Why I Will Be Selling My House, and Choosing To Rent.

Then again, we are all rentals. When our time is up, we cannot take any real estate with us into our grave. It stays where it is planted. Or in the case of a moveable home, it moves around. Nothing is permanent either way. Even when you 'own' a property or a few; you do not own them forever, even if you are lucky enough to get the banker off your back. You do not live in them forever. Although moving house is (or can be) frustrating to the core, however there are times when you just have to "make the move" into your new home. In ending what has been a trashy year (thank you 2021); yours truly ended up writing one of the most difficult articles I have ever had to write on Vocal Media in a while (if ever), also while in self isolation due to COVID-19. It is a heavy heart that I have decided to sell a valuable piece of real estate that I have owned for 15 years. Please let me elaborate as to why.

Rewind back to 2006. Yours truly (at age 25, a mature aged student) had just completed a college degree, and the time came to make it into the property market. Heaven and earth, I was beyond excited to sign the dotted line to purchase a two bedroom unit in the Sydney suburb of Narwee prior to the GFC, literally putting a crunch on credit and finance systems around the world. The transaction at best was too close for comfort, due to some unexpected problems with the chosen mortgage broker. Firstly, I received what turned out to be negligent advice that I needed to borrow $250K to use a line of credit facility, yet that advice turned out to be baloney. Therefore, I ended up refinancing to a subprime like loan six months later, paying $6K for the privilege. I knew what I was doing, I would always enthuse to my boyfriend at the time, and sure enough, that was the case. Receiving the first home owners grant, and a stamp duty exemption was like adding some cool sugar to the tea, in addition to inheriting a lovely tenant who sadly had to vacate in time for me to move in, as per the terms and conditions of the grant.

The open home was booked, and the successful property purchase turned out to be the fourth property inspection in order to buy a piece of real estate, and to make an entrance (let alone a grand one) into the prized Sydney property market at the time. There was a close to comfort level when the real estate agent mentioned another valuer from another mortgage firm came in to value the home, while my mortgage broker was dragging the chain yet again, due to my finance taking a little longer to approve than anticipated. This caused my broker to hang up on the real estate agent at one point. I was close to getting gazumped.

The asking rent was $190 a week at the time, and this tenant was a joy. Fast forward nearly two years later, when I had the call to rent out this property again, the weekly rent jumped up to $310. Lady luck was on my side with the tenants, together with recruiting an exceptional property manager working for a family owned real estate business. It was safe to travel and re-locate, and with the drop in interest rates at the time; it was not long, and this property became a positive cash cow quickly, despite only paying off the interest component of my mortgage. Everything was great and hassle free. I was a full fledged property investor. Sure, there were a few repair and maintenance needs, and only one $5o0 special levy incurred by the body corporate for what is deemed fair, for some external painting work. Despite that, the property was making me (the owner) a heathy profit for taking on only a small amount of risk. Tellers at the bank (my lender, for when it came time to pay the mortgage monthly) kept making somewhat complimentary remarks that I was "too young" to have a mortgage, despite being in my twenties looking like a pimply teenager at the time. Life was grand.

There was another lovely tenant, of who I felt a bit guilty for giving him his 90 days notice, in asking him to leave, simply because I wanted to live in this property again for a second time back in late 2012, when I moved back to Sydney, Australia. He left it to the last hour, and it was close to comfort knowing that I could have a tribunal case on my hands, and being prepared to change the locks; yet thankfully things were smooth sailing in the last hour. He left without any hitches. The house needed a lick of paint, as well as new blinds and other touch ups.

Things were smooth sailing in that regard, even having a girlfriend from work willing to drive me to and from the hardware store, so to not lug paint tins, and paint equipment on public transport. Bless her cotton socks. I repaid this friend for giving me a helping hand on my home improvement project. I enjoyed being an owner/occupier, and I stayed longer than anticipated, even though the same neighbours were jokingly asking me "how long would I be staying for this time."

Not long after completing the renovations, and making the property look as good as new again; one of my neighbours still owned a ginger cat who lived next door since owning the property. Upon the first occasion of living in this property between 2006 - 2008; the cat completely ignored me. Post renovations in 2012, right until 2015; I suddenly inherited this same lovely ginger cat by the same name. Ginger would meow at my door when it wanted to come inside my place, and enjoy some cuddles, despite being a dribbler due to being diabetic. Upon coming home from a train trip into the city, Ginger would meow again. At other times, I would pet Ginger on the steps outside my flat, with some of its ginger fur landing on the blue carpet, for the building manager upstairs to vacuum.

Time passed, and it was time to refinance my home loan yet again, yet to the bank of my choice this time, now that my financial position was in a tremendous place. Mission accomplished, and I managed to pay down $30K off the principal from this line of credit facility for the remaining two years of living in this property, before renting it out yet again, thanks to the healing practice of yoga, of which was a constant while living in this place, in addition to technically owning a cat, without having to pay its vet bills or feed it. And my previous property manager did a rental valuation for the bank for me for free, even though I wanted her to charge me for it.

One day, I had a dream of living in Sydney City (renting) for at least twelve months, and the aim was to accomplish this goal by April 2015, of which was actually achieved a month prior. Another savings account was set up to save for the bond, and then the time came to fix the clock on the oven, and to partially renovate the bathroom (lay new white tiles in). Long story short, and I manifested a beautiful rental home in a church building with a New York and Parisian feel, where the entrance to such a building encompasses opening a brass steel door (yes, it is a heavy one), while being greeted by a concierge dressed up in a crisp white shirt with black trousers, vest and tie, with a name badge, greeting me in a friendly tone, no matter the mood, weather, and time of day; all while walking on limestone tiles that cost $500K in the foyer alone, with all residents enjoying similar tiles in the bathroom (that is where they are more of a pain in the neck...think purple grout in the shower) together with jarrah floorboards in the living areas. It was like I died and went to real estate heaven, where I was trusted with only one routine inspection in the nearly six years of living in this building, with a local real estate agent funding each and every Christmas party with unlimited bubbles and canapes until the pandemic hit. I was even trusted to pay my monthly rent on my VISA Signature card linked to my Narwee property to pay for such luxury and opulence, with my work hours rising to pay the luxurious $540 - $560 a week rental that I was asked to pay. This is the most rent I have ever had to pay for a property. Family and friends were in love.

Rewind to my last weeks of living in Narwee, until the time came to pick up the keys to that apartment of paradise in the city, and not to impress, but rather to impress upon you that smart work and healing pays off. New tiles are being installed in my bathroom, and I learnt that Ginger was not feeling very well, and was sadly taken to the vets to be put down. The end of an era, and the famous "Narwee cat" crossed over the rainbow bridge. I was upset, and so were my neighbours, and none of this energy helped me in finding a suitable tenant for this property.

A few weeks passed, and I returned to the area to keep the property clean, and my favourite property manager agreed to only charge me 5% plus GST in property management fees this time, all for being a repeat customer. Ginger's owner was still grieving, and found it hard to look at the pet food aisle at the supermarket she was working at, at the time. A common cat food brand showed pictures of a Ginger cat, and the old neighbours were pleased as punch when I showed them pictures of my new apartment in the CBD. Narwee suddenly felt like Tasmania, and just like that.

A lovely new tenant moves in, and I received $345 a week in rent back in May 2015 for this property. Good signs of a healthy rentals market in Sydney, with the price of the property moving up slightly, while my yield is even healthier with a lower mortgage balance as well. This tenant took great care of this property, and I was over the moon with the news that she wanted to stay on beyond her lease. (Every landlords dream).

Fast forward to December 2016, and sadly this tenant relocates to New Zealand, and it is Christmas time. Kind of a like a knife to the heart. My normal property manager was on holidays, so another property manager from the same agency steps in to find me a new tenant, and amazingly, a new tenant comes forward. She is a nurse, and her 18 year old daughter will be moving in with her. That is fine for a two bedroom unit, and her references were great.

Things were fine for a bit of time, until her son had a marriage breakdown, and guess what? That's right, he moved into mums small unit, of which is magically designed for one person, and two people is the absolute maximum. Unbeknownst to me, while I was working really hard while also working long hours at my corporate job; the mother gave up the main bedroom for him, while we has sleeping all day, and barely earning his keep. Mum was sleeping in the car. To make matters worse, the hospital she was working at were cutting her hours.

I get that great people can find themselves in crappy circumstances. The best of tenants can also damage your property. Around the same time, my favourite property manager resigns from the same agency that I chose to manage my property, and now glass balls are being dropped, and we all know what that means if you walk on them barefoot? Exactly.

Complaints from the strata company kept coming in about these tenants breaking the strata by-laws, with the constant noise, mess, slamming doors, and leaving McDonald's wrappers in the common property. It was non-stop, and I sought suitable advice from a lawyer. They were also falling behind on their $370 a week rental payment. The agent was saying that they dropped them off a letter advising them of the by-laws breach, among letters to keep up with their rent, yet I still kept receiving email after email as to how stressed the building manager was (who lives right above my property) with these tenants. Comments were also said about their (Pacific Islander) culture, and they are used to mess etc. (I also felt sorry to the insurance claims assessor reading each and every one of them.)

My patience was wearing thin (and to this day, I am surprised that I did not get any strands of grey hairs) - the time came to call in an urgent routine inspection of this property. The mother was sleeping in the car. It took her 10 minutes to register that I am the owner, and the son was fast asleep in the main bedroom, with the daughter nowhere in sight. What was really shocking is that the property was gathering mould and dust, and the house was cluttered with so much stuff and s**t that you could barely move, and I am not joking by saying this. My jaw literally dropped to the floor. One of the kitchen cupboards was loose, and there were paint stains on my precious wooden floors. It is hard to not get emotional at a sight like that, especially when this property was your previous home on two separate occasions prior. Plus I had to pay a decent sum in repair work, and seeing the condition of the property, that was totally unfair. I owed the building manager an apology (through no fault of my own), yet he deserved to hear it from me direct. He invited me into his home upstairs, after leaving my current routine inspection, and we had a chat, and my apology was accepted. It was really wonderful to see him again.

These tenants were evicted, and did not get a cent of their bond back, also to pay for the rent they owed upon vacating, and for the cleaning bill, and to fix up the rest of the property. At the work Christmas party not long thereafter, I drank and ate a few too many (still less food and drink than the others in attendance) and was taken to hospital as my digestive system shut down.

I was (and still am) grateful for the 100 vinyasa flows/sun salutations I did on the 21st of December 2021 to bring in the Summer Solstice in Australia, because I then went to pay the property a visit three days after these nightmare tenants vacated the property, and I had a set of keys - luckily - until one of the keys did not work, learning that these tenants changed one of the locks without my consent. It seemed like they were locked out one night, yet that is still beside the point. All I could do was act like a spy to my own home (like a burglar too, you could say) by only taking photos from outside in of the damage, and then explaining to the insurance company in 100+ pages of letters and paperwork, to get my loss of rent claim approved, as well as covering for the rest of the tenants damage.

The new year comes in, in 2019, and the agent was on the ball. She asked the cleaners to go in twice to clean the property, and from that alone my anxiety quickly turned into trust. I get new tenants a month thereafter, although the weekly rent dropped to $340 a week. I did not mind, as the property was still positively geared/positive cash flow, despite the strata bill rising significantly.

Everything was fine, and I got no complaints, not until they were about to vacate back in July 2021. In a nutshell, the delta outbreak in Sydney back in June 2021 caused some damage to my investment property. Due to the restrictions, one of my neighbours was apparently being difficult and noisy, and therefore my tenants gave in their notice to vacate, while the agent failed to give me the 21 days notice required...instead I get 12 days notice on the 9th of July, that they will be vacating the property. It was sad, yet little did I know that (the agent was withholding this information from me, until I pressured them to put the property on the market) my vacating tenants because a close contact on a positive COVID-19 infection, and therefore had to quarantine for 14 days, making them vacate my property three days beyond their original vacate date, not receiving the three days rent I was due. Despite Sydney being in lockdown, no open homes were allowed due to their need to self isolate from others. At the time they vacated, cleaners and renovators were banned from visiting properties in hotspot areas, and sadly Narwee was in a red flag area, with the heaviest of movement restrictions and infections spreading. Plus a moratorium on evictions was placed for existing tenancies, of which made it harder for me to attract a new tenant. Plus these vacating tenants started to slam the door so loudly, that once again I received more complaints from the strata manager. And they got their bond back.

I was not happy with how this long serving agent had let me down. Others agreed, seeming as though their current Google review rating has dropped from 4.5/5 when I rehired them back in 2015, to a now measly 2.9/5.

If this is not authenticity, and in being remarkably real up to this point, then I don't know what is.

The time then came to hire a new property management agency, and therefore a new property manager to look after my hard working investment, and in saying that, one that I truly worked hard for. My new agent has a 5/5 Google review rating, and their service has been exceptional since I contacted them back in August 2021. Thankfully the old agent returned my keys via express post.

I had to be patient, as Sydney was still in a long 15-week lockdown due to the delta outbreak. That meant that I had to wait a bit for key cutting services to re-open, and to then send two sets of keys to my new agent, while I kept a set.

Already I was impressed with the video walk through, and the video link to the initial inspection. I did warn the new agent that the property needed to be tidied up, and I was gobsmacked to see more kitchen cupboards off their hinges. I was crying at the condition of the property, including mould on all of the windows, cracked glass, and the built in robe door off its hinges, despite being restricted from living a great life. All in all these repairs costed $5K, plus nearly $800 for the cleaning bill, on top of the $1500 paid for the removal of the mould, even though the cleaners had to remove the rest of it. Lessons learned for sure, and this is why I made the switch, and communicated my needs as a landlord with more clarity and finesse.

The above took a bit of time, and come late September 2021, the property was on the rental market. The asking rent dropped to $300 per week, and despite feedback from another prospective tenant saying that a similar property but in "better condition" (f me) is renting for $265 per week, I had no choice but to drop my rent to $260 per week. I got a suitable application in from a single person (I turned down the families, due to the problems from previous tenants, and to be on good terms with the building manager and neighbours) but he wanted $250 per week on a six month lease. It felt like I was giving the property away, and more so when he came back to measure the space for his fridge to come in, noticing a hazard that was not picked up. I gave my new agent beef about it, and them seeing how stressed out and upset I was to this point (selling this property is now feeling so good, and getting strong hunches about it) they agreed to get a handyman to fix it for free. December 2021 (as at the time of writing this) is the first time in months that this property put a bit of money ($400) into my bank account, as opposed to costing me so much money and heartache for a change.

To make matters worse, this new (nit picky) cheap tenant failed to sign his lease in a timely manner, without me getting onto my new agents demanding this, considering that I gave him some generous leeway to move in on a day that suits him (Halloween, ooh how spooky), where it turned out that the agent sent many emails, and finally with a phone call, he said that he wasn't sure if that "hazard" had been fixed. Ok, off with the fairies. I get that the times are (and still are) very tough for all of us, yet no one is a mind reader. If he was buying that property, he would have lost the sale with his tardiness in the timeliness of signing that all important paperwork.

Otherwise he is a good tenant...for now. Yet he does not know yet that he will need to vacate in four months time from the end of 2021 for yours truly to move back in, and further renovate the place on my own terms ready for sale. In saying that, I will give him 60 days instead of the 30 days notice that I am required to give him by law. Who would want to give away $125K to the Government on a once great investment that caused so much heartache in the end in capital gains tax? Of course you wouldn't, which means I have to (it is not negotiable) live in this property for six months before putting it on the sales market.

I am grateful that the $250 per week in rent pays the landlords insurance, property management fees, water bills, council rates, and strata; yet no one takes as good as care of your property as you would as an owner/occupier. That is human nature. This is why I feel like I am giving the property away, despite the tax deductions. Not to mention the stress and uncertainty of tenants and their behaviour, and when they choose to call in repairs, which is definitely not on a landlords term. And they can leave at any time, giving you less notice to vacate as you need to give them in similar circumstances, and even on hardship grounds. This is why it is no longer fun being a property investor. My strata levies have sharply risen from $300 to $800 a quarter in that 15 year time period, and holding onto this property for 15 years, I do deserve much better.

Sure, this all may come across as venting, yet there is a profound difference between authenticity, which is sharing the truth, and how that truth aligns to your values system or not, in being remarkably real as to what is real, as opposed to what is a made up story. This story for Vocal Media's Remarkably Real challenge consists of cold, true, and hard facts and experiences upon the writer owning this property in a nice but now rough suburb of Sydney for over 15 years.

Upon the sale of this property, I can buy a three bedroom freestanding investment house (and one I could live in later, and yes mom, security is not going anywhere) in a rural area for half the price of this home in Sydney that I am going to sell in just under 12 months time (again, as at the time of writing this) for zero debt, and not having to pay a useless strata levy (apart from providing builders insurance and cleaning services...what else do they do...seriously?) with the same rental yield (as in $250 per week).

The tenants are not the issue, but rather the quality of the tenant; and over the last five years, I have had an unlucky streak in that regard, and despite insurance (and yes, excesses do rise substantially when a property is vacant for more than 60 days, pandemic or no pandemic) - this is still a third of the time of ownership from me (the writer), and that is a dangerous thing. It is like playing Russian roulette with your finances, and that is (definitely) a dangerous game for me to play. For any investor to play.

You might be thinking, but hang on Justine, why do you want to sell this asset (despite still being an income producing asset) and give up some security? With renting you do not receive the capital growth, and isn't rent money dead money? Yes, you may be right, yet property investing is no longer fashionable, and cryptocurrency and business is, as well as holding onto precious metals just in case.

Renting is a sign of maturity, and in nearly all cases, it is cheaper to rent than to buy; and especially with an oversupply of rental properties in many parts of the world (and yes, it is true in Sydney, with or without the international students) - tenants are getting the upper hand with more room to negotiate rent reductions, and to sign a lease on their terms. Then again, my current landlord is begging me to sign another 12 month lease, and on the same day prior to my second routine inspection. Sure, renting can be seen as dead money, as you do not get the capital growth, yet if you buy a property in most places of Australia right now; capital growth is hard to come by. Back in the GFC days, there was blood on the streets in the US housing market, and speak to any one of those owners who faced foreclosure, and they would advise you to rent, and rent some more any day of the week. People are now renting cars in order to cut down on costs. Same goes with houses. Then again, The Barefoot Investor states that having an investment property can dilute your savings.

With renting being a sign of maturity, 15 years later, I have learnt the hard way to never ever buy property in an area where you are unwilling to live in that area. If you are a great tenant, and you keep the rental home clean, tidy, damage free, and pay the rent on time; you will always have secure housing, and the chance to snap up the best houses on the street, while tenants that never get their bond back will have to settle with the less impressive properties. You can also leave at any time beyond your fixed term lease. With ownership, things are more complicated. With renting, if you run a home office/business, you can claim a healthy portion of your rent on tax, of which you cannot do in your own home.

Build to rent properties like LIV Indigo in Sydney Olympic Park are starting to become really popular, and especially in the city (and area) where I want to live in. Pets are allowed (and they are great for your mental health, enough said) no questions asked, as well as choosing to actually renovate and furnish your home, just the way you like it. Sure, it is worth paying $30-40 per week above the market rent for these perks alone. You are a renter, yet you are treated like an owner/occupier with the perks of ownership with no debt and strata bills etc to pay. And no bonds to pay. Utilities are shared, and co working spaces, games rooms, white goods, and other top notch facilities are included, in what are secure leases, where you are encouraged to stay for as long as you want. There are people like me selling their home/property to move into a build to rent. The community aspect in build to rent homes is unreal, with parties and clubs so to make friends and really connect to your neighbours, rather than them feeling like a stranger in the mail room. Just read up on build to rents, and people of all ages and backgrounds are now attracted to them like super glue.

Simply put: being a landlord requires extremely thick skin, and quite frankly, my skin is not thick enough to deal with tenants and their nit picky ways anymore; even at open homes. "It's too small." "It's too big." "My fridge cannot fit in here." I cannot change the layout of a property to suit one person, and neither can any other landlord or property owner. And I sought out professional advice, and a psychic reading, and the advice is to sell and move in a build to rent, where you have the "security" of ownership. You also need to trust your heart (regardless of what the head and other humans such as loved ones think), together with those gut feelings. And where you will be much happier. If I am much happier in a build to rent, then everyone around me is much happier, and that happiness will extend to my health, my finances, and to my business. Then others around me will be happier. If anything, I hope you now become remarkably real with some area/s of your life that was once working greatly for you, and for which no longer is. The law of impermanence. It is what it is. There are better investments out there. And I do not want to live in Narwee, together with the stress of holding unnecessary mortgage debt (with the credit cards added in), bills, and tenants, and the abundance of choice they now have available on where to live nowadays. It is a rough part of Sydney now. I never knew that a pandemic would help make this major life decision for me. Enough said. This article was also brought to you from the writer (me, myself, and I) in mandatory self-isolation right now. You're welcome.