First Home to First Rental - 6 years
Investment Info:
Single-family residence buy & hold investment in Cincinnati.
Purchase price: $179,500
Cash invested: $20,000
This was our first home purchase made back in 2013. It is in a very desirable neighborhood in Cincinnati that has exploded with growth since we moved in. Price appreciation has grown 100k since our time living there and has really opened our eyes to the power and advantages of real estate investing! We have since scaled all our stock investments back and going all in on buy and hold rental property investing! We are going to rent this house out starting in 2019, and hope to keep the momentum!
What made you interested in investing in this type of deal?
This was our first home. We purchased it 3 years out of college and remember it being terrifying signing up for such a large mortgage WITH 80k worth of student loans left. I'm so glad we did though!
How did you find this deal and how did you negotiate it?
The recession was just turning around, so the market was favoring buyers. The house stood on the market for a long period of time and the price drops eventually got it into the top end of our budget. We loved the location and pulled the trigger. It truly has paid off.
How did you finance this deal?
Conventional 30 yr. mortgage. 3.75% Interest Rate.
Got a PMI appraisel after 3 years because of appreciation in the neighborhood, and was able to drop PMI 3 years early and save $5000!
Also, opened a HELOC after 5 years to get access to equity built up through appreciation.
How did you add value to the deal?
Over 7 years, we added value through multiple small projects. New master closet, backyard paver patio with built in fire pit and privacy fence. We updated all the fixturing, refinished the hardwood and updated the trim and paint. Our goal was to improve the home over time and I feel like we ended with a very rentable upscale home that could demand top dollar.
What was the outcome?
In 2019, we will be moving out and begin renting it out. We were able to secure a nice tenant the first week we put it on the market for far above market rent for the area. We are happy!
Lessons learned? Challenges?
Continuous improvement to your home can be a great investment over time! Anyone can figure out how to do anything through enough research. DIY projects add value to your home AND your net worth. Location has also proven to be a huge advantage to rental demand and house appreciation.