I don’t have a lot of updates with real estate, usually just a few per year since the leases usually run 12 months. I’m still learning quite a lot and have a lot more to learn. I wanted to give an update on Unit 2, the condo unit.
My tenants had to move out early due to the wife getting a job in another city but the original lease runs until the end of July. Last weekend I did a walk-through before I put the unit back on the market. The good news is that the previous teants left the place in great shape, I don’t even need to hire someone to clean. It is a good idea to check if anything needs replacing or repairing, such as the fan coil unit just to make sure everything is up to date and ready to go. I also have checks to cover through the end of July should the unit not lease sooner. If I get the unit leased before the end of July then the tenants would get a pro-rated portion of their rent back. Either way, I have over a month to get the unit rented without risking one day of vacancy. This is great. I’ve also listed the unit with a rent increase to $1000/month from $900/month currently.
The market in Austin in booming and it’s hard to find a one bedroom at a decent price near downtown. Although the HOA dues are high , $164/month, the unit gets a lot more traffic than the house I have just outside of town. I already had someone look at the unit yesterday. Last year the Condo was barely on the market 1 day before being rented. This is another reason to raise the rent.
The bad news is that even if I get $1000/month I still won’t have positive cash flow yet. I will be really close though. However, with the payments to principal I am still increasing my net worth each month. One of my goals next year will be to pay this unit off. I’m currently coming up with a plan to pay the rental off using an amortization spreadsheet. I’m sure I’ll be making a post once I get my plan together. Once paid off I’ll have over $500/month income after taxes, insurance and HOA dues. I still hope to have half my income come from rental properties and half come from dividend growth stocks.