Rental house #1: Purchased!

by The Darwinian Doctor

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.

Related Posts:

Basic details

  • Location:  Birmingham, Alabama
  • Purchase price:  $92,000
  • Bedrooms:  3
  • Bathrooms: 1
  • Square feet:  1018
  • Rent:  Pending
Pre-renovation

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

Neighborhood statistics

  • 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!

— TDD

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Wealthy Doc
5 years ago

Good for you!
You are smart to start this early in your career.
Real estate has been great to me.
It continues to provide cash flow, rent, appreciation, and tax benefits.
It helped me to reach FI within 17 years.

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Buying an Investment Property
Buying an Investment Property
5 months ago

Your approach of treating your first house purchase as both an investment and a learning experience reflects a prudent mindset for new real estate investors. Acknowledging the potential challenges highlighted by experienced investors and opting for a “turnkey” property with professional management can mitigate some of the risks associated with the first-time property ownership. While the premium paid for a fully renovated property may impact initial costs, the optimism about robust returns suggests a strategic perspective on balancing upfront expenses with long-term gains. It will be interesting to follow your journey and insights as you navigate the rental property market, aiming for stability and positive returns on your investment.

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