The second step of my five year plan to FI/RE is to sell my Las Vegas Rental. When I know what I want and set a goal, I usually get what I want and achieve that goal. My problem is often not knowing what I want or being indecisive. This has been the story of my life. There were a couple of times that I knew exactly what I wanted and I went after it.
In my younger and more foolish days, I wanted to be a homeowner before I turn thirty. By my late twenties, I have worked a few years since graduation, and saved up a good chunk of down payment. During the week I would search for open houses on mlslistings and realtor.com, and then drag my mom to go see them on weekends. All I know is that I wanted to be a homeowner, but I have no idea what I wanted beyond that. Sometimes I would find something I like, but they were either out of my budget, or not in a location where I wanted to live. As my twenties were ticking away, I was becoming more and more desperate to become a homeowner.
During a trip to Las Vegas with my friends in 2005, we saw billboards after billboards selling brand new condos. We have heard of vacation rentals from friends, and have stayed in one of my friend’s family rental, and we loved it. My college friend and I decided we wanted a rental in Las Vegas, so we bought a condo. Neither of us knew anything about the real estate market in Las Vegas, nor has experienced a real estate bubble. Long story short, we bought the condo at the peak of the Las Vegas market, and it crashed as soon as we closed on the condo. But I was a proud first time homeowner.
We found ourselves a tenant and a property manager, and rented out the place for positive cash flow. Things were looking good, right? Wrong. Things went from good to bad to worse in a matter of a year, after our first tenant moved out. Our property manager was putting in bad tenants, and charging us an arm and a leg for every little service on top of the 8% he was getting. My friend couldn’t get along with the property manager, so we ended up firing him after a few years. We have been managing the property ourselves since then. I took on the responsibility of communicating with HOA and taking care of the finances. From then, it has been a headache, after headache, for me to deal with neighbors, HOA, maintenance and insurance every year.
The condo community has a bunch of old retirees, and they nitpick about every little single thing. Seriously, they have nothing better to do than to watch renters’ every move, and report them to HOA. We get so many violations and fines that I couldn’t even keep up with. In hoping to get fewer fines, we decided to rent only one room out to a single person. This decision significantly cut our rental income and resulted in a negative cash flow of about $250 a month. What’s worse? The violations and fines did not stop. Since we live out of state, we couldn’t make it to every single HOA hearings to fight the fines. We ended of paying for every fine. It is a total nightmare.
This property no longer aligns with my life, and serves no purpose to my goal of early retirement. I need to sell this property as soon as possible, even at a loss. I have discussed this with my friend, and he agrees this property is doing more harm to our welfare than good. We will sell this property as soon as the current tenant moves out. Unfortunately, we just put a new tenant in the property in February ,and he has signed a one year lease. The earliest I can get rid of this condo is spring of next year. I am looking forward to it.