow from month to month or you operate more as a slum lord than a landlord. Those two possibilities, of course, are not mutually exclusive as it is entirely possible to do both at once.

Where you’re never going to strike it rich is in owning just one. The good years are the ones where you break even after expenses. The great years are the ones where you get enough of a tax deduction to maybe show a tiny slice of profit. For the most part, what comes in goes right back out in maintenance expenses, management fees, taxes, mortgage, insurance, and home owner’s association dues.

Owing a rental is like owning a bulldog in a way – both are things I wouldn’t recommend anyone try for themselves. Avoiding them both will save you a whole lot of heartache… and I’m not just saying that because my property manager called tonight to tell me the heating system is shot and needs to be replaced the same week I’m planning on financing knee surgery for a dog and two weeks after paying off a contractor to make sure a river doesn’t flow through the garage and cause my basement to become an indoor swimming pool.

Enough all ready. Fate, chance, or whatever gods control such things are really starting to get on my last nerve. Sigh. I’m never going to get my new bathroom at this rate. Sadly, I’m not a slum lord. Heat is important. And winter is coming.

Starting at $500,000…

I’ve had several distinct experiences as a homebuyer. I’ve had the experience of buying into a brand new subdivision with streets still unpaved, a hundred lots still for sale, and the mixture of fear and curiosity in wondering if and when the project would ever be finished… and what kind of wackadoodle neighbors I’d end up with. More recently I bought into an established neighborhood whose tight restrictions and price of admission helped cut down on the wackadoodle, outwardly at least. Here in exurbia we seem to keep our crazy more inside the walls than up on blocks in the front yard.

Having been thoroughly scorched by the bursting bubble of 2008/9, two of my biggest priorities were finding an established neighborhood that would still be sought after when it came time to sell (as opposed to one that was still under construction, and suffering though several iterations of developer-gone-bankrupt) and driving down my offer price low enough to hopefully not lose my ass again. I won’t claim to have timed the market, but I feel good about how closely I was able to meet those goals.

I feel even better about it now that I’ve seen a sign going up just across the hill from my little cul-de-sac. It’s well out of my eye line, separated by a stream and a couple thousand yards of trees, but I heartily welcome any developer in the next neighborhood over who wants to list “3 to 10 Acre Estate Lots Starting at $500,000” in their promotional material. It’s good for property values and mercifully keeps that tract free from higher density projects. Since it’s the last stretch of land available for development in my immediate area, I was ecstatic to see it being chunked out in such big portions. Elitist? Yeah, maybe, but like it or not a house is as much an investment as it is a home and I’m in favor of just about anything that will help drive the value up – despite what it will inevitably do to my next property tax bill.

With the rest of the immediately surrounding land being state managed or otherwise being entangled by woodland protective covenants and restrictions, barring an unforeseen calamity prices only have one way to go… though given my decidedly mixed track record with real estate I could be absolutely and completely off the mark.

Trip Report – House Hunting Day #1

Saturday was House Hunting trip #1. There locations were on the menu – I’ve affectionally named these properties The Tub, Hill Climb, and Suicide Exit, respectively.

The Tub was a nice enough Cape Cod with 2 and 2. Needed some paint, some stain on the deck, and someone who knew something about yard work to take the place with a firm hand. I could have made it work well enough. The emphasis there was on “could.” Then there was the issue of the namesake “tub” in the upstairs bathroom – a tub that I can only think was ordered using “how big a jetted tub can we squeeze up the steps” as a planning factor. Not that I’m opposed to large jetted tubs. I’m just opposed to them when all other “conveniences” of the privy are relegated to afterthoughts and I’d need to trek downstairs and to the other side of the house every morning just to find a shower. Pass.

Hill Climb looked promising… on the map. I believe it was labeled as “on a bluff overlooking a creek.” What the description left out was that you’d have to have 4 wheel drive and willingness to follow a 30% grade dirt track to reach the house. Probably OK in the summer, but anything worse than a good frost would leave you stranded indefinitely. Pass.

Suicide Exit. Ah, the most alluring of the three potentials I wandered through yesterday. Curb appeal to spare, privacy, and a long stretch of creek in the back that eventually turns into the Elk River. It was exceptional – the kind of place I would buy if I were settling in to look for a place to fade into the twilight. Sadly, the musty smell of leeching water in the basement and damned near killing myself trying to back out of a blind driveway onto a winding country road are not insignificant or inexpensive issues to overcome. It’s a shame, really, because it was the kind of quirky post-war house I really like. For now I’m keeping it on the list because I’d really like to see the place when spring comes to Ceciltucky. For now, though, it’s a pass.

So ends the first day of house hunting. I’ll try to hit three more tomorrow afternoon if the light holds out.

In case you’re wondering, yes there are pictures, but I’m not feeling up to stripping out the geotagging information, so for the time being you’ll be forced to rely on your imaginations. It’ll be good for you. It’s how we use to do things in the olden days.

The end of an error…

Having gotten the final call from my realtor a few minutes ago I can state for the record that as of 5PM EDT today I am no longer a property owner in Memphis, Tennessee. I send the new owners good tidings and best wishes and hope that they have better luck with the place than I did over the last four years… but I’m super glad they didn’t call from the closing table wondering what I was going to do about a dripping gutter on the patio roof. Honest to God after the concessions I gave those two already I would have torpedoed the deal at closing just as a matter of principle. I’m glad that between their relator, mine, and the closing attorney they were able to talk them out of that particular course of action.

What I can tell you tonight with certainty is if there’s anything harder than selling a house long distance, it’s probably being an absentee landlord. Like grad school, though, I suppose it’s only a lot of work if you actually do it. God knows I did the work… an entirely new driveway, rerun sewer pipe from the house to the street, every painted surface inside and out redone, tile, backsplashes, tripled the size of the patio and roofed over the whole thing, and more work on the interior than I want to mention or even think about at this point. It’s all their egg to suck now.

Although I’m not quite out of the landlord business, the one that kept me awake at night is now a thing of the past. Let it stay there, ending the longest running and most expensive error of my life to date. Consider that lesson well learned.