This evening, I need to check on a slowly draining bathroom sink. On Tuesday, Mr. PFL and I took a look at a toilet that overzealously filled up the tank when flushed. I still believe that at least 95% of the time being a property owner is easy, but the other 5% can be really unpleasant.
With this in mind, Residential Rental Income is the key to our ability to begin planning a paycheck-free lifestyle. I will explore each of our properties in more detail in the future, but below is a brief overview of our current portfolio.
1) The Condo (Townhouse-style): Mr. PFL purchased the Condo in early 2002 for $239,900. The county auditor’s newest proposed value is $308,000. The Condo is 1,918 square feet, with 3-beds, 3-baths and a 2-car attached garage. It was built in 1998. The Condo is located in a very desirable neighborhood close to downtown and the main entertainment district. Mr. PFL lived there with his cat until mid-2007 when I moved in with my cat. We lived there until October 2011. Since November 1, 2011, we have had 100% occupancy at $2,100/month. The last of the original tenants is moving out soon, and we have signed a new 1-year lease commencing November 1, 2014 for $2,250/month.
2) Our House: Mr. PFL and I moved to our current house in October 2011.We purchased it for $430,000. It is a 3,303 square foot single-family home with 3-beds, 2-baths and a detached 2-car garage. Our house is a brick Victorian built in 1898. The interior was gutted and redone after a fire about 8 or 9 years ago. The county auditor’s newest proposed value is $468,000. Our house is across the alley and two houses north of the Condo (we literally moved across the street).
3) The Duplex: Mr. PFL and I have an LLC for rental property purposes. We purchased our first property through the LLC in the summer of 2010. After I looked at several potential properties, Mr. PFL trusted me to buy the Duplex for $13,900. The Duplex was bank-owned at the time of purchase. I researched the neighborhood thoroughly and felt confident that this was an up and coming area. I was wrong. This summer, I signed a land contract with the current tenants. They are buying the property from us over five years for a total purchase price of $29,675. The county auditor’s newest proposed value for this property is $41,700 - but, the county has also torn down two houses across the street and one next door to this property in the last two years.
4) The Black Diamond: The LLC acquired the 6-unit Black Diamond Building (BD) almost exactly one year ago. It has 2 one-bedroom units and 4 two-bedroom units. All units have one bath. This building was purchased for $49,000. The county auditor’s newest proposed value for this property is $126,000. All six units are rented as of a month ago. Rents range from $480 for the one remaining Section 8 tenant in the un-renovated unit, to $550 for the one-bedroom units, up to $675 for the 2-bedroom units.
In summary, we have seven units paying monthly rent plus the monthly payment from the Duplex’s land contract. Before any expenses, our gross monthly income from residential real estate is $6,283.19.