Shit Hits the Fan before Home exchanges
It happens every time here.
You have to be organized to do home exchanges--and I am not just talking about going a bit crazy cleaning before the exchanges. That is expected. Preparing your house in advance is also expected. Periodic tossing of old files is expected. What is never expected is all the other "stuff" that happens.
Predictably, for summer 2014, it has happened again. It rained a lot here in the Washington, DC, area. AlteCocker happened to be just working on her computer in her basement when she looked down and--uh oh--major problem. The basement was flooded. It flooded again the following week but not as badly. Fortunately, AlteCocker possesses a water vacuum for such emergencies. It was purchased over 30 years ago when the flooding problem first reared its ugly head. She thought the problem was fixed then with 2 sump pumps, but it has come back with a vengence. So, as she prepares to get the hell out of Dodge, she has a major construction project going on in her basement that involves tearing up the foundation and putting in drainage along the side of the wall causing the problem--a mega financial expense for sure. But, being an honest home exchanger, AlteCocker would not leave an unresolved problem like that for home exchangers. It is what she calls a non negotiable home repair. It has to be done--and now. For this we have equity line. The computer has been, of course, removed from the scene of the disaster until she is 100% sure the problem is over.
Last year it was problems in with AlteCocker's mini rental business that involves 3 rental units. This is not a good way to make money. While your rents will rise and your mortgages go down, you really do not make money until you sell--and then you have to pay capital gains. It was my thought that these rental units were going to take me through retirement. AlteCocker bought them all a long time ago so she is not under water--and AlteCocker is very conservative about investments. Are the mortgages paid off? Two of the three are--sort of. What you do is periodically refinance your house and roll the notes into your house note where the interest is lower than on investment property. It looks as if the mortgages are extinguished, but your house note gets larger. So the mortgages never really get extinguished. The third note is so tiny that the bank is not interested in refinancing it. It will be extinguished in about 4 years--at about the same time as AlteCocker will, not doubt, need to buy a new car and need a new monthly payment.
Of course, the bottom fell out of the housing market and AlteCocker's retirement plan was shredded--along with every other baby boomer's.
Then there's the condo fees--which increase every January like clockwork. Again, rental units are not a good way to make money.
Periodically there are also things like a new hot water heater, air conditioning system, replacement windows, etc. Maintenance is a killer--just like in your own house, but worse. Tenants simply do not care for things as a home owner would.
So, you plan to go away on a long trip. What happens, you get a major move out and a total rush to get the unit in shape for leasing. AlteCocker has owned her units for years, so there is a drill for this. You sign the contract with the realtor and list the unit for rent. Then you call the painter--and make it quite clear to him that all the painting and fixing has to be done within days of the move out if he expects to be paid for his work before you leave. The last call is to the condo to set up apartment cleaning and rug shampooing--and, in my case, getting that delayed because the office will be "down" for the 4th of July holiday. Ugh! It will take through July 10th to get the unit ready--and I will be gone before it happens. It is, by the way, a bit obvious that the unit will not rent until prospective tenants can smell the sweet odor of fresh paint and the rugs are clean.
But that is not all, AlteCocker has 3 rental units and, when trouble comes, it comes in droves. In 2013 a second unit went empty 3 days after her return from her summer exchanges in Europe and needed a new kitchen. So, before leaving town--and 2 months in advance of the move out--AlteCocker had to order new kitchen cabinets, a counter top, sink and faucet for that one. After she returned, she went right into the remodel--and then the realtor overpriced the unit for rental (not recognizing the drastic effect of the shutdown/debt ceiling battle on the market in DC) and the unit stayed empty for 3 months. AlteCocker is not stupid about demanding top dollar rent. Renting apartments is, after all, a business. She suggested to the realtor reducing the price and he said "No." Then, after not renting for 2 months, he suggested lowering the rent. The rent did go down, but with a new realtor. When you cost AlteCocker money, you are toast. Mind you, she had the same realtor for 37 years and does not run around changing realtors frequently. The insistent over pricer lost her business--and it was an agonizing decision.
It is never a dull moment here--especially when AlteCocker is attempting to leave town. Now she is leaving again and there is an $8,000 construction project in the basement. And so it goes.
Moral of the story: Whenever you leave on a home exchange, unexpected stuff seems to pile on. And we won't discuss the emergency roof repair on her own home that resulted when she heard the "drip, drip, drip" sound when there was a severe rainstorm or the two times the same damn leak reappeared in the house and bothered home exchangers. The guy who "fixed" it the first time will never be seen in AlteCocker's home again. AlteCocker does not take kindly to half ass repairs.
AlteCocker needs a vacation. Fortunately, she is about to have one.
You have to be organized to do home exchanges--and I am not just talking about going a bit crazy cleaning before the exchanges. That is expected. Preparing your house in advance is also expected. Periodic tossing of old files is expected. What is never expected is all the other "stuff" that happens.
Predictably, for summer 2014, it has happened again. It rained a lot here in the Washington, DC, area. AlteCocker happened to be just working on her computer in her basement when she looked down and--uh oh--major problem. The basement was flooded. It flooded again the following week but not as badly. Fortunately, AlteCocker possesses a water vacuum for such emergencies. It was purchased over 30 years ago when the flooding problem first reared its ugly head. She thought the problem was fixed then with 2 sump pumps, but it has come back with a vengence. So, as she prepares to get the hell out of Dodge, she has a major construction project going on in her basement that involves tearing up the foundation and putting in drainage along the side of the wall causing the problem--a mega financial expense for sure. But, being an honest home exchanger, AlteCocker would not leave an unresolved problem like that for home exchangers. It is what she calls a non negotiable home repair. It has to be done--and now. For this we have equity line. The computer has been, of course, removed from the scene of the disaster until she is 100% sure the problem is over.
Last year it was problems in with AlteCocker's mini rental business that involves 3 rental units. This is not a good way to make money. While your rents will rise and your mortgages go down, you really do not make money until you sell--and then you have to pay capital gains. It was my thought that these rental units were going to take me through retirement. AlteCocker bought them all a long time ago so she is not under water--and AlteCocker is very conservative about investments. Are the mortgages paid off? Two of the three are--sort of. What you do is periodically refinance your house and roll the notes into your house note where the interest is lower than on investment property. It looks as if the mortgages are extinguished, but your house note gets larger. So the mortgages never really get extinguished. The third note is so tiny that the bank is not interested in refinancing it. It will be extinguished in about 4 years--at about the same time as AlteCocker will, not doubt, need to buy a new car and need a new monthly payment.
Of course, the bottom fell out of the housing market and AlteCocker's retirement plan was shredded--along with every other baby boomer's.
Then there's the condo fees--which increase every January like clockwork. Again, rental units are not a good way to make money.
Periodically there are also things like a new hot water heater, air conditioning system, replacement windows, etc. Maintenance is a killer--just like in your own house, but worse. Tenants simply do not care for things as a home owner would.
So, you plan to go away on a long trip. What happens, you get a major move out and a total rush to get the unit in shape for leasing. AlteCocker has owned her units for years, so there is a drill for this. You sign the contract with the realtor and list the unit for rent. Then you call the painter--and make it quite clear to him that all the painting and fixing has to be done within days of the move out if he expects to be paid for his work before you leave. The last call is to the condo to set up apartment cleaning and rug shampooing--and, in my case, getting that delayed because the office will be "down" for the 4th of July holiday. Ugh! It will take through July 10th to get the unit ready--and I will be gone before it happens. It is, by the way, a bit obvious that the unit will not rent until prospective tenants can smell the sweet odor of fresh paint and the rugs are clean.
But that is not all, AlteCocker has 3 rental units and, when trouble comes, it comes in droves. In 2013 a second unit went empty 3 days after her return from her summer exchanges in Europe and needed a new kitchen. So, before leaving town--and 2 months in advance of the move out--AlteCocker had to order new kitchen cabinets, a counter top, sink and faucet for that one. After she returned, she went right into the remodel--and then the realtor overpriced the unit for rental (not recognizing the drastic effect of the shutdown/debt ceiling battle on the market in DC) and the unit stayed empty for 3 months. AlteCocker is not stupid about demanding top dollar rent. Renting apartments is, after all, a business. She suggested to the realtor reducing the price and he said "No." Then, after not renting for 2 months, he suggested lowering the rent. The rent did go down, but with a new realtor. When you cost AlteCocker money, you are toast. Mind you, she had the same realtor for 37 years and does not run around changing realtors frequently. The insistent over pricer lost her business--and it was an agonizing decision.
It is never a dull moment here--especially when AlteCocker is attempting to leave town. Now she is leaving again and there is an $8,000 construction project in the basement. And so it goes.
Moral of the story: Whenever you leave on a home exchange, unexpected stuff seems to pile on. And we won't discuss the emergency roof repair on her own home that resulted when she heard the "drip, drip, drip" sound when there was a severe rainstorm or the two times the same damn leak reappeared in the house and bothered home exchangers. The guy who "fixed" it the first time will never be seen in AlteCocker's home again. AlteCocker does not take kindly to half ass repairs.
AlteCocker needs a vacation. Fortunately, she is about to have one.