Inside the $77K Investment Property Update
After the last the Passive Income update, several people has requested to see the numbers of my rental property. So I thought, I’d write up one. If you are interested to see what the property was looking like, feel free to check it out here.
Sumary about the property:
This is a park front, 1 block away from the river, and a bike trail that leads to the Botanical Garden, Downtown farmer market. Within 1 miles radius of grocery shopping. A few blocks from the city community swimming center. Within 2-3 miles radius of where my siblings are living. Basically, I hope to call this home. That was why I had it fully paid off. And all of the work that is done on the house has to be solid so that it can last for another 100 years or more. I’d like a solid renovation, not just cosmetic or aesthetic.
Here are some of the before and after pictures:
Study room before:
Study Room after.
- The ugly red carpet is out. A new vinyl/wood floor is in.
- The blue is out. A neutral white wall is in. We kept the trim because it has characters.
- New outlets is install and rerun. No hanging cables. Several truckloads of trash later.
- Remember the entry door to the kitchen? Well, now there is a bar and a window to open up the kitchen. You can wake up, go downstairs, go into the kitchen, get something, then sit at the bar to eat breakfast. Or sitting at the bar, talking to the people who’s cooking in the kitchen? LOL 🙂
- Notice the floor is refinished. Put on a shiny coat of stain, and here we are.
- You can’t see from the picture, but the kitchen is reconfigure to give more meaningful spaces.
Here is another view looking out from the kitchen bar:
I couldn’t find the most updated pictures, but you get the ideas.
**view from one of the bedroom window looking out to the tennis court. Upstairs bedroom windows, we can see the little pool.
By the numbers:
- The renovation is over the budget. Originally, I budget for $16.5K. It came in at $20K and counting. As I need new window and painting outside down the road.
- I bought the house for $55,001, but with paper work it came out to be $56,900.
- Insurance:My sister pays for hers for $500-600, since I don’t have multi-property in down, and no cars, I don’t have the discount benefit. And my house is twice as big. So, it’s $730/year or $60.84/mo
- Taxes: $2238/yr or $186.50/mo
- Management fee: $50/mo
- Surprise repairs or maintenance cost: $120/mo . This number can be added back to my net if I don’t use it for a year.
- Rental Income: $1200/mo
Monthly Income: $1200
- Monthly Expense: ($60.84 + $186.65+$50+$120): $417.49
- Monthly Net Profit: $782.51. This number can be change depending on house much taxes I can take.
- Yearly Net Profit before taxes: $9390.12.
- Taxes analysis: Depreciation over 27.5 years: $2800/year
- Amount subjected to taxes: $6590.12
- Withholding for taxes 15%: $988.52
- Yearly Net Profit After taxes: $8,402 or $700/mo. **I’ll probably use this number from this point forward**. That way, I don’t inflate my number too too much. Although, with dividend income, I didn’t consider taxes. We’ll see. After a full year.
- Upfront Cost: $77000
ROI: 10.91%. It’s not too shabby, but it’s not as good as my 4-plex.
- The County Assessed the house at $93,500 for the taxes of $2238/year
- Zillow gives the price of $124,323
- Comps: $150K-$400K in the area, especially on the Park Front properties, which is where this property is located.
- My assessment: Priceless, hihihi.. I hope to call this house my home once I’m fully retired.
Please let me know what you think, and what’s missing. I’m not a professional investor. I do things sometimes seems or looks “impulsive” like buying the property sight unseen. But when I bought the property, I did have a lot of things into considerations.