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Bought my first Rental Property! Anyone want a cool spreadsheet?

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    Bought my first Rental Property! Anyone want a cool spreadsheet?

    Hey savers!

    I did something crazy that I've been wanting to do for years. I bought my first rental property. I've been extremely chicken in this decision. I didn't want to invest far away since I wouldn't know much about the area and I'd want to keep an eye on it. I didn't want to invest in my local town either because I don't think the market's that great. So it has taken me way too long to get here, but here I am.

    Finally, I found something I love. Due to some family connections, we were invited to purchase a new construction 4plex near where much of our extended family lives in a little college town that has really been growing and will likely only pick up pace now that it's big sister college is getting too full and even more competitive to get in. The 4plex is to be used as married student housing. There is such a need for married student housing there! We got all 4 units signed the week we listed and they were moved in the following week! What's more is there isn't a drop in rent prices or increase in vacancies during the summer like in other college areas due to the college's assigned 3 track system (3 semesters, the college chooses which is your "summer" break). If rent isn't collected, our management company has a deal with the college to withhold grades until we are paid. The two 4plexes on either side of our building are owned by my sister-in-law and father-in-law. My father-in-law lives close and checks in on them from time to time.

    The margins aren't very great. It doesn't meet the rule of 1%, but it's not too far off either (0.85%). I think it would take stacked extenuating circumstances to loose money.


    Anyways, I thought I'd share that big news as well as a spreadsheet I developed to analyse how long it would take to pay the property off.

    Assumptions include:
    profits rollover to paying down the loan (otherwise it's just the simple amortization you get from the bank)
    you pay off the down payment loan first while paying the minimum on the mortgage
    every year is like the current (no increasing fees or rent)

    Here's the link: https://drive.google.com/file/d/15jO...ew?usp=sharing

    I modified the numbers a little for privacy, but it's still pretty close to my loan information.
    -Milly
    Personal Finance Blogger, Mechanical Engineer, and Mother of 3 Toddlers
    milly.savingadvice.com

    #2
    What city is it? Send me a PM. i"m dying to buy something.
    LivingAlmostLarge Blog

    Comment


      #3
      Seems like a good deal all around! .85% is still decently good, and married-student housing that's Incorporated into the college system is probably lower risk than other options. Also nice that family is on either side & can check in on it for you.

      ​​​I'm impressed by your 6% management fee! Normally I only see 10%, maybe as low as 8%. I've never gotten into multiplexes yet, but it seems like a very good way to have steadier income, with multiple units to level things out. Your dynamics at the college are interesting & seem pretty advantageous for you.

      Congrats on the new acquisition! It makes me want to jump into rentals again. I look forward to when I'll be able to focus more of our money toward rentals again (planning for after our home is paid off).
      "Praestantia per minutus" ... "Acta non verba"

      Comment


        #4
        Originally posted by kork13 View Post
        Seems like a good deal all around! .85% is still decently good, and married-student housing that's Incorporated into the college system is probably lower risk than other options. Also nice that family is on either side & can check in on it for you.

        ​​​I'm impressed by your 6% management fee! Normally I only see 10%, maybe as low as 8%. I've never gotten into multiplexes yet, but it seems like a very good way to have steadier income, with multiple units to level things out. Your dynamics at the college are interesting & seem pretty advantageous for you.

        Congrats on the new acquisition! It makes me want to jump into rentals again. I look forward to when I'll be able to focus more of our money toward rentals again (planning for after our home is paid off).
        Management wanted to charge more, but the three of us banded together, making 12 units. Since they already manage the other units on the block, it made sense for them to accept our offer at only 6%.

        It's funny. I was really worried we would finish off our house mortgage before finding the next step. We're set on our investment strategy for the next decade now unless we pick something else up on the way.
        -Milly
        Personal Finance Blogger, Mechanical Engineer, and Mother of 3 Toddlers
        milly.savingadvice.com

        Comment

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