Bon
PI is never a set and forget investment. I learnt that the hard way years ago. Just a little story so you can benefit from my mistake:
I had a rental that I scrapped and scrimped to get in about 1991/1992, had the block and built a new house on it. At the time I was in the military living on base in a 3m x 3m room no aircon, noisy, hot and sharing a bathroom with 20 other people and eating whatever they served in the mess - cause it was cheap and I wanted to get ahead and pay for this IP. I was about 1.5 hours away from the IP.
I just set and forgot, didnt want to know about inspections etc, just let the PM deal with it.
A few tenants came and went, had one who requested to put doors on a study(double doors, study was built without doors) at their own expense and said they would leave the doors when they vacated. They took the doors and did a woefull patch up job that I wasnt aware of till I sold the place as I didnt bother to inspect it at all.
Had good tenants once who were willing to put up a small retaining wall with drainage in the back yard if I paid for the materials. I refused, stupidly as the place did have a bit of a drainage problem, so they left. This decision came back to haunt me later.
After them, I had tenants who had 2 vicious dogs (so I heard later), pets wernt allowed on the lease, who threatened all and sundry of the neighbours and when we had a bit of a torrent of rain, water went through the house at about 10cm, tenant threatened to sue me and make me pay for his accommodation at a motel.Luckily I didnt have to pay for a motel but I had to pay for their cleaning of their clothes, furniture, furniture removal and storage for 2 weeks and didnt really have any comeback on the bond and the place was not being kept very well at all.
I decided to sell as I was a bit over it, heartbroken, and when I went to have a look, noticed that one of the tenants (didn't know which one as I hadn't been interested in checking as each vacated) had left a big burn mark in the kitchen benches, the lino was torn, vertical blinds were missing and torn, fly screens torn and missing, the previous mentioned doorway was not patched up well (home job), backyard had numerous pot holes where dogs were digging, the back fence was trashed and so many other things I could go on and on. At the time it was my only IP and I didnt buy another for 8 years.
I sold it in about july 2000 for not much more than it cost me to start with with all the driveway, blinds and other sundry costs involved in building. Within 2 or 3 years of me selling, it would have almost doubled in value.
I would personally be at least 200k richer if I had taken more interest in my own investment instead of leaving it all to the PM and not being a stingy so and so when I did have good tenants.
I now have 3 IP's and take a far greater intrest in them. I inspect the day after every tenant vacates as PMs can and do miss things, I try to attend to maintenance issues ASAP and look after good tenants. It doesn't mean you have to bow to every request, just consider reasonable ones.
If you have put in a aircon (which by the way I paid $2600 for one with installation 12 months ago), I would be putting up the rent when you can to compensate for the extra ammenity.
Dont do what I did when I first had an IP, take an interest after all it is your money and financial reputation at stake and you will come out ahead after a few years and then the things you are doing without will seem worth it.
I really regret my disinterest in my first IP now. I was only about 25 when I first had it and seemed to be off to a great financial future but I blew it. I probably wouldn't be working right now if I had just taken more interest in that property.
Just food for thought.
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