Just a few years ago, I was completely against real estate. I wanted nothing to do with it. I thought that in order to qualify as a real estate investor, you had to pass this unofficial test to prove that you were a money-grubbing jerk who would step over your mother’s dead body for a dollar.
Thanks to BiggerPockets, I realized that not all real estate investors are like that. I learned that there is a community of real estate investors who are willing to give advice without compensation. After 11 months of research, networking, and interacting on BiggerPockets, I was able to go from a hater to closing on my first house hack.
Nine months of landlording later, despite all of the research I did, I still made mistakes. Since I learned so much from other people, I am morally obligated to share with you my three biggest mistakes that I made as a first-time landlord and home owner.
Mistake #1: The Up/Down Duplex
My first purchase was an up/down duplex. My plan? To rent the top half and Airbnb the bedroom in the bottom half while making a quasi-bedroom out of the living room. That plan 85 percent succeeded.
What I did not realize was the noise transfer from the top to bottom floor in an up/down duplex is almost unbearable. I can hear EVERYTHING that the folks on the top floor are doing. And yes, I mean everything—from them walking, to their TV, to normal conversations and other noises you don’t want to hear (let’s just call them ‘personal’ noises). This gets very annoying, very quickly.
Aside from the noise, another problem with the up/down duplex is gravity. Everything runs down. That includes plumbing. The water that my top tenants use comes through their pipes down the pipes in my unit into the main line and out to the street. What does that mean? If there is a blockage, guess whose unit gets flooded with a disgusting mixture of kitchen sink and toilet water? ME!
Related: Why I’m Not House Hacking (& the Strategy That Will Cover More of My Rent)
This is not to say all up/down duplexes are like this. My advice to you is that if you are thinking of purchasing an up/down duplex, make sure you are with someone else. When you visit the property, have them walk around upstairs while you are downstairs. Have them walk and talk, as noise transfer can be both on impact (walking, dancing, etc.) or airborne (talking, music, etc.). If it seems kind of loud, then it will be almost unbearable when you are dealing with it every day.
On the plumbing issue, it is tough to test this before getting in. I suggest getting a sewer scope done and asking the technician to scope the plumbing lines within the property as well, from the sink of the top unit, through the bottom unit, the main line, and out to the street (or septic tank). This will make sure that the pipes are not blocked, in good shape, and will have a lower probability of clogging.
Mistake #2: New Build or Complete Remodels
The up/down duplex I purchased was a complete gut and remodel. The only thing that remained the same was the exterior wall—at least that’s what they said. Supposedly, there was all new plumbing, HVAC, water heater, electrical, roof, and appliances, all of which were under warranty.
The problem with all these systems working together is that they had not yet been tested in a living situation. Most of these upgrades would have failed the “real life” test. For example, it turns out that only 50 percent of the plumbing was replaced. The sludge from the previous occupants was clogging the pipes, which caused a backup in the lines such that my unit flooded every time I turned the kitchen faucet on. The smell was rancid, but the hundreds of flies loved it!
Plumbing was not the only issue. For two to three weeks in the heat of the summer, the AC would continuously trip the electrical breaker and stop working. My Airbnb guests (and I) were not happy. After the electrician and the HVAC company played the blame game for a few weeks, the HVAC company replaced the unit free of charge, but it was very expensive in terms of comfort.
Keep reading the article “3 House Hacking Mistakes I Made (& How I Could’ve Prevented Them)” here:
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