1. Assessments. I made the mistake of opening my property tax assessment on Sunday morning. I was having a perfectly nice day up until that point. Look, I mean it’s great that the county thinks I’ve picked up that much equity over the last three years, but that in no way means I’m happy about throwing more money to the Cecil County executive and council to piss away buying up even more land for regional parks that seem to be accessioned specifically to provide a place for people to go overdose.
2. The new normal. I’m looking forward to getting started on the Biden presidency and the conclusion of the Trump impeachment trial. I, for one, am sick and tired of finding myself siding with things members of the Democratic Party are saying and look forward to getting back to opposing 60-70 % of their policy agenda. I’m tired of living in a world turned upside down.
3. Stats. If this week has taught me anything, it’s that my blog readers either a) don’t want to read about insurrection, politics, and all that or b) the zone is so flooded with posts that things aren’t getting through. Views are more than 50% off where I’d expect them to be in a normal week. This, of course, has been anything but a normal week. I’m going to keep doing what I do, even if it’s just me shouting into the void.
The little house I rented when I first arrived back in Maryland is about to be for sale.
I didn’t love the three-level split layout. I didn’t love the baseboard electric or window air conditioners. I didn’t love how the place was inexplicably hard to keep clean or how it was staggeringly dark inside.
It had a fenced yard, the owner allowed dogs, and it was available immediately. Those things overrode all other considerations and sealed the deal… because every shred of the personal belongings I couldn’t fit into my truck, were two days behind me on a trailer and arriving whether I was ready or not.
Once I started going around the nominal property manager and working directly with the owner about things like vehicles the previous tenant abandoned in the driveway, mold in the basement, and appliance repairs things got better. I whipped the yard into shape and made the place surprisingly presentable considering it hadn’t been updated since it was built sometime around 1988.
I’d never want to live there again, but damned if seeing it posted as a “coming soon” didn’t make me just a little bit nostalgic about a couple of memories made in that little house that that I wouldn’t trade for anything.
I hope someone snaps my old rental homestead up, gives it a bit of the TLC it needs, and makes it a proper home. It’s got the bones for it, if someone has the vision and a few dollars to spare.
I read an article this morning calling for a 90-day or longer “rent strike,” which seems to be a classed-up way of saying even if someone can afford to pay their rent, they’re not going to do it. The assumption of this movement is that property owners across the country should just absorb the cost of housing for people who can’t or won’t pay.
Until a few months ago I was the smallest of small time landlords – having one condo unit that I rented out. Over the years of owning the place I squirreled away enough operating funds that I was able to make repairs and hold two or three months cash reserve to tide over those months between the departure of one tenant and the arrival of the next. In my very best year, I cleared $1495. Most other years I was lucky to break even or be a few hundred dollars in the black when we did the final accounting. There were more than a few years when I had to augment the rental income with cash infusions from my “day job” to make sure all the bills got paid.
That’s all a long way of saying that expecting landlords across the country to carry the freight of a rent strike indefinitely is absurd. Even assuming the property owner has a “day job” what they’re suggesting would have driven me into the loving embrace of the bankruptcy court at about the ninety day mark.
The big bad landlord these people want to screw over isn’t only the 10,000-unit holding company or Bank of America, it’s also the retiree who lives down the street or the working man across town who took a step on the property ladder by buying a trashed property and fixing it up. I’m well aware that blood from a stone isn’t a possibility, but the fact that social media is running amok with people who want to portray withholding all rent, especially by those who have the means to keep their obligations, as a heroic act of rebellion is just infuriating.
The good news is that I’ve now sold my condo and the proceeds have been deposited. The bad, but not unexpected, news is that thanks to the money grubbing politicians in DC and Annapolis, I get to keep a whopping 50% of the profit from the sale.
I’ll say this slowly for those whose response to every issue is “tax the rich:” Capital gains taxes are taxes on the middle class. They’re taxes on every man and woman who has used a little bit of their already taxes income to invest in their own future.
If you want to know why I’m firmly in the #NeverVoteBlue camp, it’s the fact that they’re the party of more taxes even when government revenue is already at an all time high. It’s the fact that after 20 years of paying property tax, tax on rental income, and generally trying to look out for my own future, the state and federal revenue agents feel like they’re entitled to get another bite of the apple. It’s almost as if they’ve got beef with someone who’s trying to take care of their own future rather than accept a subsistence level life doled out monthly and overseen by political hacks.
Enough already. Unless you’re planning on giving me a handy, keep your damned thieving mitts out of my pockets.
As of a few minutes ago I’ve probably taken my last official action as a property owner in St. Mary’s County in scenic southern Maryland. I’ve added my John Hancock to a few pieces of paper and in about 48 hours they’ll be countersigned and magically turn into a big bag of cash… or, well, whatever the electronic equivilent to a big bag of cash is, anyway.
I really expected signing it all over would leave me feeling some kind of way, but what I seem to be feeling most is a sense of relief… that I’ll never have to worry about finding another tenant, or that someone is going to tear the place up, or that I’ll get a random phone call in the middle of the afternoon that the furnace or air conditioning compressor needs to be replaced. I made some damned good memories in that little condo during the short time I lived there, but its life as an income stream (or suck depending on the year) lasted far longer than did my time really living with it. I’m mostly left feeling that it was an investment that served its purpose and it’s time to cash out.
Maybe the sick dog has just used up all the feels I’ve had allocated for the week before we got to the real estate transaction portion of shit to do. Anyway, I’ve done my bit. All that’s left now is for the seller to do his. And then we can all feel well satisfied and get on with whatever is next.
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.
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.
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.
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.
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.