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Rental Property

Rental Property Ups and Downs

four plex rental

  This is year three of rental property ownership for the Eyes on the Dollar family, and wow, what a year it’s been. We went from having one easy commercial building and one single family home to multi-property ownership after buying a very outdated fourplex at the end of last year. Here’s a recap of our rental property ups and downs for the year. FourPlex Mania The earlier part of the year was extremely frustrating and expensive from the landlord perspective. You can read about our renovation experience, but to summarize, we took a property with three apartments (two decent and one crappy) and made it into four nice apartments. We also turned over four tenants during the process. I would be lying if I said I didn’t worry about spending thousands of dollars at a time when no rental income was coming in. It also would be false to say that I love the city building inspector. He let us know two weeks before our final inspection that we’d have to replace the entire water line to the property at a cost of about $4,000 to get our certificate of occupancy. He is off the Christmas card list! Finally ...

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The FourPlex Is Rented!

four plex rental

For the first time since buying last December, the fourplex is rented! It was lots of work and stress, but what a nice feeling to have that final lease signed. The property has two buildings, each with two apartments. One of the buildings needed a some renovation with new flooring, electrical, paint, and light fixtures upstairs and a complete remodel with new construction downstairs. After two and a half months of work, we now have four, two bedroom apartments. Rental Income We had hoped to get $3050 in rent between all four units, and we’re pretty close at $2975 per month. We have one holdover tenant who was there before we bought the place, and we should be able to raise the rent $100 or so per month once he moves out. Our other rental house is currently leased for $780/month. The total of our rental expenses are around $2000 a month, so that means $1755 in profit. We also have our commercial rental that barely breaks even every month, but it will be paid off in four and a half years and should net another $3000 a month when that happens. Of course, we’re going to have bad months ...

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Don’t Be Afraid Of What You Don’t Understand

understanding rental property loans

I’m going to go out on a limb here and say that everyone is good at something. Maybe it’s a skill picked up over time or with experience. Maybe we learned it in school. Maybe our parents taught us. Brain surgeons are good at neurology. Crackheads are good at finding ways to obtain crack. We all have our strengths and often don’t stray outside of the comfort zone. Today, I’ll tell you a story of how our comfort zone almost cost us thousands of dollars, all because we were afraid of what we didn’t understand. Fourplex Drama I won’t say we are skilled real estate investors, but with two properties under our belts, we felt OK with branching into a multi-family property. Everything was going almost too smoothly with the process. Things I thought might be a problem were non-issues including repairs we wanted the seller to make,  our credit card churning history and my change in employment status. What did become a huge issue was something far beyond our control. There were no comps for the type of property we were trying to buy. What Does No Comps Mean? In order to get a mortgage, you have to have ...

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Buying a FourPlex

buying a fourplex as an investment property

It’s no secret that I like real estate. I think owning investment property is a great way to build wealth and create semi-passive income. You get to enjoy growing equity and increasing property value over time, all while someone else pays the mortgage. What’s not to like? Well, plenty. We made a bad decision in trying to flip a house a couple of years ago, and had a huge repair bill on one of our rentals this year, which negated any profits.  Still, we are in this for the long haul, and like something out of a HGTV episode, we recently found a deal and bought a fourplex! Here is the story. Not A Good Realtor To Be Found As you might remember, Jim and I have looked at a few potential rentals over the past year, or rather, I look and he says, “OK” as he does not share my love of the hunt. Anyway, after the bad flip deal, I was a bit sour on our realtor and decided to find someone new. The problem was that they all sucked. I thought I had a good one who actually showed me a  few properties at the end of ...

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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 ...

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