It’s closing week! I’m super excited for my newest investment property that is closing this week! This property is extra special because not only will it provide a great return, but we will finally hit our six figure rental income milestone! It’s been a 10 year journey, and with each property we’ve become better investors and this property goes to show that no matter the economy or the market, there are still great deals out there.
This property is a single story duplex (two units) in Mount Vernon, WA. Each unit has two bedrooms, one bath and it’s 900 square feet on each side.
This property will add an additional $1082 per month in cash flow – and it’s a 20% return on investment!
Since my last rental purchase, the interest rate has gone up a bit but it’s still a great deal.
You’ll also notice that like my last purchase, this one has a zero vacancy rate and no property management expenses. This is due to it being part of the community living program that many states have which offers housing to people with disabilities. The state provides caregivers and handles all of the care and tenant needs and as a landlord, I am only responsible for the property.
With this new purchase, we’ll receive $21,438 per month in rents from all properties (assuming full occupancy) and our net cash flow will be around $8,683 per month (with full occupancy less mortgages and utilities). We do have a few properties pending sale and a new property closing in Tennessee next week so our portfolio numbers will change slightly but we’ll still be above $100,000 in annual rental income.
Another thing that I look at with each new property additional is our total monthly rents received number. I enjoy running projections and reviewing our financial freedom number.
If we were to stop buying rental properties, in 30 years or less, all properties will be paid off. Even if the rents stayed exactly the same as they are now, we would be 60 years old earning $250,000+ annually and have over $ 3 million in paid off properties. That feels pretty good to me, and obviously the value of the real estate would go up and the rents would probably double in 30 years, but I believe we could live a pretty comfortable life on just the rental income.
The way I see it, we’ve built our own financial freedom portfolio which provides monthly income along with a monthly net worth increase (with appreciation and principal pay down) and tax write offs.
If you’re reading this and thinking that a six figure rental income is an unattainable goal, remember this was a 10 year journey for us. Up until this year, we purchased one rental property per year (except in 2012 when we purchased 2). The key to building your own financial freedom portfolio is to give it time and to cherry pick the best rentals and buy right!
Next week I’ll be sharing about my other closing in Tennessee so stay tuned!
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