The Tenant Who Stayed Eleven Years

When a gutter came loose, she wrote to tell them, and she sent a photograph.

By Neil Solomon · 4 min read

Picture a couple named Carl, 71, and June, 69. Eleven years ago they left for a life abroad and rented out their house, which is paid off and worth about US$500,000. Their tenant was a school bus driver named Beatriz. She planted tomatoes along the back fence. When a gutter came loose, she wrote to tell them, and she sent a photograph.

Each December a card arrived with a picture of the tomatoes.

In the eleventh year Beatriz gave notice. Her daughter had a baby, and she wanted to live nearby. She left the key on the kitchen counter beside a jar of relish.

Carl and June flew in to see the house. They stood in the empty kitchen.

"Eleven years," June said. "I never worried about this house once."

"That is worth something," Carl said.

"We will never find another one like her."

"We found her," Carl said, and for a while neither of them said anything more.

Carl did the arithmetic that evening. Say the rent was US$3,000 a month. Say every change of tenant leaves the house empty for one month, which is an assumption and depends on the place.

A small yearly rise in rent is also small beside an empty month. A 3% rise on US$3,000 is US$90 a month, which is US$1,080 a year (90 times 12). One empty month costs US$3,000, nearly three years of that rise.

Then he wrote a second table, because the question now was whether to rent again or to sell. Both columns include the cost of the house to them. When a tenant lives in the house, the tenant pays the utilities and the routine upkeep, and Carl and June pay tax, insurance and big repairs, about US$10,500 a year, which is an assumption, plus a manager's fee of 10% of the rent. Their own home abroad costs the same either way, so he left it out.

Renting with a tenant who stays leaves them US$3,100 a year ahead of selling. Renting with a new tenant every year leaves them US$400 ahead. The difference between the two renting columns, US$2,700 a year, is what a tenant like Beatriz is worth, and it is more than the whole gap between renting and selling.

Then Carl thought about something else. In the United States, a married couple who lived in their home two of the last five years may leave out up to US$500,000 of the gain when they sell. Eleven years since they lived there is longer than that window, so the exclusion may no longer apply to them. An accountant could tell them for certain. If it does not, the 18,800 in the third column would be lower by the tax on the gain.

June looked at the tomato vines along the fence. "We could rent again, and we could sell. Can we decide in the spring?"

"We could," said Carl. "I would like to write to Beatriz first."