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. I’ve already looked into a tenant credit check for a couple of applicants.
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. If you can afford to live in a condo, then good on you. There are just the fair few who like to abuse the system. No matter where you are in the world, there are companies similar to Piermont Grand who offer amazing condos. You just need to do your research if you are looking for a new place to live, and of course be financially stable too, as this does make a lot of difference.
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.