Friday, August 31, 2012

Goal Achieved: Buying My Last Rental Property!

Well folks, it's taken me five years to the month and I am about to achieve the first long term financial goal I ever set: to purchase 10 rental properties over 10 years.  And I've met it in half the time I expected.  I originally outlined my financial goals in July 2007 in this post

To be fair, I've amended the meaning of the goal slightly.  After the closing of my newest rental I will technically own 10 distinct properties in the DFW area which could all be sold and are all titled separately.  However 8 of those units are actually halves of duplexes.  So while I can say I own 10 "units" I really own four duplexes, a condo and a town home. I have made only 6 buying decisions, and I'll only have 6 mortgages.  

But I've decided that is only semantics and regardless of how many units I have I am finished with the acquisition phase of this goal.  Having 10 rental units (one of which I live in) means juggling 9 tenants.  And I will have amassed just over one MILLION dollars worth of real estate - and the debt to go with it.  That's quite a handful for a girl who is still not quite pushing 30 years old.  

I'm not saying I'll never buy another property, obviously, but I am now going to focus on Phase Two - paying down the mortgages on the real estate I've got.  So whenever I need to move, I may actually sell one of my properties first in order to do so (unless I'm married or otherwise acting with a partner who has more capital/income than I do).  I'm not personally interested in being more highly leveraged than I am now.  

Regarding the new rental, I am very excited.  It will be my most expensive purchase yet at $245K, but the timing couldn't be better as far as price and mortgage rates.  And the location is EXCELLENT.  Just down the street from where I live now in fact.  Also it's a new property type - a 2 bedroom town home, less than 20 years old, perfect layout for roommates.  Further, it will attract a new type of tenant for me - the upper middle class type with income/parents to pay the rent.  

I considered moving into the new place and renting out my current condo instead.  I have a friend who would move in with me.  I'd save overall about $350 a month by moving in with her.  But I'm not sure it's worth it...we are each of marrying age and unlikely to stay there long term.  Meaning I'd probably be moving twice in the next few years.  Plus I haven't had a roommate in 6 years.  And we both have dogs...yes $350 a month is a lot, but I also love the home I've built for myself in my condo.  

Oh well, there's plenty of time to figure that out.  Point is I actually would and could live there if needed - which is another nice change of pace.  I'm moving around the monopoly board!

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