Mike Geenen has owned rental properties for 27 years and made a nice income, but recently he's been pummeled financially. Although he owns five rental properties without mortgages, he says he is barely making a profit.
"I had to use credit cards to pay my property tax," said the angry 55-year-old Sarasota resident. Geenen is one of a number of landlords feeling the pain of skyrocketing insurance and taxes. They say they also are facing declining rents and numerous vacancies. Members of two local landlord associations say they all know colleagues who have filed for bankruptcy or are losing properties to foreclosure.
Geenen said he is lucky he was able to sell a house last year and use the $300,000 proceeds to bail himself out of debt. A good illustration of his dilemma is the two-bedroom, two-bath rental house he owns near Sarasota Memorial Hospital. In 2002, property taxes on the house were $2,200; four years later they had jumped to $6,702 — an increase of 204 percent. Insurance on the house went from $200 a year to $736, an increase of 268 percent.
He had to lower the rent from $825 to $750 just to keep a tenant. "It came up vacant for three months so I ended up renting it for $750 a month. Once I dropped it to $750, I was able to fill it in a couple of days," Geenen said.
After paying taxes and insurance, he's making a little over $2,472 a year on the house but that doesn't include maintenance costs, or occasional vacancies when he can't collect rent, which can easily eat up his profit. "You should be making $8,000-9,000 a year on a house like that," said Geenen.
And although this year taxes on the house dropped $900, to $5,800, it didn't help much, he said. "These are so high, they need to be cut in half to help me," said Geenen. "I'm just so frustrated. It's so amazing to me that the government can put you out of business."
About 35 percent or 40 percent of residential properties in the two-county area don't have a homestead exemption and many of the owners are in distress, said Alvin Holmes, 67, of Sarasota, president of landlord associations in both Manatee and Sarasota, and operator of the Internet Web site www.landlordsonline. com.
About 5,000 landlords are on the association's mailing list, said Gerri Holmes, Alvin's wife and business partner and secretary of the two landlords' associations. Most are small businesspeople, owning an average of 10 properties, she said.
Losing money
The Holmes' manage two duplexes that are losing money — a two-bedroom, two-bath duplex in the 5900 block of First Street East in Bradenton and a two-bedroom, one-bath duplex in the 1400 block of 17th Street in Sarasota.
In the past six years, taxes on the Bradenton property rose from $1,088 to $2,319, an increase of 113 percent. In the past five years, taxes on the Sarasota property went from $1,435 to $2,786, a 94 percent increase.
Insurance on the Bradenton property went up from $490 to $1,445, an increase of 194 percent. Insurance on the Sarasota property went from $995 to $3085, an increase of 210 percent. The mortgage on the Bradenton house costs $1,356 per month and on the Sarasota property, $1,630 per month.
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