Since I have just sent all my tax information to my accountant, I thought it would be a good opportunity to review the first year on my investment property and see if I made any money. Of course, the numbers are a little off because we did not finish the house until the last week of July 2010. That means no income until July 24, 2010, when our first weekly tenant moved in. That being said, my partners and I are happy with the results.
We took in $22,500 in rental income.
Our expense were:
- Account/Legal $1,000
- Advertising $175.00
- Cable $915
- Cleaning $750.00
- Merc/Dues $225
- Lawn $200
- Taxes $3,500
- Trash $300
- Utilities $2000
- Insurance $1000
- Total $10,065.00
That means there was a profit of $12,435.00. That profit was split between 14 share, so each share earned $890.00. That was only a return of .0178. Not the profit I was hoping for, but, everything is paid for and this year we will have a full year of rentals.
These numbers do not include the two trips to Urgent Care for my girlfriend and I for treatment of the WORST poison ivy I have ever experienced in my life.
I am sharing these numbers because I feel it is important for anyone thinking about investing or buying a second home that the payoff is LONG term, and it is not a sure thing. When deciding whether or not to purchase a second home, be prepared for unexpected expenses and do not buy if you are totally relying on the rental income to cover your expenses.
But, if you are prepared, there has never been a better time to enter the market. Inventory is high, prices and interest rates are low. I am doing everything I can to encourage qualified Buyers to jump in now.
