My husband and I took our first big step in November in purchasing our first real estate investment property. The house we purchased had already been rehabbed and was ready to go. We bought it for 37K and conservatively calculated an 11% ROI (that's before subtracting a mortgage payment). Our rental income is $575/month.
Since purchasing the house, we have put a little over $2,300 into repairs -- things like plumbing issues, new refrigerator, cutting down tree limbs, ect. It seems like every time we turn around, there is an issue with the house.
It has been discouraging. Originally, we thought we could self-manage the property, but due to time constraints, we have considered finding a property management company.
The biggest question we have right now is "should we get out?". So, how do you know when you should get rid of a property? Due to the 15 year note we have on the property, we are currently suffering a loss from the amount of repairs that have made.
We don't want to be too quick to abandon ship, but if it's sinking it's sinking. What are your thoughts?
Briana- It is great that you are able to be candid about your situation. I feel you need to determine if your property is moving you toward or away from your objectives. Will your thoughts on the home change if someone else is managing it? Now that you have made some essential repairs, will the property continue to need things fixed or are you good for a while? How would your property be performing if it was on a 30 year note? Finally, is the amount of money you are paid in rent worth the amount of time you spend thinking about the home? These are just some of the questions I would ask myself. Best of luck.
What did you buy this house for? Even my 35k rental gets 850 in rent.
I would refinance to a 30 year note if possible but beyond that, repairs are necessary and will happen. 2300 actually isn’t all that much in the big scheme of things.
Everyone preaches cash flow on this site but my personal goal right now is reinvesting everything back into my real estate business. Then in 3 years (from starting) I want to have created a self sufficient business
To clarify I still cash flow it’s just not money I spend on non real estate related things.
Sorry, my computer decided to repost my earlier comment and I don't know how to remove it.
@Briana Bean Thats pretty minor stuff . I wouldnt get discouraged , its a long term investment . Some years are better than others .
I just dropped $13,000 for a new well and $7500 for a new roof on a rental all within 2 months . Wasnt planning on the well and the roof was to be done in 2 years , but things happen . These numbers can be discouraging , but I look at it this way , THEY ARE DONE . No money to be made on that house this year
@Briana Bean What market are you in? It is not uncommon to have maintenance issues when a unit first leases up and some of this sounds like one time things.
If you do want to get out you are at a great price point for seller financing and should be able to sell to an owner occupant for something in the 50k range but would have to pay off or wrap it around your current note.