Last post, I talked about the time we invested to get our first rental property up and running. As landlords, my wife and I may have an odd perspective on our tenants. They are, in fact, our customers. Our goal is to keep them happy enough to continue to occupy our property while paying the rent on time and causing as little wear and tear on the unit itself. We’ve had 100% occupancy for 10 whole months (yes, I know that’s hardly a world record). Starting up a rental, I knew we would be spending time and energy to keep our customers happy. I didn’t know exactly how much it would take, so I kept track of our hours. Let’s take a closer look at what we’ve done and how much time it took…
Our first tenant came to us on the recommendation of a great friend. Even better, the prospective tenant was in a pinch and needed a place quickly. It was November 15, and our place was almost ready. Despite a few missed milestones from Home Depot in delivering appliances and counter tops, we thought we could accommodate this tenant if she went through our application process. Things checked out, and we settled on a 6 month lease with the intent of signing a new 12 month lease in the late spring during peak rental season in our area. Because our tenant came to us, we didn’t spend much time or effort to “sell” our unit. Most of our time was spent developing our lease and application process. All in all, we spent about 40 hours preparing our lease, showing the unit, and signing the lease with our tenant. I should mention that we used this e-book, The Everything Lease Addendum: How-to For Landlords by Elizabeth Collective over at reluctantlandlord.net to help us write our lease, and it was one of the most helpful resources we’ve found as new landlords.
Our first tenant moved in while the unit was still being renovated. We never took photos of the empty interior space.
Doh! <Smacks forehead>
We remedied this oversight in August 2016. But, it was one of the more frustrating parts of trying to rent our unit. Note to aspiring landlords. Take photos. Take great photos. Take lots of great photos. If you don’t have a decent camera (by the way, your cellphone is not a decent camera) and a basic understanding of photography, hire a real estate photographer. It’s almost impossible to get web traffic without photos. And, great photos will set your rental unit apart. Hopefully, the images will serve you for many years to come.
Our first tenant left after about 8 months; she needed a larger space to accommodate her kids who were moving back in with her after finishing college. So in August, we needed to go through all the tenant screening steps in addition to creating the marketing materials for our unit. In total, we spent 33 hours taking photos, building a virtual tour, and updating our lease. We showed the apartment 4 separate times (about 1/2 to 1 hour each time). So, our total to get the unit re-rented in July/August was just under 40 hours.
So, what happened in between?
Remember how everyone who told you not to become a landlord cited not wanting to fix toilets!? I can tell you that we didn’t fix the toilet ourselves. Within two months of leasing the unit, we had a pipe inside our floor/the unit below ours start leaking. We spent 7.5 hours coordinating/supervising/figuring out who would pay for the repair in January of 2016.
Book keeping and taxes occupied a bunch of time in 2016: about 14 hours in April went to tax preparation & research.
Remember how I said we’re making about $20/hour when you include all the searching and renovations? Let’s take away those startup costs. We’ll remove the ~200 hours we spent searching for a rental property. And, let’s remove the 400 hours we spent renovating. Now, for some fun math: $17,000 divided by 200 hours of operations.
Wait for it
Not bad for a side hustle. That works out to the hourly wage of a hand or foot model!