As a lapsed student of Latin, I'm reminded of that bastardized phrase "Tempus fugit" engraved on most 19th Century clocks, which roughly translated means "time flies." The phrase, like the platitude, is a gross contraction. It derives from Virgil's poem, Georgics: "Sed fugit interea fugit irreparabile tempus, singula dum capti circumvectamur amore", which in its entirety means, "But meanwhile it flees: time flees irretrievably, while we wander around, prisoners of our love of detail." And yes, I had to look this up in Wikipedia.
A number of years ago, one of my children was visiting from out of town -- town being Philadelphia, a minimally affected municipality by the housing bust -- precisely when my next door neighbor, decided to sell his house and move South. The deal was quickly transacted over a few beers and Dad (yours truly) said: "Yea, it's a great deal ... I'll fix it up at a deep discount, you can rent it for a few years and derive a tidy capital gain when you sell." All true, even today.
But in my exhuberance, I failed to recall a few other sage words from another favorite scholar, Voltaire: "The public is a ferocious beast." Renting quality residential property to quality tenants is a bear. For starters, one must field phone calls and emails from prospective tenants (and their parents in many cases) who are simply shopping and have no intention of paying the advertised rate. Once a suitable tenant is found and qualified -- or prior -- the premises must be thoroughly scoured and made as presentable as a good hotel room, given modern standards and expectations.
The degree of work involved varies from those who want an early 20th Century bathroom to look like an art deco museum piece, to tenants who have $150K sport cars who want the garage as clean as the kitchen. And don't even ask about how labor intensive it is to repair wall scuffs from previous vacating tenants, repair and/or replace a portion of 20 window blinds, floor scratches, noisy garbage disposers, stiff door locks, counter top blemishes, sluggish drains, 12 ft ceiling light bulbs & fixtures, weedy lawns and gardens, cracked window panes, loose cabinet doors and a soap encrusted washing machine (though I must say the 20 year old Maytag is still going strong).
Now you might say "hire someone to do these things". Suffice it say that spot short-term contingent labor is unreliable at best. Better than nothing yes, but you'll end up forgoing two months of rental revenue if you don't self manage and jump in where needed at turnover time. And invariably, changing tenants never occurs at convenient intervals.
So heed the combined cautionary platitudes of Virgil and Voltaire if you're tempted to invest in residential real estate. For that matter, heed their advice with any investment you might be contemplating, except sponsoring Spend Matters of course.
- William Busch