For several years we’ve debated whether rentals were something we wanted to do. They are a lot of hassle but, if done right, generate significate returns.
Last fall we received our final share of inheritance after the death of Kelly’s parents in 2021. Rather than spending on immediate wants, we put the money in the bank in a high interest rate account while we thought about what we wanted to do.
Early this year we went to dinner with our long-time realtor friends and discussed rentals. They not only sell real estate but have been investors for a number of years. During our dinner we learned they planned to launch a management company. That sealed the deal for us.
We were one of their first Dave Ramsey real estate clients and were happy to be one of their first management clients.
From that dinner in early February to mid-March, we went from being not rental owners to having our first property.
It took a couple of months to fix a couple of items and lease the property. While the management company focused on that, we set up an LLC with the State of Texas for our rental business.
We quickly started looking for a second property and found it soon after. Once again the process went smoothly and it rented even faster than the first property.
It’s nice to have the passive income, despite the water theft at one property while we were waiting to get it rented and the HVAC failure at another, requiring replacement. By our calculations, we’ll be 100% generating profit by the end of 2024. This factors in all repairs and property taxes paid. So far both properties are generating better return on investment than the bank did. We’re glad we sat on our inheritance funds for several months while we thought through the best investment strategy.
We intend to use the profits to fund some much-needed home renovations at our primary property, then reinvest to possibly purchase more rentals in the future.