How and Why we bought our first Rental Property- Long Version

5 Replies

You could say that Real Estate is in both my husband and my DNA yet in two different ways;

Growing up my parents not only built their own home (including falling the trees and milling the lumber themselves) but also flipped a single family home and remodeled a ski resort condo turning it into a vacation rental. Oh while owning and operating a Window and Door company! My husband’s parents once retired sold their family home on the lake and used their massive profit to purchase a condo, a single family home, and a bare double lot all as rental properties or potential rental properties while they traveled the country with their Airstream and faithful pup.

A little background about my husband and me, we have been married for 4 years and together for 10. We met back in high school in our small yet tourist popular town in Northern Idaho but shortly after marrying in 2014 we officially moved to the oil boom town in North Dakota were my husband had been working for the past couple years. We purchased a lot in the suburbs and had a builder build us a home where we have been since 2015, just the two of us and the cat. We don’t plan to stay in North Dakota forever as Idaho will always have our heart and we own property there that we envision raising a family on. My husband’s father is a contractor so he passed those skills on to my husband so he has worked in construction with his dad off and on since high school including being in a high school class that worked all year to build a home and then auction it off to fund the next years building project. He also competed at the Skills USA competition for construction and did pretty well (If you can’t tell I am so proud and impressed by my husband). Though he really has no passion for building homes he does enjoy talking and looking at homes and does enjoy (or maybe he doesn’t but I make him) building furniture pieces for our home. We are always working on some kind of project, we are both busy people and our friends always make comments about how all we do every weekend is work on projects or leave town to go on vacations or camping. We both grew up in families that believed weekends were for projects, I remember spending every weekend at the flip my parents bought or the condo removing wallpaper or holding up drying wall while my dad attached it. I mean what did “normal” families do on the weekends?

Sometime fall 2015 we were talking about the future- like we always seem to do- I am what one would call a planner. We were talking about how we would be able to afford a life in Idaho on one income let alone a much smaller income then what my husband makes now working in the oil field. I currently work in lending but plan to leave the workforce once our first child is born and not sure when or if I will go back to working even when they get older. We kept saying we needed an alternate stream of income for our future, and I remember saying something about maybe buying another house for renters since we have the money now. As I recall my husband said not to stress so much as here we are talking about buying another house when we are so young (23 and 24 at the time) and that seemed crazy and getting ahead of ourselves. Fast forward one year to fall 2016 and I can’t remember what finally clicked but there we were talking about buying a rental property for future income. Now we don’t need additional income currently as we make very good money but in the years to come remember our family would be going through some financial changes such as me leaving the workforce, having children and moving back to Idaho where my husband’s income would be cut in more than half. We decided to look for a condo in Las Vegas as that’s what the in laws have and tell us all the time how cheap they bought their condo for. We spent October- December 2016 getting our financing in order, finding a realtor and then a second when the first didn’t work out, finding a property manager and then a second when the first didn’t blend well with us and reviewing listings online. Come January 2017 we flew down to Las Vegas over Martin Luther King Day weekend because I work for a bank I have that day off and didn’t want to waste my limited vacation days and my husband’s schedule is pretty lax when it comes to days off. In that 3 day weekend we toured about 12 condos, placed an offer on one we loved, met with the Property Manager we intended to use and spent the rest of the time at the Roulette table. After returning home we heard back and our offer had been beat out by another offer that the seller accepted. We spent the next 4.5 months watching the listings online as the list prices climbed higher and higher, realizing we had come a little too late to the party in Las Vegas. We even opened our search up to single family homes and increased our budget by $50,000.00 but still nothing got us excited. 

One weekend I was home while my husband was working and I decided to look at home prices in Branson Missouri as I had always heard you can get a lot for your money there. Well I opened up two Zillow webpages and compared the homes for sale on one page to the homes for rent on the other. This helped me roughly figure out how much rent we could expect from certain house specs which made it easy to see if said property would turn a profit after the mortgage was paid. After a couple hours of researching I text my husband and told him we needed to look in Branson. Monday morning he googled "Realtors in Branson Missouri" and called the highest rated one online who turned out to be amazing. Our Realtor set up an online portal with our criteria so we could look at listings as they came on the market, this was perfect. We also asked our Realtor for recommendations for Property Managers in the area and he gave us a list. My husband made a few calls and we settled on the friendliest one we talked to, we reviewed their website to determine what listings they currently had to see what types of properties they took on. We reviewed all the contracts and documents they provided; they were standard and we asked any questions we had. The Property Manager told us if we were stuck between a few houses that she would review them and let us know her opinions on the properties and what she felt she could get for rents, this was fantastic and really helped a lot. Within 2 weeks we had 3 properties we loved and PM confirmed rent would provide some cash flow for us. We really didn't have the time available to fly down there and look at properties in person, we had a vacation scheduled so both our workloads were heavy and I had limited vacation days accrued so we ask the Realtor to do a video walk through of the homes and send to us. While relaxing on the couch one evening we reviewed the videos, talked over each property and decided which home to make an offer on. Next day our Realtor placed the offer for us, the seller countered and we accepted knowing the value was there. A couple weeks later we went on our vacation to the Bahamas and when returning we closed on our first rental property in Branson Missouri a 5 bed 3 bath 3,021SF SFR. We had reached my goal of owning 3 properties (not homes) before I turned 25, we owned the land in Idaho, the personal home in North Dakota and our first rental property in Missouri, but after reading most of your stories isn't as impressive as I thought it was!

We had some work that needed to be done on the property like a French drain to help with drainage issue and some optional work like new paint and some nicer doors that we felt we wanted to do as a family would probably be renting here and deserved a nice place to live. After the closing our Realtor dropped the keys at the Property Managers office for us and went and placed a lock box on the door because he knew we would have sub-contractors in and out and thought it would be easier (Again he is amazing). We could have had the Property Manager organize all the sub-contractors and work but I chose to organize and schedule it myself, it was our money being spent on the repairs and improvements and I wanted to be involved. Over the next 2 months we got quotes from 3 different contractors and painters for the inside work and 2 landscape companies for the drain, finally starting work mid-August. Honestly it wouldn’t have taken that long but again I was organizing it and well it was camping season so we were in and out of town a lot. I remember looking over paint color sample cards around the campfire with my husband one evening! The inside work took a month due to the contractor who also did the painting we hired squeezed us in on the weekends so I took 4 weekends to complete. Then we had to wait about 3 weeks for the landscaper to come do the French drain, bringing all the work done by about mid-October. We had lots of showings to families who were interested but many asked about dogs which we said no to, finally found our renters and they moved in on December 1st, 2017.

We are hooked and plan to purchase another property in the next year with the goal of owning 2 rentals before we have our first child (hopefully next year J), a few more after that in the next 6 years while my husband still works in the oil industry and we have the funds to do so. After that we can move to Idaho and my husband can work a more medium income job while I stay home with our littles and we will have rental income coming in to help offset the income from me not working.  

Thank you for reading our story

I like the story, but it's not complete without telling us the numbers!

@Janelle Groenhout

"we decided to keep all dollar numbers private."

Not exactly consistent with the intent of this forum. There is nothing secret about numbers.

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