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woman's hands tied together-How not to invest in real estate – don’t do what I did!

How not to invest in real estate – don’t do what I did!

If you want to know how not to invest in real estate – don’t do what I did with my first property! Do the opposite and you’ll be a raving success.

Over 20  years ago, I invested in a 25-year-old duplex. The plan was to live in the top suite and rent out the basement suite. In addition to needing a lot of lipstick and paint, it also needed a bathroom installed in the downstairs suite.

Take your time hiring a good contactor

I had no experience doing any kind of home repairs and certainly no renovation experience, and I was clueless when it came to hiring contractors. So, I hired a contractor who said he was available, I didn’t check references and paid upfront. Big oops.

Did I mention I was paying rent and utilities on my rental property while paying the mortgage, utilities, and contractor fees for two months? I was tapped out financially, completely stressed out,  and hadn’t anticipated any delays or additional costs. Another newbie mistake.

Because the contractor was as slow as molasses, I offered to help him with the painting in hopes it would motivate him. Wrong!  He never did finish any of the painting –  I ended up painting the entire house myself.

Do your homework  – know what’s involved in completing renovations properly

I didn’t know anything about pulling permits before completing renos and the contractor sure as he-double-hockey-sticks didn’t offer any information. After two months of him doing horrible work slowly, I fired him. He was so upset he left his tools, coat, boots – everything behind. I loaded them up in my car and dropped them off at his work.

Unfortunately, he had started the downstairs bathroom reno. After calling every plumber in town, I finally found one that was available and trusted they’d finish the work properly.

Shoddy workmanship costs big time

A year later, the tenants told me every time they showered; they noticed water under the floor. We found black mould under the floor, in the bathroom walls, and adjoining furnace room. The plumbers hadn’t glued the PVC pipes together for the washing machine, and they had been leaking steadily. The cost to move the tenants out for two weeks and completely redo the entire bathroom? $13,000 plus the two weeks free rent I gave the tenants for the inconvenience.

That was just the beginning.

How not to invest in real estate – anticipate old stuff breaks down

The upstairs was probably jealous because the downstairs was getting all the attention. The upstairs bathroom pipes leaked, causing a flood in the main floor bathroom. More plumbing fixes and a new ceiling for the main floor bathroom. Cost? $2500.

Another year later, tenants noticed water leaking in the downstairs bedroom. It turned out to be a crack in the foundation. Luckily that one was easily repaired with sealant and only cost a couple thousand dollars.

I thought I was home free.

The following spring  – another leak in the other downstairs bedroom. It was a much bigger problem and involved ripping up the backyard and resodding. Another 10K.

The roof

At the house’s 30-year mark, my duplex neighbor and I made a date to replace the roof because roofs need replacing after three decades and we wanted ours to match. 10K.

Acts of God

One year the spring thaw happened so quickly the water station couldn’t accommodate the flow, and our entire area flooded, including my ill-fated basement suite. It didn’t cost me anything because insurance paid for it, but my insurance company dropped me as a client after the renovations were completed. Even though it was an act of God, I was told if I filed another claim within 10 years, I won’t be able to get insurance from anyone.

A couple years later, we had the famous Fort McMurray fire where the entire city was evacuated. I’ll admit I was praying my house would burn down. Unfortunately, it didn’t. God continues to punish me.

Hot water tank

I learned hot water tanks don’t last forever either, and at age 14, my hot water tank was living on borrowed time. I didn’t want another flood; I’d already had two. $2000 to replace the tank.


After 10 years and multiple tenants, the interior looked shabby. The cost to repaint? $8000.

Sewage backup

Beware of older real estate properties in treed areas. The roots grow into the pipes and cause sewage backup. In some cases, the roots can crack the pipes. That didn’t happen with this property (oddly enough!) but it did with another older property I own.

How not to invest in real estate – lessons learned

I went into real estate investing with a buy-and-hold investor mentality.  However, my ill-fated property has been less buy-and-hold and more like kidnap and ransom.

Buy-and-hold real estate may work well if you buy a new property and sell it while it’s still new. Or if you buy it outright and have a huge budget/reserve for the ongoing operational and capital repairs, and you can sell it at a profit.

After the oil prices crashed, the property dropped by 10-20k every year for 10 years. It has only now started to slowly climb up in value. Although it has always been rented for a good price, the ongoing renovations have bled out much of the equity. If I were a blues artist, this property would have given me enough material for a lifetime.

How not to invest in real estate – final words

Would I think twice about buying another older real estate investment? Hell no! I just wouldn’t buy one.

My rant for the day.

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2 thoughts on “How not to invest in real estate – don’t do what I did!”

  1. That was a litany of woes, written with such engaging wit. I’m sorry that property was such a headache for you, but I’m glad that you have your sense of humour to help you cope.

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