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!
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!
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.
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.
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.
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?