This week at one of our rental properties, we had a massive ant infestation. Carpenter ants are a force to be reckoned with, they gave us all a run for our money as we desperately tried to find the nest to get rid of them for good.
A week ago, the upper tenant of this particular duplex called us and told us she was ‘fleeing’ the property and getting a hotel room because it was just unliveable for her and her children.
We totally get it – my wife would have been freaking out too if there were ants swarming all over the floor. So we told her that we would compensate her for a hotel room for the nights that she wasn’t able to reside in the property while we worked on figuring out a solution.
The thing that boggles my mind is what happened next. Of course we spent a great deal of effort (and money) solving the issue the right way, as any good landlord and property owner would – but we also did the right thing which was to compensate her without question. The total bill for her hotel stay was approximately $400 and we asked her to send along the invoice so we could settle it.
We got 5 calls/emails asking for the $400. The tenant went on to plead that she had no money to buy basic necessities, food even for her family and that her bank balance had dropped to an extremely low amount.
Now these are tenants with jobs – nice cars. I couldn’t believe my ears – not having $400 temporarily to pay for her hotel bill.
I see this pattern with many of my tenants. One of our recent duplex’s has tenants who drive a hummer H2! They are long term tenants – they have always historically rented but they constantly complain about the financial implications of small issues (which leads me to believe they don’t have much disposable income!)
And it hit me – so many people out there (I don’t mean to pick on my tenants – it is just that I know the ins and outs of their finances often times) – are literally broke – living paycheck to paycheck. They have no investments and little savings.
Why is this – is the question? I think part of the problem is a lack of financial education. In fact this is a huge problem.
I read an article in the Globe and Mail talking about proposed changes to the Ontario Curriculum starting the fall of 2018, which will incorporate some financial literacy/education into the curriculum.
In the article, they quote a recent graduate who says “The math questions in the curriculum were all about how fast planes were going – “problems you had to solve. There was nothing about mortgages. Or buying a car,” she says. “They’re not explaining how [someone] buys a house.”
Interesting feedback right!
In the article, Kate Johnson, the chaplain of Queen’s University in Kingston, states: “She had watched the parade of expensive Hunter rubber boots and $800 Canada Goose jackets, “plus the lineup at Starbucks,” and wondered how students were managing their expenses.”
This is exactly it. When I look back as to how my wife and I started out, we both came into a marriage with little to no university debt. My wife worked throughout her university years, paid off her tuition while living at home. We both came from immigrant families who taught us the importance of frugality and paying off our debt as soon as possible. This ‘clean slate’ so to speak gave us the ability to start our lives out focusing on creating a sound financial future for ourselves.
While we are now highly leveraged (good debt of course) – we have spent the last 10 years learning a great deal about how money works and how to create a life whereby it isn’t a source of stress for us.
It isn’t just about making money, like I talked about in my last blog post – it is about focusing on what you keep. It is about spending within your means, saving and investing your money so that it continues to work for you.
I hope to educate my children myself on money, and I hope that through example they will learn – and not just so they can take over the family business 🙂
So until next time, happy Canadian Real Estate Investing.
Jose Jafferji, REIA
Your Real Estate Investment Advisor, Coach & Realtor