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The Frozen Pipe That Broke The Landlord’s Back

It was three days before New Year; I dragged myself to work because of some stupid year-end deadlines. I have been sick for the last five days (the entire holiday season) and would have loved to just stay home. My head is pounding and everything seems to require so much effort. All I have to do is get a few year-end tasks done and I can get back to my bed, all cozy and warm. I may end the year sick like a dog but at least I want to be comfortable. Then it happened, the frozen pipe that broke the landlord’s back!

On-Going Dilemma:

To be a landlord or not to be! It has been a constant dilemma of mine since I started owning rental properties, over five years now. One day I am contemplating buying a triplex and the next I am ready to sell my three units! This month, I was feeling pretty good about the landlord business, nothing major had happened since the spring and the money was just coming in.

How The Day Started:

So here I was, three days before the New Year, rushing to get some year-end work finalized so I could  leave the office and be sick in the comfort of my own home. The day started with a brief text from one tenant letting me know the washer was still not working properly and the heat was not getting to the basement. Nothing major, I just texted back that I would schedule maintenance calls for the following week and wished my tenants a nice holiday. She had been bugging me complaining about the washer for a couple of weeks now and since I had her try everything I could think of (cycle with vinegar, change of detergent) I guess it was time I sent someone in to check it out. At least nothing major with the unit. Just a few more hours of work and I will be home!

Emergency Text:

Then another text came in: Emergency, please call! I have had those kinds of texts/messages a few times in the past , as a landlord, and I hate them. My stress level just goes from zero to high alert in seconds. Almost like a panic attack!. They always come at the worst time. You don’t get to pick when your tenants have an emergency. So, here I am, rushing to get my work done and totally feeling under the weather and now, I have to deal with a rental emergency! Maybe it’s not that bad.

Frozen Pipe, Flooded Basement!

Frozen pipe just burst and the basement is flooded…arghhhh! It is bad! I just want to go back to bed, I can’t do this today. I don’t want to do this today, anybody else out there to take care of this? The ceiling in the laundry room fell down, there is water everywhere and it won’t stop. Oh yes, don’t assume your tenants will know what to do, i.e.: shut off the water right away! In all fairness, I wouldn’t have known either until I became a landlord (the things you learn)

I Need A Plumber

I can’t think straight but I need to take care of this now! First step, get the tenant to shut of the water then find a plumber to go and fix this ASAP. So apparently, when it is -42 C (- 43 F) anywhere, pipes freeze and even burst… a LOT! Good luck to get any plumber! I was at plumber number 5 when I thought I should call my insurance to at least get the claim started. I have a flooded basement (finished basement), the ceiling is down; it is going to be expensive.

The Insurance

After I managed to get in touch with the Condo Corp to confirm burst pipes were my responsibility (again, worst time to get an emergency between Christmas and New Year, many business are on reduced hours or not open at all), I call my insurance company. It takes a while to get thru. When I finally talk to someone, she wants my policy number. I am at work, I am sick: I don’t have any papers with me. She wants me to call back later with the information. No this is not going to happen, I want to start the claim process now, I know how much time I will already lose because of the statutory holidays. Plus I have no clue how I will feel later, maybe much worse. She eventually agrees and looks for my information (it took her 2 minutes!) and start the claim process. She assigns an adjuster; he will contact me within 4 hours (I hope).

I Don’t Need Two Technicians!

In the meantime, I keep trying to find a plumber. I am finally on the phone with a plumbing company, they can send a team within 1/2 hour but they won’t clean up, I need to get an emergency restoration team for that. They are planning to send two technicians for a total of $164/hour and they will charge a minimum of 1.5 hours…but I only need one technician! Can I just get one? She puts me on hold so she can find out.

The Adjuster

In the meantime my cell is ringing so I pick up. It is my adjuster, he is going to send his contractor today and ask him if he can send a plumber and a cleaning crew too. That was so unexpected, the last time I had an emergency, my adjuster took days to get anything done. I take my chance and drop the overpriced plumber. I cross my fingers I did the right thing!

The Contractor Saves The Day

And I did:) Within an hour, I get a call from the contractor, his plumber is on his way and the cleaning crew should be there shortly. He will also be at the house later in the day, can I meet him? Wow, I am just so happy to have someone go there; I am ready to agree to just about anything, I mean I was getting ready to pay for two technicians to fix the pipe! Looks like I won’t be going back to bed anytime soon.

No Indoor Pool In My Basement

I ended up spending a couple of hours at the unit, it wasn’t has bad as I expected but then I was almost prepared to be swimming in the basement! Because the ceiling in the laundry room fell down on the washer and dryer, I will need to get both inspected as they may not be safe anymore (what an extreme way to get my washer problem fixed), the ceiling has to get fixed, the entire floor in the basement (laminate flooring) has to be replaced and a few walls need new drywall and paint!  Nothing anybody could have prevented. It got extremely cold and one of the pipes froze and then burst. It happens, apparently the dryer vent was too close to the wall, whatever that means. I just want to go back to bed! (Did I mention that already?)

When I left my unit, the cleaning crew was bringing in heaters and de-humidifiers to dry the basement, not much I could do. The contractor was going to contact the adjuster to let him know what needed to get done and they would be in touch. Estimated time to get all done; 3 weeks if I am lucky!

The Silver Lining

I got home, went to bed and thought how lucky I was it didn’t happen on Christmas Day (the silver lining). Also it may be good if I get a new washer and dryer since mine are new but I bought from Sears with extra warranty and Sears just went bankrupt! Not all that bad after all? Just kidding! At that point I am ready to give the house away!!! Who needs the extra headache?

The Other Unit

Then the next day, my other tenant calls. They are giving me their 60 days’ notice, they must move for family reason. I was so looking forward to a good rental year, no bad tenant, no additional cost, just profit. 2018 was going to be the year! Well it’s not. I will have at least $1,000 in deductible and I may have a vacancy for a couple of months. And the extra time I will need to handle both, I am just not feeling it right now.

The Frozen Pipe That Broke the Landlord’s Back

Am I ready to handle all this again or is it the straw that broke the camel’s back. I always go back and forth on this landlord business. I still think it is a great way to invest and to diversify. Who wants to have all their money in one basket? And you can get great returns with very little of your own money. But when things like this happen, I feel like giving up. I just don’t want to deal with it. I wish someone else could just step in and take care of it all (I guess that is called a property manager but it cost money!)

So I went back to my spreadsheet (income and expenses spreadsheet for the rentals) and checked the numbers again. 2017 was a good year for two units. The third one was at a loss because of my nightmare tenants moving out with rent owed and my place trashed. Preliminary overall ROE is around 3.5% even with one really bad unit but is it worth it? On a good year (with mortgage still on property), I could easily have 11% ROE, that’s good but will I ever get one full good year. The tenants seem to take turn, there is always something happening with at least one unit.

My Options

I could just invest my equity in a good dividend paying stock and easily get 3.5% just in dividend. I mean there is a risk too but at least I won’t get a call during the holidays to come and fix anything. There is a lot of value in that, mostly when you are feeling under the weather. Since I am still sick,  I will wait to feel better and seriously look at the numbers again. And here I was, thinking of buying a triplex! Or maybe I need to look into a property management company. I know they are not cheap but it may be worse it if I want to keep my rental properties but not the extra stress.

Was the frozen pipe the straw that broke the camel’s back?

26 thoughts on “The Frozen Pipe That Broke The Landlord’s Back

  1. Good morning Caroline. I am so sorry you have had a rough go of it the last couple weeks. I noticed you went quiet on your blog and social media so I sensed something was up. Glad to have you back! Regarding your dilemma. Totally agree that you should get rest and feel better before you make any decision. I respect and admire your efforts as a landlord, but I bet you know where I stand: dividend stocks. 🙂 You will make a good decision, but my gut tells me you will stick with real estate because of the monetary and personal investments you have made in recent years. However, with the Canadian real estate market at epic highs, would it be a good time to sell your properties? Tom

    1. Thanks Tom, I am definitely feeling better:) I check the housing market regularly (a bad habit of mine) and right now none of my houses have gained much in value. Another factor is that I am worried to put all my equity in the stock market, I like being diversified.

  2. HOLY CRAP THAT SUCKS.

    “My stress level just goes from zero to high alert in seconds.”

    That’s me with Airbnb as well!!!

    I couldn’t do it anymore. I don’t think it’s worth it. I honestly really don’t – because the more money you have, the less it matters. I get choices and my choice is to be happy.

    What matters to me is having a clear fun holiday, spend time with family and making sure nothing will stand in my way of a jolly good rest.

    Plus our city has the worst landlord laws. So much for a free market. Everyone hates landlords here despite the fact that housing prices are much larger than any landlord can control. I hate backseat driving by the government.

    1. You stopped Airbnb?? Did I miss a post? I will go about my business feeling pretty good and then I get one text from my tenants and I am all stressed out, like really stressed out, sometimes it’s not even a big deal. Maybe I am just getting too old for that stuff!:)

  3. Caroline,
    I’m sorry to hear about the frozen pipe. It happened to my previous house once, and the pipes above the garage went burst. It was a mess and caused lots of stress. Take your time to decide what you plan to do about the rentals. I wish you the best.

  4. Oh brother. Does it help if I tell you I have weathered the same nightmare scenarios?? I have had frozen pipes, backed-up main sewer lines, furnaces failing during hard freezes and A/Cs failing during heat waves. Invariably, most of it happening on a Friday evening before a holiday weekend (meaning impossible to find repair people and the ones you do find usually charge emergency/weekend rates). Waaaaa! Every time it happens, I go through your exact excruciating stress reaction and also wonder “IS THIS WORTH IT?” Then, I basically put my head down and work through the issue like you just did. And it’s usually not so bad. And I usually have a glass of wine and look at my excel spreadsheet of the money I have made in real estate over the last 20 years….and I stay the course. It has been so financially rewarding (crushing our market returns and keeping our tax burden quite low), that ultimately I get all excited again and think about ramping up into more multifamily, or commercial, ha ha. The circle of landlord life I will call it! Also, check this guy out: @Guyon_FIRE. He posts a monthly landlord report calculating exactly how much time he spends managing his rentals. And I think if I did the same thing, it would be a rather small number most months. So….there’s that! And if you remain a landlord, you know you can count on me to commiserate with you! Hope you are feeling better and Happy New Year!

    1. As long as I can count on you to commiserate, I should be good!:) Does your husband help you at all with the property management? Sometimes I just find it hard because I do it all alone. Thanks for the blog info.

      1. Yes, my husband definitely does help me. I don’t give him much credit in my blogging, but he shares the load in a lot of ways. He just went by a rental house today and removed a pump from a Koi pond that was freezing solid. Don’t ask me why we own a rental house with a Koi pond…because it’s the biggest pain ever and I hate it, ha ha! Other than some handy man type stuff, my husband can also be crucial for just giving me a boost or some moral support. On the flip side, sometimes it can feel like spouses working together, just annoying each other…sooooo the good and the bad!

        1. A Koi pond? Sounds like you are a sucker for punishment:) My partner is totally against me owning rental properties and think it is just a pain and not worth the efforts, so it makes it a little harder when stuff happens or if I need that little boost. My husband was a contractor and could have just stepped in and save the day pretty much anytime, it makes such a big difference. Glad your husband is supportive:)

  5. Hi Caroline, I am sorry you had such a bad time over the holiday’s. I use REITs for my real estate investing, just because I don’t want the head ache of being a landlord. It sucks if you pay somebody to manage your real estate investments, but I think it would be worth it if the numbers work. I hope you are feeling better. 2018 will be a great year !!

  6. Gosh this sounds like an absolute nightmare! I’m sorry you had to go through that!

    3.5% return for all that headache in not worth it in my opinion. Everyone likes to be landlords here in Vancouver there. I’m debating whether or not I should rent out my condo when we move out or sell it. Leaning towards selling it.

    Another thing you could do is hire a property manager (I believe they take about 10% cut) to deal with this. If I were to have rental properties I would probably do this even though it means cutting the bottom line.

    1. I agree that 3.5% is not worth the headache but it could be 11% on a good year:) And it runs independently from the stock market, which is good for diversification. Arghhhh… decisions! decisions!

  7. Sorry the sentence “Everyone likes to be landlords here in Vancouver there.” doesn’t make sense, my baby was whining in background can’t concentrate on typing obviously haha.

    Another option is the REIT as well! I only have <5% REIT but it's a way to diversify with real estate without having the headaches.

  8. What doesn’t break you makes you stronger…or something like that. 🙂 We’ve only just stuck our toes in the water with being landlords as we are renting to some relatives. So far so good yet I know we’ll eventually face days like yours. Thanks for sharing your story so I know how to handle it when it comes. Hope you are feeling better.

  9. That sounds so stressful! We had a long-distance rental for about two years. Luckily nothing like that happened, but toward the end we switched to a property management company and I was SO grateful to have them. (It was a home that became a rental by default when we moved though so our main goal was to break even instead of make profit).
    We’ve considered getting another rental in the future though and we would manage it ourselves. You got this. Just remember, those extreme negative temperatures don’t happen all the time!

    1. Long distance rentals are even more stressful. I had a vacation property in the Caribbean, just sold it last spring. Loved it but then the roof started leaking, condo corp was not very responsive and tenants were moving out…I just sold! I may buy one again eventually but wasn’t the right time. I still think rental properties are a good way to diversity your portfolio. And yes thank god extreme temperatures don’t happen all the time! Thanks for stopping by.

  10. Oh how I cringed as I read through this post! I know the feeling. Having just this past week replaced a furnace at one of our rentals. It sounds like you’re keen on the multi-unit dwellings, but I wonder if you’d find good returns with single family houses? I’ve found them to be an absolute joy – with responsible tenants, high demand (i.e., higher rents), appreciation, and better construction. Food for thought! Hope you’re feeling better.

    1. I read about your furnace:( I am keen on the multi-unit because I am looking downtown and it seems to be the best value for my money. Single homes are very expensive. Having said that, I have never really looked into them that much, just always assume it wouldn’t be the best deals! You have made some good points. Thanks for stopping by.

  11. Stuff like that always seems to happen at the worst time. Thanks for sharing your story. I was going through and sharing articles on Rock Star, which I normally just skim through, but this one I read word for word.

    Hope things get better!

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