I was hesitant to write this post. I was not sure if it fit in here with the chickens, homesteading, and gardening…but I have been asked so many questions about a recent remodel that we did for our newest rental I thought I would try to answer some of them here.
Well the writers and the readers of this blog are an independent, hardworking bunch that don’t always follow the same path as the rest of the ‘normal’ world. So discussing financial freedom through a less than common means seems appropriate here.
First of all we did not set out to own rental houses. Just a year after we purchased our first home my husband took a job across the state. We tried our best to sell our home but couldn’t. We were left with no option that we could financially manage except to rent it out. It rented quickly, we asked just enough to cover our mortgage with taxes and insurance. As complete novices we lucked out and got great renters that ended up staying there 20 years!
When we purchased our next home across state it needed a lot of work...a lot! Being young and eager to learn we took it as a challenge to remodel our own home. We learned to strip wood molding, lay flooring, hang wallpaper, re-plumb, re-wire, put in new bathroom fixtures, and a whole host of other skills that would serve us well over the next 2 decades.
When it was done we looked around and grinned at each other…”want to do it again?“. So on to the next house we went. Instead of selling the original home we decided to rent it out. How could we afford a down payment without selling the other house? Well we saved up for the down payment, just like people do on their first house.. Instead of doing the typical move up to a bigger and more expensive house we purchased another just like the one we were in. In fact it was only 2 blocks away and a little less money than the first! It again needed tons of work. This time we tackled an addition as well as the usual jobs. Mark some more skills off our need to learn list…roofing, siding, framing…check!
We again moved across state and ended up selling the home we had just finished and use the money for a down payment on the next house plus a decent nest egg to use when we found another real estate purchase. The very first house was now a rental, the second was also a rental, the third was sold.
We did this 3 more times moving, remodeling, renting…we now had 5 rentals.
All the while we were searching for somewhere to build…somewhere in the country with acreage.
We had to search for a few years until our current property was finally found…flat place to build, south facing, no busy road, property for my parents, room for animals, and of course room for a garden! As the farmer who owned the property would not just sell us the 15 that we wanted we bought 38 acres in total. I would have LOVED to have kept the whole 38 acres and lived there just my family and my parents. But my husband wanted to have a home that was debt free…besides I think he might have been worried about how many animals I would acquire if I had that many acres to fill!
We sold 2 rentals to come up with the down payment we needed.
So we divided, improved, and sold 23 acres. We made enough money to build our house without a mortgage. This also gave us the freedom to be our own contractors, do much of the work and build at our own pace which would not be possible if a bank had been involved. The skills we learned from remodeling were put to good use on the construction project. It is an experience I will always look back on and be glad I did.
Now I am not going to try to fool you and say that owning rentals is for everyone. We can make it work because we know how to fix a sink or patch a roof…if we had to hire this done it would be hard to be profitable. We also are very diligent to screen our renters. Lastly we are fair landlords who ask a fair rent, enough to cover our expenses but we do not make lots of extra money each month. We could ask more, but we don’t. We appreciate that affordable housing in nice neighborhoods is a rarity. We like that we rent to working families who treat our homes well in part because that have been treated well.
We have found that investment in real estate has been more dependable and more profitable than any other ways we have tried to invest for our future. As long as you don’t speculate, flip, or otherwise try to ‘get rich quick’ with real estate, because this journey has been neither quick nor easy. We have spent countless hours on our knees laying tile, and fishing wire. But it has been a journey of much learning and much reward.
Oh and by the way…we are still not done with our house! I am hoping to start baseboards this summer!