We rented rental property number 7 last week. We advertised it for $1,400 a month and had three applications in the first day after it was on Craigslist. We choose a family who had the best references and rental history. They had rented their previous house for 5 years, but the owners were selling it so they had to move. They aren’t moving in until July 20th, but that is better than moving in August 1st, which is what I was afraid of considering we did not advertise the house until July 2nd.
Rental property number 7 is going to end up being a great investment! I purchased it for $113,000 with the seller paying $2,000 in closing costs and it needed less work than most of my other rentals. We paid our contractors about $4,600 for paint, exterior repairs, some interior repairs and sprinkler system repair. We paid about $3,500 for carpet up and down and we did not need to install new vinyl. We were planning on selling the wheel chair ramp that came with the house, but we decided to donate it to a family who was recently in an accident and the father ended up in a wheel chair.
Purchase price $113,000
repairs $9,000(we had a few other small items)
Closing costs $2,000(after $2,000 concession)
Total cost $122,190
Cash into the home
Down payment $22,600
Closing costs $2,000
Cash on cash return
We rented the home for $1,400 a month, which equates to $16,800 for the entire year. Mortgage payments, which include taxes and insurance are about $550 a month, which equates to $6,600 a year. For the first year my rental income will be about $10,200 and that equates to a 32% cash on cash return! I’ll take that any day!
I am chilling out for the next month or two at least. I am buying a new personal house, which closes in two weeks. I am then selling my current house to my friend, who is moving to town to start working with me. He just put his house up for sale and received a cash offer in less than a day. Once these sales are taken care of, I am going to start looking for rentals more seriously. However, my biggest issue may be finding a great deal. I am spoiled after this one and I have not seen anything remotely close to renal number 7 on MLS in the last 6 months.