Adventures in property management and real estate investing
A lot of people wonder what I do for a living. Are you still a journalist? An Author? Something else? As the days, months and years progress, I suppose I’m a bit of all three – plus, an audio editor, by the way. But most of my time is spent as “something else,” namely, a property manager and real estate investor.
I’ve always been a huge proponent for property as an investment and for recurring income, especially for women. Owning property has supported my lifestyle for years and subsidized my writing habit (you didn’t think journalism supported my travels, did you??). I am so grateful. But it also takes a lot of work.
At this point, I have three properties I manage, and a fourth on the way. Each provides different challenges, but also opportunities. And I’m learning every day.
You certainly don’t have to manage your own properties. In fact, if there’s a lot of turn over, I’d suggest you get a manager – especially if you’re bound to travel or don’t want to get those early morning or late night crisis calls. Remember when I got that panicked call about a failed solar toilet and I was deep in the Amazon jungle!? Yeah, that was fun (and expensive!). However, property managers take up to 20% of any gains, and sometimes more. In my case, and with my already thin margins, I wanted to keep the proceeds.
To make property management easier, I’ve always prefered long-term renters. I also try to stay on top of repairs so that ongoing items that need my attention are relatively small. That doesn’t work for occasional big capital expenditures, like a new roof, but that can’t be avoided over time. You just have to budget that in.
More recently, I’ve tried the Airb&b route. In one case, I am merely trying to cover outlandish expenses while legal documents are being worked out for an eventual sale. This rental is more a liability, but it’s a family matter so I can’t necessarily hit the road. I feel responsible for it, so I’m sticking it out until the bitter end (we can go deep into Al anon and why I’m always the one holding the bag and cleaning the mess, but that’s for a different post).
This property in Morocco is full of interesting property management lessons. For example, this week I learned that it is essential that I explicitly state that guests are NOT allowed to slaughter a sheep on my property. Especially, but not only, during EID.
Also, guests write to ask whether two people may stay together in the house even if they are not married. If so, will they need to produce their marriage license? “Of Course you can stay! Come on over!” I responded enthusiastically. Before understanding the law. Then my co-host said he would not let them in if they were not married. You see in Morocco it is illegal for unmarried couples to stay together. Oooohhhhh.
Morocco has proven to be a challenge on so many levels. I don’t even know where to start. This is not about the country or the beautiful people, but purely a reflection of the complicated situation my aunt left when she died. Everyone is wanting a handout, because that’s what she offered. Money bought her friendship and relative ease. Because I’m family, they see me through the same lens. But Boy are they wrong. Every. damn. person. wants something from me, and all have long, elaborate justifications as to why I need to give it to them/pay this and that, etc. I can’t even tell you how excited I will be to sell this place. These are hard lessons, and certainly not what I recommend to others.
Renting my mother’s Earthship after her death was a challenge as well, and so was selling it, mostly because of financial limitations from traditional banks. Because it was off-grid and not attached to the city water system, the banks would not give any buyers a loan. A buyer would have to pay in cash. This is most often the case in Mexico, but rarely in New Mexico. And the kind of people who have a couple hundred thousand in cash laying around are generally not seeking a wild and crazy Earthship in remote New Mexico.
The workaround in this case was to offer an owner finance, whereby the buyer had to come up with a down payment, but then I would serve as the bank requiring monthly payments, in this case for five years at a small percentage. At the end of five years the buyer would have to pay the balance. In the event the buyer renegs or has to pull out, the seller can legally reclaim the property (and all the payments made) and the process starts again. In my case, I had a fantastic buyer who never missed a payment and was so grateful to be able to buy the house without a traditional loan. Win-win.
My goal these days is to sell any asset I had in more complicated areas (or where new Chihuahua farms popped up next door. No joke.), and reinvest in better, more profitable locations. Yes, the cost can be higher, but so can the returns. This is what I suggest for others, too.
When I talk about properties, I want women to buy in known areas, where the property value is growing, and where resale can at the very least give you what you put in, if not a considerable profit. I do not believe Morocco is one of these places. I do think Mexico is.
I don’t talk about this work with a lot of people. I have a group of other women investors who I cherish, though I’ve never met any of them in person. But it helps to have people familiar with the process and the work. I’d love to share some of this knowledge with others, and with women in particular. My general experience is that many women know very little about real estate, and are intimidated by the process. Some may not even have a separate bank account from their husbands and partners.
If any of this speaks to you, please consider joining me in San Miguel de Allende this Day of the Dead. From Oct 29-Nov 3d you’ll stay in a fantastic home in the heart of San Miguel and learn about real estate in Mexico. You can ask questions and learn how other women are supporting themselves financially through real estate. AND you’ll participate in one of the most wonderful, magical annual celebrations: Day of the Dead!
Also, if you all like hearing about my real estate experiences and challenges, please do let me know. I’ve felt reluctant to share this part of my life outside of investing circles. Yet as time goes on I realize how much I want to share it with you all.
Adventuring A to Z 