Escape from the Cube: Financial Independence - Being a Rental Lord

It's middle of month 4 of the Landlord Challenge, and so far so good.

PROs:

1.  I've  cleared about $300 or around $100 a month!   Doesn't sound like much except that $300 is on top of the renters paying for all of my maintenance costs savings ($200 per month), all of the manager's fees, property taxes, all of my mortgage interest, the mortgage itself and building my equity - about $150 per month.

2.  I'm only making $28 a month on a savings account of $28,000.   I've got $50,000 in equity in this town home, so I'm thinking making  $100-$250 a month is good return.

3.  My utilities at my new place are only $50 a month for electricity and $21 for water/sewer/trash.  I'm living in a luxury condo in the middle of the city, within walking distance of coffee shops and grocery stores, for about the same cost as living in my suburban town home with the long work commute.

CONs
1.  Rent is coming in as expected, although it is a little later than I would have hoped. The management company's bookkeeper quit and they are in process of training the new one.  By the time the management company processes the checks, it is around the 15th - not the 1st - and I'm usually so nervous about it, I go pick up the check myself.   I am looking forward to the day when that check just shows up in my mail box, as I expected.

2.  The air conditioner went out on the Friday before Labor Day.  The temperature in my part of the country averages around 98-100 degrees on that weekend!   The maintenance guy I had lined up for such an emergency was a complete waste - thank goodness for the management company.  They took over and had it fixed before 5 p.m. that day.

3.  Renters, being college kids, forgot that they had to pay for water as well as electricity.  Their water was shut off and a panicked phone call to the manager occurred on a Friday afternoon.   All was straightened out and again, I'm in debt to my rental manager.

Like I said, so far, so good.  Next month could be a completely different story!    But for those hoping to take this risk as well -- the moral so far is "hire a good manager, and stay on top of the rental checks..." 

Escape from the Cube - Financial Independence: Rental Income Big Gamble Part 2 - Decluttering

Prepping to Rent and Move:

The last week has been all about decluttering and staging.  I'm decluttering because I'm going from 1200 square feet to 697 square feet.  I'm staging because I'm putting the townhouse on the market July 1st.   The property manager has been hired (cost 1/2 first month's rent, 8% thereafter per month).

Decluttering has been emotional -- but freeing!  My declutter Go-tos for inspiration have included the book "Get Organized:  the Clear and Simple Way" by Marla Dee, FlyLady.net, and any resource for ADHD organization such as the National Association of Professional Organizers.    

washroom after removing mini-trampoline

Dee approaches organization from an emotional purging/mental envisioning and mapping perspective.  She suggests taking photos of the space.  It worked better for me than most other approaches such as, "do you love it? use it?  No?  - then toss it."     For example, throwing out the old mini-trampoline that didn't work so well anymore was easier to do when I took a photo of the room where it was stored,  after the trampoline was moved.   I wanted that cleared out space for myself.  The tossing process became a gift to myself:  of a beautiful, daily used space instead of the loss of an object that wasn't used that much anymore anyway. 

Since I had to take photos anyway for the online lease posting, this helped get me going on the photo taking recommended by Dee.   Another example of how this works --  I didn't realize how the golf clubs got in the way of the pic until I viewed it through the camera lens and saw them in the photo of the washroom.   (PS - I'm keeping the clubs, just giving them to a friend to store.)

woodburning fireplace

By the way, it took abut two hours to stage and take about 10 photos of the townhouse. Here's one of the woodburning fireplace.  (notice the coffee table was moved, and you can see the built in bookshelves.  Oops, that reminds me -- I need to declutter the cabinets underneath!)

Do you have too much clutter getting in the way of your space?  What resources do you use to inspire the big clean out?


Other posts you might like:

How I sold my pool table on craig's list
Escape from the Cube: Part 1

Escape From the Cube: Financial Independence Next Steps - Rental Income Big Gamble

You may have followed my last downsizing saga to improve my financial situation.  I moved from my 2500 square foot beautiful family home in lovely university area with 100 year old oak trees....to an apartment.   Traumatic?  Seemed so at the time.   As someone, maybe like you?  Who is  more left-brained than right-brained, my environment is very important to my creativity -- and hence my sense of well-being and safety.

The move was scary.  Here is a from back then with helpful moving tips if you are moving soon.  But I pocketed $50,000, helped pay off $5,000 of my daughter's school loans at Ivy League University, and had a 1 and 1/2 year vacation in a luxury rental condo.  Instead of desperately searching for handymen while trying to finish reports at work?  I went to picking up the phone to say  "Hello, maintenance?  Could you change my air conditioner filter today?  Great, thanks!"  I'm now a BIG fan of renting.

From that apartment, thought, I bought a town home.  To Rent or Buy was the question..and one of my most popular blog posts.  The initial ask was driven by my $50,000 nest egg going from a 4% return each year to a 1% each year.  Then there were those incredibly low interest rates on property.  Pushing me forward was that monthly rental "vacation" that cost $1,100 per month.  So I bought again in 2010.  And got a $6,000 first time home owner's credit.  Which I put into the new townhouse.


Now, 3 years later -- I'm ready to turn my townhouse into a rental income property -- gaining about $200 per month in passive income while paying off my equity --  and go back to renting (at only $975 per month).  Crossed fingers!

But to rent my place, I need to go through the transition again of moving and resettling.  I'm using the skills I developed during the previous moves in the last 5 years.  And would love to hear your tips and tricks to making moving easier.

I'm into the new space on July 13th, 2013, and will need to rent my town home out to someone else, with the right amount of rent, by August 1st.    It's a gamble.

I'll be posting every week -- let the Gambling Begin! 

Google Adwords - Advertising Dream for Your Small Business

If you are dreaming of escaping the cubicle and building your own small business, you'll need a website or a blog.  You may already have one.  And the best, easiest, cheapest way to get your business advertised is via Google Adwords.

Yes, even liberal arts graduates can use Google Adwords!

 www.Google.com/adwords

www.Google.com/awexpress

If you have a chance to go to the GYBO Google Seminars coming to your area, grab the opportunity.  The Small Business Development Administration is partnering with Google to offer free small business seminars across the country.   Every state has a department of SBDA...so check out your areas!

I'm attending a seminar today and will post more tips as the day goes on --

Tax Info 2013 Made SoMe Easy from IRS

Love the new IRS Tumblr blog! 

Maybe it's because the IRS headquarters is in Austin, TX, home of the the SXSW digital media and music festival and thousands of young tech savvy workers?  All I know is that the IRS is now using social media to deliver easy-to-digest filing information beyond just www.irs.gov, and it worked for me -- so I know you will probably find it to be simple and useful as well. 

For example, I found out that I can e-file taxes for free, even if I make more than $57,000 -- just by watching a minute and a half video!

And a graphic on the Tumblr blog links you directly to a site that gives you an online application to order historical tax information necessary for your federal student aid application (FAFSA).   It only took 3 minutes for me to   read, digest, follow and order.  Wish I'd had access to that when I was filling out my daughter's FAFSA forms (i.e., spending a Saturday in paperwork misery justified by motherly love).

Lost your W-2?  Or didn't get one?  There's a quick video on the blog on that as well.

Definitely good news from the government - glad to see my tax dollars at work in Social Media!