My favorite investment story is the one about the first rental investment I ever made, my husband and I purchased a San Francisco Condominium for $89,000.
My husband and I had just graduated from college and I thought this was a large investment. We scraped and saved and, within a few months we had saved enough for the down payment on a 400-square-foot condominium. It included a washer/dryer, kitchen, closet and an area just big enough for a Murphy bed. The unit was on the top floor so we could call it a ‘penthouse’ and the window was just big enough to look out under the onramp of the Bay Bridge.
The condo wasn’t much to talk about, but it had all the necessary features and, for an extra $60,000, we added a parking space.
This property turned into the best rental property and, within a few years, the property was renting for $3,900 per month.
I like to think of all of my real estate investments as tools in my toolbox. Some I use to develop cash, some I use to fund the next property, and some I sell to accomplish larger goals. For example in 2001, as the events of September 11th happened and the world stood still, I was completing a home I had been building for the previous 15 months. Just as the air traffic was frozen, so was the real estate market and, as a result, I couldn’t sell my primary residence which would have enabled us to have the needed down payment to purchase our new home. However, even in bad times, the least expensive real estate in the best neighborhood will always sell. So only two months later, in November, 2011, we sold that first investment condo for over $400,000, over a $300,000 return on our initial investment of $89,000, giving us the need cash to finish building our new home.
Have fun investing in your future!
Regardless of your real estate experience, there are always important fundamentals that are important for you to remember and understand and that are essential elements for your success.
To get you stated keep these 3 principals in mind:
- First, always treat your rental property as a business and make decisions accordingly.
- Second, respect and appreciate your tenants; they are the clients and customers to your business. Without them, you will not survive.
- Third, it is your responsibility as a property owner to maintain the safety and integrity of your investment.
This blog is designed to reinforce these concepts and give you the confidence necessary to operate your property successfully and earn residual income and long-term profit.