Well, it's officially been a year since I closed on my first rental property. By now, you should know the full story (which is still ongoing...), so let's get to the bottom line...how much money have I made? How much have I lost? Was it worth it??
Here's a quick snapshot of the numbers
All in all, I'd say it's been a pretty successful year on paper. If you take my Total Rent Collected ($750 x 9 months) MINUS my Total Expenses (*which includes a trip to Indianapolis to visit my property*), I've got a pretty nice cash flow of $313 per month (EVEN with a 3 month vacancy for renovation).
Here's a general breakdown of my expenses over the past 12 months:
-Bank Fees: $16.43
-Legal and Professional Fees: $21.50
-Property Management: $750
-Vehicle Expenses: $92.35
-Property Taxes: $1,224.16 (paid through May 2018)
-Repairs/Maintenance: $10.77 (made copies of keys + bought garbage bags)
-Other: $152.59 (Trip to Indy...used points for the flight and stayed in the cheapest/crappiest hotel I've ever been in)
It's definitely not all rainbows and butterflies! These numbers on paper look good, but the property is now officially vacant, to my surprise! I'm working through a plan right now to get it back up and running.
Has the last year been a piece of cake? Heck to the NO. At times, it's been the complete opposite of stress-free. There were many moments of being nervous, scared, and uncertain. Long-distance communication started off rough initially with my property management team, and it still continues. Meaning...it might be time to make a switch. SOON. But, it's forced me to be proactive, hold people accountable, and build a new network of individuals locally and in Indianapolis.
I've met so many great people throughout the past year and a number of them have become some of my best friends. A bunch of us are going to a go cart track in a few weeks to hang out, laugh, have a good time...oh yeah, and chat real estate.
A few of the biggest takeaways from my first year in real estate:
BUILD A REAL ESTATE NETWORK. Meet as many people as you can that are in the industry, regardless of their age or experience. Attend Real Estate Investing meetings, or better yet, pick your favorite bar and host your own (I did!). Pick up the phone, send emails, and talk with complete strangers you meet online. My first mentor was a random guy in Dubai who just wanted to Skype (what's up Morgan!). Utilize one of the most valuable online real estate resources: BiggerPockets.
Never stop learning, whether that's through podcasts, blogs, YouTube, books etc...you literally NEED to get in the habit of learning something new each and every day. Never stop growing.
Crunch the numbers. If you're planning to Jump In and use the buy and hold strategy, make sure you're cash-flowing right away. Just because you can get $1,000 per month in rent, doesn't mean you actually GET $1,000 in your pocket. Factor in property taxes, mortgage, insurance, property management, vacancy, maintenance, capital expenses. Do your homework and learn how to analyze property HERE!
Hire an amazing property manager. Your rental property is a business. You are the CEO. But, your property manager runs the day to day. Without great property management, your business will not succeed. Period. Interview multiple property management companies, talk to referrals, ask as many questions as you need answered, after all, you're trusting them with your investment and you money.
Luckily, I have a step-by-step guide on How to Hire Your Next Property Manager HERE.
Welp, it's been one heck of a year, I wouldn't trade it for anything, but I've got to go and acquire property #2...leave a comment below, shoot me an email, let me know how you're doing.
Peace. Happy Investing.