I wanted to update everyone on this second rental property. It took a couple of months but it was finally rented.
Below are the original estimates. I’ve included in red the actual numbers.
3 bed/2 bath brick home – approx 1800 sq. ft
Purchase Price – $103,745
Down Payment – $25,936.25 (25%)
Closing Costs – $2,984.75 (just under 3%)
Repairs – $1255
Total Cash Costs – $30,303.60
Financed – $77,808.75 @ 4.125%
Monthly Taxes – 162.75 ($123.74)
P&I monthly – 377.10
Property Ins/month – $62.17 ($47.33)
Total Expenses w/o maintenance – $602.02 ($548.16)
Maintenance/Vancancy (20%) – $220.00 ($200)
Total monthly expected expenses – $822.02 ($748.16)
Expected Rent – $1100 ($1000, ACTUAL RENT)
Profit before m/v – $497.98/mo ($451.84)
Profit after m/v – $277.98 ($251.84)
Cash on Cash Return (before m/v) – 19.8% (17.89%)
Cash on Cash Return (with m/v) – 11.05% (9.97%)
It was on the market for two months. I originally had it listed for $1200 for a month and then I dropped to $1100. I worked out a deal with my new tenant for $1000/month for a 6 month lease. I would rather collect less rent and have better tenants.
I’ll update my Real Estate page with the new information. I’m currently earning $637.93/mo after all expenses from two rental properties.
The picture is a mask I bought in Zacatecas, MX last year.
Why only a six month leas3?
The tenant wanted to make sure they could find a suitable job to pay rent. I agreed since It was taking a while to lease. I’m hoping we can do a year renewal next.
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Congratulations! The ROI is awesome. The purchase price is not high. Which state are you in?
I’m in Texas, northeast part right now. That ROI isn’t uncommon here but there’s very low appreciation.
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Very cool – nice that you are making $600+ a month of relatively hassle free income!
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Thanks Derek. I’m in love with that passive income.
Cheers!
As time passes and rents increase that 600 will grow. Congrats on achieving a big goal and they say property 3 and 4 will appear even faster. Good luck
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Hi El,
That’s the beauty of rentals. You can lock in a 30-year fixed rate that will stay the same and rents continue to go up.
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