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Sunday, May 26, 2013

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 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!