We still haven’t closed on our three rental properties, it’s taking forever. Our estimated closing date was July 28th and we’re still waiting on the seller and his attorney. It’s been complicated, but I’m hopeful we close sometime in August. For now I still just have my one rental property that I’m owner occupying.
As of July, it now costs me an average of $269.44 to own this rental property. This is the third month in a row that I’ve paid an extra $60.78 on the principal. It could cost me a little less, on average, if I didn’t pay more. If I continue to make the same extra payment for the life of the mortgage it will cut my 30 year time frame down to 21 years. Not bad, but I would like to pay it off sooner than that. I hate paying interest on anything, but my interest rate is relatively low at 4.125% so it’s not that bad. I made some changes to my insurance policies in July so my homeowner’s insurance will go down slightly.
In July, it cost me $338.76 to owner occupy this house, quite a bit higher than my monthly average, but quite a bit lower than June. Ideally, the the average would be right around $300. Again, I spent some extra money on the property this month.
I needed a new lock for a door because this door had a skeleton key which broke, you can see where one of the teeth are missing in the picture below. The door was stuck locked but, I managed to pick the lock and get the door open.
This is the new lock that I bought for the door. It’s effective, good looking and it only cost me about $8 at Home Depot.
I also bought two gallons of paint and painted the foundation of the house, this is where the rest of the miscellaneous expenses for the month came from. I would like to paint the entire house and garage this year. It will be a large expense but it could definitely use it. Luckily, most of the things that I do to the house are tax write-offs and I’m relatively picky about the things that I do.
The biggest downfall to this rental property is that the electric isn’t split. I think that’s part of the reason my expenses have been on an upward trend this year, aside from the additional principal payments. There’s three window air conditioner units and I’ve seen the increased electric cost while these have been running. We have one in our apartment and my tenant has two upstairs. I could probably forbid window air conditioners in the unit, but that would just be cruel.
Alternatively, at some point I would like to look into getting the electric split. I don’t mind paying the electric for now since I’m living here, but in the future when I don’t, I’m sure I won’t be too fond of it. I think this could easily save me $60-80/month, while I live here, but I’m not sure what it would cost to get it done. Unfortunately, that isn’t something that I can do on my own.
I’m excited to close on our three new rental properties and I feel pretty confident that we’ll close in August. For those who haven’t read up to this point (here’s June’s Update), my father and I are partnering on three multi family homes for a total of 7 units. Two, two family homes and one three family house. The information about these properties will be in this post as well, after we close.