First Rental: Backstory
(Two weeks ago) I’m sitting on the floor of our old house. I’m surrounded by four trash bags, a blender, and a pizza pan.
If I stood up, I’d be surrounded by a lot of kitchen stuff piled on the counters, but I just ate a bunch of Mexican food so I won’t be standing up for a few more minutes. I stare at the tile floors beneath me and remember the day our parents helped us lay this floor five years ago. I also never thought this house would become our first rental house. I never thought we would have a rental house at all.
(Today) I’ve heard a lot of scary things about being a landlord. 1. Renters will tear up your house. 2. Renters won’t pay their rent. 3. Renters will become zombies and try to eat the neighbors.
Basically, anyone I’ve ever talked to about rental properties has told me, “it’s a terrible idea.” Even though most of these people have never owned a rental property, I appreciate what they mean–“it’s risky!” And, I AGREE! I’m terrified. I’m terrified of failing. Also, I’m terrified of snakes, spiders, plane crashes, and I really dislike Jello. But, I still get on planes, and I still go to the grocery store. Why? It’s good for me to travel, it’s good for me to buy groceries, and I think it will be good for us to have a second source of income.
First Rental: Practical Info
We are managing this rental ourselves with the help of a lawyer and this book from Bigger Pockets. If you want to know anything about how to set up a rental property, I HIGHLY recommend this book. It walks you step by step through the rental process. Here’s what we did (there’s way more detail in the book if you’re interested):
- I read the rental property book and did exactly what it said.
- I advertised the house. I didn’t have to do much advertising because we got 20 calls after we put a sign in the yard.
- We took applications, ran background checks, and chose a renter.
$700 a month
Expenses. Luckily, we don’t have a mortgage on our first rental because we paid it off a couple years ago. Unfortunately, we still have to pay for a few things.
- Insurance: $600 a year
- Taxes: $600 a year
- Lawyer fees: $350 so far…
- Repairs: ???
- Vacancies: ???
So far, this rental has been smooth sailing. Our tenant moved in on the 1st, and we haven’t heard a peep.
Second Rental: Backstory