1930, and times are finally good. Would you run?

[jeffpas]

I'm not here for lectures from people with money. Of course if I had money, I wouldn't even be doing this, lol.
But here's the situation as brief as possible.

I bought a small square stucco building on a slab foundation that once was a family store. It was constructed around 1930, and is pretty solidly built.
I renovated it completely and it has 3 little apartments. I rented them out and learned all about how hard it is to lease apartments to people. If you have done it, you will know just what I'm talking about. You don't just collect rent, lol.
Meanwhile I got laid off my job, and now depend on the income from this rental to pay my own bills. It is vital and I have a mortgage myself. Also: After many issues and problems with renters, I finally have 3 decent renters in the building. As in, they pay on time and aren't destroying the place.

So here's the problem. Next door to the little building, is a house built around the same time. There is a guy there in his 80s. I go over there to check on him as we talk now and then. He tells me his sewer line collapsed, and he had to pay someone $7 grand(!!) to dig down and fix the pipe, because the city will only pay street side, and he didn't think his insurance paid. He said they had to get a machine and dig about 7 feet down to do the repairs.

OKAY. So I'm thinking, I'm right next door. I said what happened? He said well it was just old clay pipe and a 4 foot section collapsed.
Well, odds are I have the same kind of setup, as they're about the same age and in the same neighborhood.
Am I on borrowed time?

Let me say right now how hard it is to find good reliable renters. I don't have $7 grand in the bank... not even close.... but I'm wondering what the odds are the same will happen to me, and if I should sell and get out of there. Or how likely is this to happen?
Maybe he was overcharged?? And also my little rental is on slab, so I would have to assume the drain pipes would not be so deep, as he had a basement.

Thoughts???

 

[Sparky617]

You can have it scoped to see if there are issues. They run a fiber optic camera down the line and look for issues. With old clay pipe you always run the risk of the pipe breaking and with root infiltration at the joints. You might look at having it lined, that would likely be cheaper than digging it up and replacing it.

 

[havasu]

Not knocking, but it sounds like you are "property rich, and money poor!"

My buddy has a 4 plex of apartments. He asked me to come over to find a water just last week, which flooded their laundry room, and discovered his 100 gallon gas water heater had a leak in it. Just the water heater cost him $4000, and the labor to have a licensed plumber install and dispose of the old tank was $1800. The month before, someone went into the laundry room, ripping the coin tray out of both the washer and dryer, which destroyed them, and a new "Speed Queen" commercial washer and dryer set them back $5000. In order to save money, they increased their insurance deductible to $5000, so it wasn't even worth putting in a claim for the damaged washer and dryer. I live in So Cal, where rents are very high, but they like their renters, they take pride in the apartment, so they keep their rent very low ($1100) per month, but just their insurance, water and gas costs them this same amount of money. What helps is they purchased the 4 plex for $350k, and today the 4 plex is worth $1.5M.

Apartments CAN and WILL cost you money. Whether it is for taxes, a new roof, a water leak, someone driving over a carport support, etc. You need to have "set aside" money to deal with these issues.