End of Year One-what I've learned and where to go from here!
Hello All,
I just finished up my first year of investing. All in all it went well. My property is a 2 bedroom 2 bathroom condo in the DC suburbs. It took about 6 weeks to get rented, but my property manager did a great job, found great tenants and they have just renewed for another year lease.
This was originally purchased as my primary residence, so my invested capital isn't high. Percentage wise the return is decent (over 10% before tax benefits), but the cash flow isn't great, but it's in a great area with solid appreciation, so I think I'll hold on to it for the long term.
Next year, my goal is to buy my next purpose bought rental property in Q1. This will give me my 2nd year of rental income on my w2, so hopefully whatever bank I use will count my rental income toward my DTI ratio!
So now for the questions!
1. The condo fees are going up next year by 2.5%, should I try and raise the rent at the beginning of year 3 if the tenants choose to stay? I don't want to make them want to leave, but I'd like to keep my margin about the same.
2. Where to invest next? The high price of real estate means I'll almost certainly not be available to buy my next property locally. I'm looking at Richmond, VA and Charlotte, NC metro areas for my next property-anyone have any experience or thoughts on these two cities? Though I can't invest locally, I like the thought of being able to get to a place via car fairly easily.
3. Financing-Here is my thought for future financing: I take a cash loan from my 401k (for a $50 fee), pay cash for a property that I find, preferably with 25-30% equity, get a mortgage, pay myself back, and on to the next one. Do you think a bank would go for that? It seems better than saving and saving for a 20-25% down payment.
4. Mobile Homes- Here in northern VA there are 2-3 mobile home parks, with the price for the units at 50-60K and renting for 1100-1200. Obviously there are pitfalls to every investment, but how does this sound? What sort of expenses go along with this type of property?
Thanks in advance, looking forward to year 2!