We have repeatedly looked at the real estate and property issues on the blog financially. Now Joseph has approached the issue from another angle. Because when you give your house a rent, you will not only have a financial aspect, but you also have to deal with people. If you are lucky, you will have good tenants. If not, you may have a lot of problems. Joseph’s old skate on the market, or until he sold his apartments. Follow his writing.

I have been renting a home for a long time, but there are a lot of renters in the family and in my surroundings (quite a lot).
Some people have bought old homes in the downtown for long term rent, other smaller few condominiums in the agglomeration, rent them out, and others have bought a lot of parking spaces for rent in underground garages, but there are others like WindBNB, so I’ve seen some over the years.
By the way, I have sold most of my homes and moved to the countryside – it was enough.

A little outlook: 90M has been mentioned several times as a target limit


True, it depends a lot on the person’s marital status, where he / she lives, etc., but I find that at home, especially in Budapest, so much money will not be nearly as “rich” as many people think. Outside of appearances, there are more people in my environment between 500-1000M (net worth), and as I have observed, many people imagine a standard of living of just $ 90-100M. you can finance it by one order of magnitude more money (or not! just capital + work).
Otherwise, it’s not the rich who have a lot of money, but who have little desire. Above one level, the amount of money does not have a great impact on the quality of life, and that level is much lower than many people think. Miklós also wrote many times about the demands of the needs.

What is common in many places is that unfortunately many people compare home leasing to other passive investments (PMUs, ETFs, etc.), but unfortunately home leasing is not a completely passive investment. Many people are not prepared for this, especially for the first time. More risk, more macera, unexpected costs, etc.
I started to gather a lot of things, but it would have been more like a book if I had written everything down, so I will only describe a few cases that have occurred, some interesting picture:

– The Dealer: The tenant is a well-placed young man, always paying properly. Then once the police break the door and take it in handcuffs. He was a dealer, but not on the street level.

– The Alcoholic: The lower neighbor is an alcoholic who is a tenant in a municipal apartment. Anno was a pipe break in my apartment, the neighbor took the money from the insurer to soak, of course he was elite. Then, from time to time, he repeatedly announced the soaking, he thought he would come in several times. Regular circles with the person, the municipality, etc.

– Sick child: one of the tenants had a very seriously disabled child (they knew that the child would not survive, so he carried it, and yet). She was understandably not in a good mental state, and unfortunately her problem was already with her landlord.

– The Flying: I give the young lady a flat and then her partner appears over time, a real “hard case”. The end was that she had just beaten the woman, she had fled, and I stayed there in the apartment. Unfortunately, this was also difficult to solve.

– Family Problems: In a monthly payment, the husband and wife point to each other that the other has not contributed part of the money. What do I have to do with this?

– Construction: They start construction on the toothpick next to the apartment, before, during and after, they take pictures in every direction, look at the cracks in the apartment, keep mailing, even I deal with it.

– The sewage pipe: the sewage pipe has not fallen enough + the neighbors throw everything in the toilets, the result is that the toilet in the apartment is blocked every month or two. There is no solution because you have to beat the bathrooms and the walls of the rooms through five flats (more have been renovated before). Not a chance.

– Multiple tenants: I rented two apartments next to each other, my tenants cobbled together and harassed me.

– General assemblies: it is selected by its resident community, but most are case studies. I was just at the beginning, but I gave up.

– The burglar: they broke into one of the apartments and took things away. The insurance only paid for the door repair, not the tenant’s stuff. I had a problem with that too.

– District property tax: approx. 1500 USD / m2 / year (!). Yeah, how’s that? Yes, plus fines and default interest.

– Neighbors: If tenants clash with neighbors, chances are they will find the landlord, typically through a common representative

– Parking: The tenant parked his car so that one of the occupants was unable to fit comfortably in their usual place, they interjected and broke the tenant’s windshield in the morning. I could listen to that too.

– WindBNB: Adjacent homes are already short-term rented, so they don’t take out their own long-term because they are always on the go, going out at night, etc. Who would live between two WindBNB apartments, especially when renting it?

– Bakery: The bakery moved into the shop below the apartment, they start a little early, the noise of the machines comes up to the apartment. This will not be a problem for the tenant either, as he goes on. Others will not take it out.

– The bathroom: after a soak, it turned out that the bathroom was not in the right place in the apartment, all it took was to move it away. It wasn’t cheap.

– Newly built apartment: has not received the commissioning, is not completed, litigation has been going on for years. For others, warranty issues, etc.

– It disappeared: the tenant pays for years, and then disappears overnight, the apartment in ruins. The deposit obviously barely covers anything from the renovation. (A typical deposit is a 2-3 month rental maximum, which is a joke if anything needs to be renewed and even many can’t put it down)

– Mouse: The apartment is downstairs and the tenant is bothering the owner to let the mice come in and do something.

– The overhead: the tenant says he has a lot of electricity bills. I tell him that TV is going all day and it also consumes electricity. That’s him: I’m talking back together, once electricity, once electricity, and anyway, the TV broadcast comes from the air, so I don’t have to pay to avoid being beaten.

– Cellar: Tenants took the padlock out of the lockable cellar box when they moved in, a neighbor from the house immediately packed it and sealed it. As there was no official record of who had it, it was quite problematic to recover it.

– Renovations: Something had to be done in the apartment neighbors often found that there was a lot of noise, etc. Then they kept knocking, and then I listened to them from the tenant.

– Cleaning: A tenant, without any sign, told me that the apartment was not properly cleaned when I let it out. Then why did he take it out and not bother him anyway? (taken out about 3-4 years before and was completely cleaned)

Common cost: thicker one-off items can be paid for renovations, there have been roof renovations


Good Finance: tenant candidate on view: The apartment is nice, but where’s the curtain and cutlery dripping (!) Into the kitchen? Think of Good Finance, but thank you for being tired.

One could go on and on for as long as there is just one story from a story to a book, many funny and unfortunately less funny. I wonder if a property manager will do what in such troublesome cases, I guess he won’t get into these situations unnecessarily, just call the owner to come in, there is trouble …

As long as there is no problem, you do not need the manager, because they pass the rent and the utility, go all over the net and phone, if something goes wrong, the tenant can take care, call the master and then do it and deduct. (Max requires personal presence for release / receipt).

Comments can spell out the individual points of what can be solved / prevented, but that’s not the point. I am smarter afterwards, I have experienced quite a few things over the years, but there have always been new cases, not everything can be predicted.

Cost of housing


Someone may buy one (or more) homes and never have a problem for many years, but in the long run, we have little chance, especially with more homes. At first you are enthusiastic, but after a while you can get bored with it, and you can’t turn it into money when tenants and your apartment are full of people’s heads. It may still be worth the cost of housing, but unfortunately they are, and will be, because the apartments are rented by people and not ETFs.

But to be an example with numbers, one of the flats I bought clearly dropped the price of the flats due to the crisis. CHF took the loan as an investment before the crisis, couldn’t / did not want to, paid the loan for a while, the capital debt went up, and finally sold it to me much cheaper than I bought it and I paid the bank. He told me he calculated afterwards, if he did nothing then the price of the flat would be clear on his account. This is an extreme example, but it does show how big an apartment can be.

Price will probably go up in the right places over time


I’m not saying that the apartment is a bad investment, its price will probably go up in the right places over time, but at what rate, with what fluctuations, no one can predict.
For me financially it was finally worth this price increase, but because in the crisis the neighboring apartment could not be sold for half as many years as I bought mine in 2003 (the parameters were the same), it was not a cheerful state. In the end, it went for 40%, the owner needed the money and there was no buyer.

So there has been such a time, and it could come down to such a fall any time. Not sure, but maybe the same is true for problems, everyone should consider these before going in.