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    Emily Fazio

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For Sale

March 27, 2015

Hope you believed me when I wrote in January that I thought I’d retain ownership of that awesome little rental house for the long haul; that was the plan, Stan.

My old home, the original Merrypad, is a fantastic little place and property that I had no trouble renting out. Realistically I suppose, it could run itself for years and years. That said, I pulled the trigger and we are officially parting ways. Sayonara. Great experience. Exhausted. Ready to be financially savvy, focused on family, and explore the potential in our current home.

Living room, image by Gridley + Graves Photographers.

The succinct rationalization is this: I would rather focus on family for the next two decades, and eliminate the daily stress related to maintaining a rental property. I have ~12-15 years left on the mortgage. I am paying a little more against principal, because combatting interest is a great thing, even though it’s at the expense of not having pocketed anything for the 22 months that it was rented. Considering the additional upkeep and expenses that I would expect to incur on that property over that same time period, I would guess that it would take me an extra 2-4 years to pay my savings back with rental income from the fully-paid for property. When you think about it, that means I’ll be spending the next 14-19 years trying to pay off a mortgage, and paying myself back for the upkeep on my home. My daughters will be graduating high school and college by the time this house is “pure income,” and at that point, guess what, it won’t actually be “pure income” because there are still taxes, insurance (which is higher on dwelling properties than on your primary residence), and maintenance. Even on days when everything is running smoothly, I’m still going to be burdened by the possibility of something breaking, maintenance contractors who don’t follow through on jobs, hoping rent is on time, and inevitable repairs and tenant circumstances. I will have been stressed and nervous throughout my children’s entire childhood.

The financial reality that I’m considering is this (and it’s way deeper than I usually travel on this DIY blog, but I hope some of my logic resonates with other people considering rentals): If 20 years from now is when I finally have an opportunity to be socking some of this income away, will it have enough time to grow to pay off in retirement? What if I took the profits from the house right now and allowed that to grow further for 20 years? I think there’s some misnomer out there that rental properties are an easy retirement investment, but if that’s the case, I’m not convinced I’m “doing it right.” Thank goodness for financial advisors who can project figures and provide rational scenarios to help with planning. Retirement planning is more important than a lot of things, and I’m not trying to be like a Merrill Lynch advertorial, but I’d rather have a stable retirement plan of action now than spend 20 years thinking that my rental strategy might not pay off.

Scott McGillivray, I gotta have a talk with this dude. He makes the rentals seem like a fantastic idea, and I know I would have regretted not giving it a go, so for that, thanks man. I caught a lot of his HGTV show Income Property over the years–it’s one of my favorite reality shows ever–and I simultaneous credit and also teasingly blame him for being in this situation. I have newfound respect for all landlords, especially ones who operate multiple properties and are able to make good bank doing it. The reality of it all is that it’s scary, and it’s not easy, and those who say they’re doing great at the rental game… are they really?

As far as the sale is concerned, I have a plan to have it on the market this spring. I’m working with the same realtor who originally sold me the house (shout out to Michelle at Nothnagle), entertaining buyers who have already expressed interest, and hoping… for lack of a better term… that this can be an “easy out” so that I’m not fronting the full mortgage payment for too long without the support of my tenants. The tenants will be gone before it’s on the market, which is kind of unfortunate because they have it nicely decorated, and when they’re gone I’ll be left with a case of the empties (or staging costs), but the vacancy will give me some time to do pre-sale maintenance and cleaning.

Bedroom, image by Gridley + Graves Photographers.

One nice thing that came from the reality of the situation, is that photographers Anne Gridley and Gary Graves are willing to share their professional photos to accompany my listing. This duo came to photograph the house in November 2012 in its peak state. Their images accompanied an interview that ran in the Spring 2014 issue of Small Room Decorating, and they couldn’t have captured the home in a more perfect light.

They gave me their blessing to share the photos with you here too. If you know of anyone who might be interested in my old home, feel free to shoot me an email.

  • Living room, image by Gridley + Graves Photographers.
  • Living room, image by Gridley + Graves Photographers.
  • Living room, image by Gridley + Graves Photographers.
  • Living room, image by Gridley + Graves Photographers.
  • Sunroom, image by Gridley + Graves Photographers.
  • Dining Room, image by Gridley + Graves Photographers.
  • Kitchen, image by Gridley + Graves Photographers.
  • Kitchen, image by Gridley + Graves Photographers.
  • Kitchen, image by Gridley + Graves Photographers.
  • Stairwell, image by Gridley + Graves Photographers.
  • Bedroom, image by Gridley + Graves Photographers.
  • Bathroom, image by Gridley + Graves Photographers.

 

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Buying and Renting and Selling

Emily
I'm a home improvement enthusiast, living a very merry DIY lifestyle. You can find me writing for HGTV and DIY Network, follow me on facebook and instagram, or drop me a note if you'd like. I love notes.

12 Comments


Jessy @ The Life Jolie
March 27, 2015 at 11:44 am
Reply

I’m with you on this- the idea of being a landlord sounds like a lot. As someone in the financial industry as well (though not affiliated with Merrill Lynch) I agree with your advisor. Saving for retirement is so important but working smarter not harder is also important. I think that if I ever were to use rental properties as an investment strategy it wouldn’t necessarily be part of my “retirement” strategy per se (or at least not in large part) but that’s just based on my own skill set ( or lack thereof) and not wanted the extra hassle. It’s such a personal thing but always interesting to hear other people’s thoughts.

Thanks for sharing yours!



    Emily
    March 27, 2015 at 8:59 pm

    Smarter not harder – Perfectly said. Thanks for the nice comment, Jessy.

Penny
March 27, 2015 at 1:11 pm
Reply

Thank you for this blog post! I’ve been following you since you made the decision to rent your city property when buying your new home. It is something that my husband and I have always thought about doing with our current city home — keep our first home as a rental and move to the ‘burbs as our children get older, you know that 6th grade switch! Thank you for keeping us in the loop and making me second guess the threats and opportunities that come along with thinking of a house as an investment property and the not so likely money in your pocket that we think there is “huge” potential for.



    Emily
    March 27, 2015 at 9:02 pm

    I’m glad that it made you think twice. Consider all the options, and if you’re working full time and have kids, keep in mind that if you’re dealing with maintenance on the weekends, those tasks can eat up a whole day that could have been spent having fun :( I was given plenty of sound advice before I made the decision to rent it, and I still wanted to try it out. No regrets at all, but I’m still hopeful that this short review of the situation will help others making tough decisions.

Jane
March 27, 2015 at 2:14 pm
Reply

I love the house! It’s beautiful and unique, I like the wood on the dining room wall, very clever for added texture. Decorating is a passion of mine as well and I adore your skills.

I agree with you on ditching the property, I could never justify the costs as well, you are making the right decision!

I enjoy your writings on your blog, you hold true natural talent and look forward to your future updates, focusing on your current property!!

Good luck on the sale!



    Emily
    March 27, 2015 at 9:02 pm

    Thanks Jane!

Blake
March 27, 2015 at 5:36 pm
Reply

I have a townhouse that I rent out and I will saying getting a property management company does help make it a lot easier. They do get a 10% cut of the rent, but saves me from having to worry about a midnight call for some maintenance repair. That said, the repair costs get passed on and if there are no repairs it does earn some money each month over the mortgage and HOA fees. Also, getting the right property management company makes a WORLD of difference. I had one that I need a bottle of Pepto nearly every month I felt like. Nearly every renter they got seemed to not pay half of the time and they had to evict 3 different people. That property management company did go out of business. My current one is much better. Repairs a few times a year and so far has been rock solid on getting good renters that pay on time. Looking back over the past 3-4 years it has been a vast learning experience. However, if I got an offer today for a fair value on it, I would sell it.



    Emily
    March 27, 2015 at 9:06 pm

    Great comment. I briefly considered property management at one point during a not-so-good tenant situation. Definitely a good idea if you want to stay out of the middle of the nitty-gritty, and still make an investment property worthwhile. It would be very nice to not be the person on the frontline of all urgent situations.

Cait
March 27, 2015 at 7:52 pm
Reply

I appreciate your honesty on the subject! The last time we talked about this (over lunch, I think?), I hadn’t yet binge watched Income Property on Netflix, but I should have made the connection to my grandparents’ house, which my parents are taking care of for several years now that my grandparents have both passed. Property taxes, insurance, and maintenance are a killer for sure, and the overall stress of having two properties often outweighs the benefits. At one point my parents were taking care of their house, my maternal grandparents house, and my paternal grandma’s house. The time (and money) involved with that was overwhelming, especially for my dad, who did the brunt of the maintenance, and dealt with tenants for a briefs period of time. My parents are nearing retirement age, and I think they are ready to start enjoying their “freedom”, so to speak. My mom recently said “I am so ready to just have one house again!”

I guess what I’m trying to say is, I completely understand your points, and the desire not to be stressed for your girl’s entire childhood! I think I would feel the same way. It probably sounds cheesy, but you and Pete are an inspiration to me, as far as your careers and your thoughtful updates to your house(s). I think we have similar thought processes on a lot of things, so when you talk about the realities of freelancing or being a landlord, I usually find myself agreeing with your viewpoint entirely.

PS – the photos are beautiful! I think the fact that you have furnished photos of the house really helps, especially if you aren’t in the financial place to stage the house (whether you tackle that yourself, or hire it out).



    Emily
    March 27, 2015 at 9:10 pm

    Thanks for the nice comment, Cait – I always appreciate your enthusiasm and support as I navigate all of… this. As I figure out life, remodels, and the home buying/selling/renting processes. I mowed the lawn every week over there last summer – it was a time suck, another thing on my list that kept me from doing things around our current house, so like your parents, I’m also looking forward to having one home on which to focus.

Katharine
March 28, 2015 at 12:17 am
Reply

I love seeing pics of your old house again. You did an amazing job with it, and I’m sure these photos will help interested buyers see the potential.



Nicole
March 30, 2015 at 12:04 pm
Reply

I completely agree with you! I have been trying to convince my husband to ditch our rental property. We bought it a few years ago because we got a great deal on it. And because there is a serious rental property shortage in town, we get a good amount for rent and realize profit monthly. But because there is currently a pretty big shortage on listings, I think we can get a pretty good amount for it if we try to sell it now. The point of having this rental property was to make money, not just own an extra property. Good luck and I wish you a fast sale!



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  • HI, I’m Emily

    Emily Fazio

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