Today, I’ll spill some of the details about my first rental house purchase.
Longtime readers will recall that I’ve been excited to incorporate rental real estate into my plan to achieve moFIRE within 15 years. I’ve been scoping out companies for a while and finally decided to pull the trigger on a turnkey company in Alabama.
There’s some juicy content coming soon that will go through the expected returns from this investment. I’m still waiting to see how much rent we are going to get from the property. Once I have that information, I’ll post my projections.
- What is moFIRE (morbidly obese FIRE) and why do I want it?
- My 15 year plan to financial independence, moFIRE style
- Why I’m investing in real estate over stocks – Part 1
- Location: Birmingham, Alabama
- Purchase price: $92,000
- Bedrooms: 3
- Bathrooms: 1
- Square feet: 1018
- Rent: Pending
Renovations completed (pre-purchase)
- New HVAC
- New metal roof
- New interior paint
- New window treatments
- Granite countertops in kitchen
- Refinished original hardwood floors
- New bathroom appliances, tile, and fixtures
- Trulia crime maps: lowest crime frequency
- Elementary schools near home: 17
- Restaurants near home: 17
- Average age of homeowners: 35 years old
Initial thoughts and worries
I’ve been trying to treat my first house purchase as an investment, but also a learning experience. Many real estate investors say that their first rental property was their worst deal. There are horror stories of everything from missed termite infestations to early failure of plumbing and HVAC systems.
I’ve gone a safer route by purchasing a “turnkey” property, which is delivered to me fully renovated and with professional property management already in place. You pay a significant premium for this, but I think the returns should still be robust despite this premium.
I’ve already learned a lot of things that I’ll outline in a later post. For now, my hopes are that in the near future, rental property #1 will be rented and stabilized so it starts paying for itself.
That’s it for now. I’ve got some truly interesting content in the works, including a 25 year projection comparing rental house investing to stock market investing. I’m pretty excited about that post.
Have a great week!
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