Home > Rental Property

Rental Property

Owning Rental Property: Year Two

Two years of being a landlord

It’s been almost two years since we became landlords. We are not professional real estate investors in any sense of the word, just people, like many of you, who are looking at investments that will build wealth and allow us to be financially independent. Here’s how we did in year two of owning rental property. Residential Property The residential property is humming along nicely. We did turn over a tenant, but the property management company had one waiting to move in, so there was no loss of rental income. There are some things that will need to be done on this property eventually. Some of the windows should be replaced, the furnace is old, and the dishwasher and washer/dryer set are probably from the late 80’s. We are prepared for any of these expenses whenever happen, but so far, so good. I’d say we are on deferred maintenace at this point. Aside from a few minor repairs, we haven’t spent much except for property management, mortgage, and taxes. This rental has netted $4081 for the year. Not enough to retire on, but not bad for such a little house. Commercial Property I’m almost hesitant to write about this building because what ...

Read More »

Costs of Owning Rental Property

Cost of real estate in Southwest Colorado

Most people seeking early retirement or financial independence have toyed with the idea of owning rental property. I’m a firm believer that rental income can be a great source of income, especially if you buy a property that cash flows from the beginning. One of our goals is to have rental income that can cover our basic expenses within a decade so that we can choose to retire if we want. So far, Jim and I own one residential property and one commercial one. We have a different strategy with each, and I’ll share some of the costs of owning a rental property. Think About More Than the Mortgage, Taxes, and Insurance Most people think that if rent covers the mortgage, taxes, and insurance, you’re in the clear. I think this is a good place to start, but also know that you will have vacancies plus rental maintenance and repair costs along the way. So far, our residential rental has done really well this year, averaging $319 in positive cash flow per month after all expenses. Considering that we bought this property for under $70,000, this makes me very happy. We just had our first set of tenants move out, ...

Read More »

The First Year of Owning a Rental Property

It’s been one year since our first residential rental property opened for business. I say that because it’s very important to treat investment property like a business.  After being landlords for a year, I though I would share my thoughts on the whole process of rental property ownership.  Property Management We chose to use a property management company, and up to this point, they have done a wonderful job. The particular company we use has an agreement in each lease to go in every quarter for seasonal updates to the property. While, this is true, it’s actually a great way to make sure the tenants aren’t running a meth lab in our house. We also get a report after each inspection with repairs that need to be done right away or in the future. Our tenants were late with the rent only one time. They paid about a week late, along with the $50 late fee.  I’m honestly very glad I haven’t had to go chasing anyone for late rent because I’d probably be a sucker for a sob story. For now, we will keep property management so that we don’t have to worry about things like this.  Unexpected Costs ...

Read More »

Should We Buy Another Rental Property?

One of the gems I have my eye on. Courtesy of Remax.com

About this time last year, we purchased our first residential rental property. We hit a few snags with getting it renovated and rented, but for the most part, I would call the effort a huge success. We had hoped to add another rental property this year, but with our other investment project bogged down, we decided to wait until next year after the everlasting house flip finally sells. Things never seem to happen on my timeline, though, as a house I have been watching for months recently had a large drop in the sale price. I really don’t know what to do, so I’m asking my readers if we should buy another rental property. Let me be honest, I am getting a bit ahead of myself. I don’t have financing secured. I have been churning credit cards, which is not a smart thing to do if you are applying for a mortgage. We originally though that we’d use money from the flip and our HELOC to purchase the next property, but that is not available right now.  We do have amazing credit scores, no debt except for mortgages, and a good cash reserve. If we can get a loan, here ...

Read More »

Hidden Benefits of Foreclosure Hunting

While I’m enjoying my vacation, I have a wonderful guest post for you today. If you would like to guest post here, please read the guidelines, and contact me.   Have you been living under a rock the past few years? No? Well then you must have heard that there was a bit of a real estate crash in the US. The area where we live in Florida was hit particularly hard. But we (the PoPs) were lucky. We weren’t leveraged, had jobs, and were young enough to afford some risk – so we went foreclosure hunting. While we eventually bought a $50K duplex, the road we took to get there was not straight by any means. There were many metaphoric missed turns and surprise roundabouts that we got stuck in along the way. But, boy was it interesting.  Interesting? What Do We Mean Interesting? In fact, of the more “interesting” stories we encountered along our journey went along with one of the first foreclosures that we started to get serious about. It was a single family home in an area that was predominantly rented by recently immigrated families. Built in the mid-1990’s, out of concrete block, with a two-car ...

Read More »