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Video: Another Nightmare Income Property

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I love watching videos like this.  Not because I enjoy watching a landlord get burned by tenants, but because it presents a good warning to current & potential investment property buyers of what to watch out for.  The bottom line is that managing tenants is by far the worst part of real estate investing, and videos like this one help make it clear what you should and should not be doing in terms of property management.

This particular video shows before and after footage of an actual rental property (furnished).  Of course, the tenants absolutely trashed the place.  After they moved out, they left garbage everywhere (including syringes), as well as many of their own possessions.  There were also black marks and blood on the walls, cracks and holes in the walls, broken cabinet doors, ripped curtains, broken deck railings, rat feces, animal chew marks, rotting food, carpet stains, and general filth everywhere.

My first thought when watching the video was – why furnished?  I mean, I can see providing a furnished unit for a seasonal rental, but not for a regular everyday rental property.  By including furniture, this landlord opened himself up to additional property damage.  Plus, providing furniture basically invites a transient population because only people with very few of their own possessions would move in.  And generally speaking, people with few possessions are unstable and of low quality, and this fact also makes it easier for them to move out on a dime.

Another lesson learned is that it does not pay to make your rental property top-shelf.  For example, the landlord in this case put all new items in the unit, including new carpet.  Unfortunately the carpet is beyond repair and must be replaced at a cost of $2,500.  Obviously, the tenant’s security deposit doesn’t even come close to covering this expense, not to mention all the other repairs that are necessary.  A better alternative would have been putting linoleum on the floors, as this is cheaper and more durable.

In the final analysis, NEVER provide furnished units, and ONLY include the bare minimum in terms of amenities and interior cosmetic items.  You should never spend more on your units than you absolutely have to, because you can rest assured that your tenants will not take care of these items as you would in your own home.  Heed this advice and you can avoid worst-case scenarios such as the one depicted in the video.

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