Getting out of retail and real estate

[AndyC]

Some of you recall my battles with the uncooperative air conditioner and the b***hy tenant. Well, that's soon going to be history.

After a particularly stressful week, my wife and I got talking, and finally concluded that the building's value as an investment isn't worth the headache of tenants, repairs, tenants, extra utility bills, tenants, property taxes, tenants... Did I mention tenants? And we decided that a retail storefront was no advantage to my business, which could just as easily operate out of the basement at home, avoiding all the overhead of phone, internet, business insurance, etc. that really wasn't worth the little bit of extra business that came in off the street. Not to mention the constant distractions, the conflicts between home and work obligations, the need to keep regular business hours, and the lack of any freaking windows in my workspace.

I'm really not suited to dealing with the public either - casual browsers, people who think I should stock a bunch of inventory for them to sort through, friendly folks who want to stand at the counter and make small talk while I'm trying to work. Just call me up, place an order, and I'll make it. And at home, I can make that order at 3am, unshaven, unwashed, in my underwear, and watching a horror movie if I feel like it, and go enjoy a nice summer day instead of being in one dreary place from 9 to 5, Monday to Friday.

So, we are unloading this building. We made a pretty substantial down payment on it, we've got a little bit of equity built up in it, and the real estate market has picked up since we bought it. We should come out with some cash in our pockets. We never really wanted a commercial property anyway, and it's been a pain in the ass all the way from obtaining a business mortgage to dealing with the tenants. Did I mention I hate dealing with tenants? We can go back to looking for a nice piece of wooded waterfront land to enjoy and eventually retire on.

I know it's the right decision because I was overcome by a strong sense of relief once I committed to it.

[Hammock Rider]

Sounds like a good plan. I'm sure the extra income form the building was meant to enhance your life, but it doesn't sound like being a landlord it was doing much in the enhancement department. I hate to sound like a dirty hippy, but at some point in life I think simplification is the way to go. Stick with what's important and what works for you and let the other stuff go.


  Besides you took a shot at something and found out it just wasn't for you. It was a learning experience and you made a few bucks to boot. That was nicely done, sir. Congratulations.

  And I firmly believe that no good can ever come from keeping regular business hours.
 

[Flick James]

Well, I'm a landlord on a very limited scale. I bought a 1-bedroom condo just before the housing crash, and just as my wife and I were dating. Had I known our relationship was going to progress like it did, I probably wouldn't have bought it. As we starting having children, the 1-bedroom condo became real small real quick. So we bought a house, but because we lost so much on the condo's value, it didn't make much sense to try and sell it, so we decided to rent it out.

Luckily, our tenant is awesome. I know this is going to come across wrong no matter how I say it, but I will say, at least based on this one guy, gay tenants are the best. He's organized, always pays the rent on time, doesn't create trouble with neighbors. He's the dream tenant. I hope he stays once the lease is up. Are all gay tenants this way?

[Jack]

That darned Hammock Rider went and said all the things I was going to say - twice as good as I was going to say them   

Anyhow, congrat's Andy, sounds like a good decision.  And a lot less headaches.   

[Ed, Ego and Superego]

Andy,
 I think its great to reduce the headaches in your life, and I'm rather jealous of it.  Good job simplifying.
-Ed

[AndyC]

Well, I'm a landlord on a very limited scale. I bought a 1-bedroom condo just before the housing crash, and just as my wife and I were dating. Had I known our relationship was going to progress like it did, I probably wouldn't have bought it. As we starting having children, the 1-bedroom condo became real small real quick. So we bought a house, but because we lost so much on the condo's value, it didn't make much sense to try and sell it, so we decided to rent it out.

Luckily, our tenant is awesome. I know this is going to come across wrong no matter how I say it, but I will say, at least based on this one guy, gay tenants are the best. He's organized, always pays the rent on time, doesn't create trouble with neighbors. He's the dream tenant. I hope he stays once the lease is up. Are all gay tenants this way?

That's the thing. You can get decent tenants with a reasonably nice piece of property. A tiny one-bedroom apartment over a downtown business (across the street from a bar) tends to only attract one kind of tenant. Nice people, but they need to be reminded to smoke outside, they play their music a bit loud, and they like to party. The commercial tenant was just bad luck. She'd actually be a pretty good tenant if she was alone in the building, which would be in line with the way she sees herself.

I thought last December I was going to get a dream tenant. Guy with Down's Syndrome. Friendly and cooperative, with Adult Protective Services watching out for him and making sure his bills get paid. Held the apartment for a month, just so his family could decide at the last minute he shouldn't move out on his own. No deposit, no nothing. Figured I could trust a social worker not to stiff me, but I guess not.

I'd mentioned in another thread about my friend with the golden touch. I can't help comparing my landlord experience to his. He bought a suburban fixer-upper in his early 20s (making a lowball offer almost on a whim), kept living with his parents and immediately leased it to a family for two years, at a rent that was almost twice his mortgage payment, plus utilities. He spent two years making repairs on weekends, then moved in with money in the bank for more serious renovations. The family had messed it up a little, but he was redoing the whole inside eventually anyway. He also ended up marrying the niece of the people next door. I haven't really been in touch with him in about 7 or 8 years, but i know by the time he and his family moved out a couple of years ago, the place was a palace. It went from being a tired-looking piece of tract housing in need of updating, to being the nicest place on the street. No exaggeration. Much of it is hard work, but it's also building success upon success.

Ironically, through much of the 1990s, I was the one there egging him on most of the time, when he was hesitant about making the offer, or pouring a driveway three cars wide, or building a deck (my design) you could park a truck on, or installing a central vac fit for a house twice the size, or any number of other things that impressed the hell out of people and enhanced the value of his property in the long run. I was the one saying "go for it" and offering suggestions and helping out. So why is it these things never work out the same for me?

What I'm doing is the right thing for me, the business, my family, and we might just make a profit, but I can't help feeling sad about what might have been. I was hoping to fix this property up and use it to secure financing for a house that I could renovate and rent, and just keep on expanding like that. Maybe even make property management my regular job. I just hate the added responsibilities and risks, I hate worrying about the price of heating oil and electricity, or having another building to watch for signs of wear and tear, and I don't have the temperament to be a hardass landlord. I also remember we moved here to slow down the pace and enjoy life more, which is harder than I thought it would be.

Cripes, I'm getting teary. It's like when I put my dog down last year. It was best for him and made things easier for us, we were prepared for it, and finally making the decision relieved a lot of stress, but about two blocks after leaving the vet's office, I started to tear up. That's how I feel today.

[Ed, Ego and Superego]

Andy, yer killing me. you are backing out of a business decision, you didn't fail man.  This too hard a self judgementJust think how much time you can spend working, or having fun as opposed to putting out fires in the properties. 

And I heard from your buddy, he's got prostate problems and cholesterol...TRUST ME! 

-Ed

[AndyC]

Well, it was also having high hopes for the retail store, and being a "real" downtown businessman, being part of that whole scene, and having a stake in the tourist trade. Just didn't work. Not enough of the right people passing by, for one thing. And retail just isn't my style. Seemed like I never got around to doing promotions or extra signage or window displays, and I don't enjoy dealing one-on-one with people who wander in and don't know what they want. I like to produce something and get paid for it, I like some personal space and no interruptions when I work, and I'd rather make a few large sales than a lot of little ones.

The overhead also constantly bothered me, having so many extra costs that weren't tied directly to revenue. Blank clothing, thread, ink, vinyl all goes into a product and it's only needed when somebody's buying. But I have to do a certain amount of business just to pay for telephones, internet, credit card processing, insurance and other crap that has to be factored into my prices, requires me to pay a bookkeeper and gives me several more things to keep track of that I don't need. Plus, I'm required to get "business" internet and "business" phone service, which are exactly the same as residential, they just cost more. And if I want a loan, I have to get a business loan, which for some reason is subject to entirely different rules than a personal loan. And I never realized until the last couple of years that bankers are insane, and their reasoning is bafflingly irrational. And having a published business phone number means I'm forever answering calls from people with foreign accents trying to get me to farm work out to their f**king sweatshops that are driving everyone's prices down.

And there's an expectation that everything's going to look neat and pretty, and I'm going to drop what I'm doing and smile and make small talk with everybody who walks in, even if they're just going to the hairdresser next door and don't really give a sh!t. And some of these fussy old bags take offense if I don't, no matter how busy I look, but they don't complain to me, nooooo. They go in and whine about what a grouch I am to that gossipy skank of a hairdresser who passes it on to everybody but me. That is, until she gets all pi$$y that I'm not acting like her goddamned receptionist.

And then I have to deal with a 30-something snotty b!tch who thinks she's still in high school demanding, like some stupid little kid, to know why she has to ask before she hammers a nail into the front door, but I have stuff hanging all over the place I didn't consult her about, because she JUST DOESN'T GET that I OWN THE f**kING BUILDING!

Whew! Catharsis feels mighty good.

You're right, Ed. This is the best thing for me, and I should only regret not doing it sooner.

[Hammock Rider]

1. Dislike excess "overhead"

2. Appreciate additional income

3. Enjoy setting your own hours.

4. Doesn't suffer idiots well

  Have you consdiered the interesting and lucrative field of..................Bounty Hunting!?

[AndyC]

1. Dislike excess "overhead"

2. Appreciate additional income

3. Enjoy setting your own hours.

4. Doesn't suffer idiots well

  Have you consdiered the interesting and lucrative field of..................Bounty Hunting!?

Alas, I think I might be too nice and easy going for that. Now that you mention it, I don't think we even have provision for bounty hunting in Canadian law.

Now, private investigation, that could be fun. Buddy of mine tried getting his licence in between stints in the military, but that didn't work out for him. Might have been because he had to get licenced through an existing agency, and put in kind of an internship before he could practice on his own.

Nope, I'm going to stick to the graphic design, signs, graphics, printing and embroidery, just without the overhead and many of the headaches. Already got somebody coming to view the building tomorrow morning, and hopefully we can unload it fast. We've owned it about a year and a quarter, and were lucky to pick it up when the market was much worse, from a seller who I think was much more motivated than we are. Our agent is a friend and neighbour, as well as a landlord in the same community, and he thinks it's a good time for us to sell, and we might even end up with some extra money in our pockets. Here's hoping.