I talked last week about the house I inherited and why I’ll most likely let it go back to the bank. However, I do own one rental property that I’m very happy with. I thought I’d give you a little update about that.
I bought the house in 2010 and got renters in it pretty much right away. So far it’s been great. Those same tenants are still in the house and they seem very happy. They pay their rent and take good care of the place, so I’m happy too.
Investment wise it’s been a good deal. We’ve had some positive cash flow but not much. On paper we should come out ahead about $5,000 per year but it sure seems like maintenance costs eat up a lot of that. I’d say after 3 full years we have put about $8,000 in our pockets. (That doesn’t take into account that we pay extra on the mortgage out of pocket to get it paid down quicker.)
The main maintenance costs have been having the house painted and replacing the air conditioner. We replaced the AC in 2013 and it was the only year so far that we have shown an actual loss. It was pretty expensive. I have no problem putting our “profits” back into the house. I plan on having the this house for a very long time so having repairs done properly will only help us over the long run.
My goal was to have the house paid off in 5 -7 years. We are 3.5 years in and have paid off about 25% of the mortgage. A few quick calculations and I figured if we keep doing what we are doing we will have the house paid off in 7 years from now. So I’m not on track to meet my goal. I would have to start paying an additional $700 per month to the mortgage to meet my 7 year goal. I don’t see that happening. I want to fully fund our emergency fund and max out our Roth contributions before we start paying more to the rental.
So that’s where we stand. It’s not terrible. I’m happy with our purchase I just wish we could pay it off faster. I’ll take donations!! :)