Another relatively easy month. Hooray! Here’s the rental property report for October 2016.
Self-Managed Rental Property Report:
Yet another month of smooth sailing in the rent collection department. One set of tenants paid a couple of days before the first of the month. Two sets paid on the 1st, and one paid on the 2nd. I gotta tell ya, I absolutely love being able to log on to my bank account and see the money magically appear in my accounts with absolutely zero effort on my part.
Abnormally High Water Bill
When I first bought the building, the apartments were overcrowded. By my estimate, there were about 26 people living in the building. (The max should be 20 total for the building). The greenbelt on the property was natural turf, which required watering and mowing. I think all of the toilets were original 1981 installs. They were tiny and weird, and I didn’t see anything that indicated that they were low flow.
Just after escrow closed, the old owner moved out, so that dropped the tenant number down to 20. No other immediate changes were made. At that point, the water bill indicated usage of 24 units of water.
After I finally got all the old tenants out, I replaced all the toilets with ultra low flow toilets. I ripped out the lawn and replaced it with artificial turf. I also ditched the sprinklers entirely and used only drought tolerant plants. With my current set of awesome tenants, I now have 10 tenants total in the entire building. Water usage dropped to about 14–15 units on average.
So you can imagine how shocked I was when I got the water bill this month and it showed 53 units of water usage!
Checking in with the Tenants Regarding Water Usage
I sent the tenants an email letting them know about the problem and asking if they noticed anything weird: leaking hose bibs, running toilets, etc. All four sets of tenants responded saying they hadn’t seen anything. One set was even out of town for three weeks, so the bill should have been lower than normal.
I will probably have to call the water company to see if they have any ideas. I’ve been dragging my feet on that because I’m pretty sure they’re going to tell me to hire someone to check for leaks, and I don’t want to pay someone to do that until I know that it’s a consistent problem. Leaks tend to be consistent, while tenant usage issues are generally not.
There’s also a chance that it could have been a meter reading error. Most utility companies have switched to electronic metering, so it’s virtually impossible to have a meter reading error. But the building is in a quirky city. So it wouldn’t surprise me if they manually read the meters and if someone messed up a couple of digits. If that’s the real problem, it will flush itself out (ha!) next month.
How would it flush itself out? Let’s say the meter started at 1,000, and at the end of the month, it showed 1,023. But the meter reader read it as 1,053, so they bill me for 53 units. Well, at the end of the following month, if the meter reader properly reads the meter at 1,043, the bill will show that I started at 1,053 and ended at 1,043. Negative 10 units of usage. I’ll get a bill credit, and eventually it will even itself out.
I don’t know if that’s the issue. I might have to call the water company. We’ll see.
Now this is funny. The apartment building my family and I used to own is in the same city as this fourplex is. Every year with our city business license renewal we paid a fire inspection fee. To my knowledge, the fire department never inspected. They never sent any pass/fail notices and never contacted us to schedule an inspection.
So I was talking to my friend and former property manager, and I mentioned that. She said that was weird, but she hadn’t ever been aware of a fire inspection on our property, and she managed it for at least a year and a half. If they inspected annually, she would have known.
Less than a week after that conversation, I got a call from the city fire department. They said they were doing the inspection and noticed the fire extinguisher expired. In 2013. Wow. The former building owner was a corner-cutter, so I wasn’t all that surprised that the extinguisher had expired. I should’ve checked it, honestly. I don’t recall the building inspection or insurance inspection mentioning that it was expired, or I probably would have dealt with it earlier.
But what really surprised me was (1) they did a fire inspection, and (2) they were just noticing now that the fire extinguisher expired three years ago! That either means they didn’t inspect since 2013, or they did inspect and didn’t check the expiration date on the extinguisher.
Anyway, so I told the fireman I would get it fixed right away. I asked where to send proof of compliance. The fireman was clearly thrown off by the question. He stammered a bit, and then said they would come back in a couple of weeks to double-check. Yeah, right. See ya in another 3-4 years, fellas.
Replacing the Fire Extinguishers
So after the fire inspection, I searched for “fire extinguisher recharge” on Yelp. The first company that came up had good ratings (4 stars plus), so I called them. They said that if I brought the extinguisher in, they’d recharge it for $15. If they had to come out to the building, it would be $45. I opted for the $45 option. That would save me about 2 hours of round-trip driving (in traffic, because it would be during normal business hours).
I also confessed that I think the extinguisher is in a locked cabinet, and I probably don’t have the key. I say probably because I got some weirdo keys from the former owner and I didn’t know what they went to. I’m not sure if I still have any of those keys, or if I tossed them thinking they belonged to old locks that aren’t around anymore. Anyway, the company said no problem. There are only a few types of keys that are used on those cabinets, so they probably had one that fit. If not, they would cut off the lock and put a new one on.
The technician called me when he got to the building and said I actually had TWO fire extinguishers (oops—good to know). He also said that they were so old that they need to be pressure tested as well as recharged. The pressure testing cost is the same as buying a new extinguisher, $60 each. He recommended the new extinguisher. I agreed. So $120 later (plus a little sales tax), the issue was resolved.
Trips to the Building
One! I went to the building on October 1 to collect the laundry money and check on things. Everything looked pretty good. The new towing sign looks okay, although they left some silicone goobers on the wall. I don’t think I can remove them, so I will try painting over them with the building color, at least.
The plants at the front of the building are starting to bug me, now that the building itself looks great. Once I pay off the HELOC (very soon!) and build up a bit of a reserve, I will probably do something to make that area look nicer. For now, it’s probably okay.
Wrapping Up: the Numbers
Total time spent: about one hour. I spent probably half an hour dealing with the water bill issue. The fire extinguishers were probably another half hour (a few short calls to coordinate and follow up). Assuming I saved $637.50 (10% of the rents) and spent only an hour working, that’s a killer hourly rate. 🙂
The water issue may not be resolved, so next month may be a little different, but we’ll see. So far this self-management is going really smoothly, though.