Cleaning Up

Weekends are really way too short. They’re too short when you’re relaxing on the beach. Not long enough to read a book and watch some DVDs. Two days too short when trying to get out of town. And definitely too short when spending it cleaning up after a tenant.

Ok, it wasn’t so bad this time. Spent half of the day yesterday cleaning up a studio for a new tenant. It’s actually a guesthouse that’s part of a rental home. The property is about 2 miles from our principal residence. We’ve owned this property for 1.5 years now and bought it from motivated sellers. The previous owners had lived in the house for over 10 years. Houses in that tract are on very large lots for Orange County. This lot is 14,000 sq ft which is well over ¼ acre. The average lot for an older home in OC is about 7000 sq ft and newer homes can be on even smaller. This particular home has a permitted “mother-in-law” addition. At about 600sq ft, it’s actually fairly spacious and has a small kitchen and bathroom larger than those of most small apartments. While the studio is attached, it has a separate entrance from the large backyard. The fact that the house had a studio was probably a turnoff for some of the families that saw the house because might have preferred a traditional layout. For us, it was perfect as we prefer homes that have guesthouses for the stronger cashflow. The owner was also already in escrow for a new home in Riverside county so they were anxious for an offer. The home was listed at $550k and we offered $514k. Low but not insulting. They countered at $525k and we countered at $516k, showing that we weren’t willing to move much. They accepted. Yay!

Our offer was also low based upon the fact that the listing agent was not from the area. She was probably the agent that represented them in their purchase in Riverside. Using an agent that is not familiar or local to the area is definitely a disadvantage. An obvious point is that she doesn’t know the area well other than what the comps indicate but not other factors such as the best school districts. Secondly, in my opinion, a non-local agent is not as likely to negotiate as aggressively for a higher price. Servicing the listing with open houses and other visits is inconvenient when you have to drive a distance. They would rather just sell the house rather than extend the negotiation process or wait for other offers. Seller’s loss, our gain!

We spent less than 2 weeks with minor improvements such as paint and cleaning. Fresh paint and some warm, neutral tones always make such a huge difference. We also divided the large yard with a wood fence so that both the main house and studio would have completely separate and private yards.

We leased the main part of the house to an older couple. The wife is in her early 60s and husband in his early 70s but they both seem healthy. They were financially hurt by the 9/11 bombings that had an impact on their business and caused them to declare Ch. 11 bankruptcy a few years ago. When they submitted their application to rent, they included a full letter stating their situation. The letter was well written and sincere and we made a judgment call based upon their character to extend a lease to them. They have since been excellent tenants and pay their rent on time and treat the home as if their own. They are both educated and it’s a shame that they were affected so late in their lives when I’m sure they were hoping to retire soon.

The studio was initially rented to a good friend’s teenage son. She assured me that she would make sure he paid rent on time and take care of the house. It turned out that it would be for him and his girlfriend but we gave them a year-long lease anyway. The rent was always on time but there were other issues. The main house tenants complained several times about noise and loud music. After he broke up with his girlfriend, he tended to have more friends over as well. It was with a little relief that he decided to move out at the end of the lease. The place was left a bit of a mess. The brand new carpet looked like it had not been vacuumed during the entire year. There were at least a dozen cigarette holes in it as well and large stains. There was no choice but to replace it but he paid for the entire cost. His security deposit didn’t cover it entirely but he made good by sending a check for the balance. He was always polite and respectful though. His mother and I are still good friends.

The second tenant was there for 6 months and just moved out yesterday. He was an excellent tenant and we never heard a single complaint about noise. The carpet still looks near new and the yard looks excellent. He’s moving because his company moved to LA county and he’ll be moving in with his aunt to save money and be closer to work. Thankfully, we only needed to spend a few hours to clean it up as we had less than one full day to prepare for the new tenant who started moving in last night. Let’s hope that this one doesn’t play in a band, have potheads over on the weekends and cook and shower late into the night.


Total spent on Friday
$18 2 movie tickets (1 student discount. Yes, I’m long past my college days but that old student ID comes in handy. How does a family of 4 afford to go to the movies anymore? At the AMC at The Block, an adult ticket now costs $10.50. 2 adults and 2 children would run $34 and probably another $15 in popcorn and snacks.)
$41 Dinner for two Wolfgang Puck Cafe

Total spent on Saturday:
$5.50 (fastfood lunch, saved $3.50 with Entertainment coupon)
$55 Lowe’s Home Improvement (stuff for rental property)
$66 Dinner for 2 (Italian restaurant, change of ownership and so they didn’t accept Entertainment card!)

Total spent today:
$10 Starbucks for 2
$37 Sav-On Drugstore (misc. toiletries)