Due to a variety of circumstances, we became full owners of a townhome in Tucson, AZ, in the summer of 2009. The real estate market had dropped quite a bit so our initial attempts to sell it for our desired price were unsuccessful. We decided to keep it as a rental and became absentee landlords.
The good news was that the property had a number of merits–it was convenient to the University of Arizona, across the street from a rural farm, and was an end unit by the community pool. And we have had no problems finding renters.
The bad news has been that, being remote, we had to hire a local property manager (at a cost of 10% of rental receipts), could not observe the upkeep and maintenance, nor do any repair work ourselves to save on expenses. Further, the market tanked even further, with the market value ultimately dropping to 60 cents on the dollar. Finally, we had one bad renter who damaged the property significantly, skipped on several months rent, and stole our near new washing machine.
While the monthly rent checks were nice, we became somewhat disillusioned about being landlords. At a minimum we decided we no longer wanted to be absentee landlords and would sell the property when the current renters left. We anticipate this within a few months and, after deciding real estate property was a decent diversification asset, we began our search for a local rental property to replace it.
We utilized an experienced real estate agent (with landlord experience) and various online tools, such as rmls.com and zillow.com. It was actually kind of fun searching for candidate properties, and viewing the best contenders, with automated email coming twice per day. We have been researching market value histories, and rental rates. We made a full cash offer on one condo, only to get beat. We identified another foreclosure that was tied up in the government FHMA system and jumped on it as soon as it got back on the market, offering $2K over listing price. This time we won and closed on it last week.
Here are some photos of our new 2 bedroom, 2.5 bath rental condo. It is a very nice unit in a classy neighborhood.
It has an attached single car garage. Our unit is the near corner, all three floors.
This is the master bedroom. We will repaint the walls and stretch the carpet.
This is the community building for the development.
One of the nice walkways.
Here is the family room/kitchen/dining room leading out to the deck. We are replacing the stained carpet.
The community pool with exercise gym to the right.
Neighborhood playground.