Saturday, March 23, 2013

Real Estate - Increased Rent

The lease on my house rental was expiring next month.  Rental rates in my area have been going up rapidly.  My condo rented in 1 day on the market last year.  I plan to increase the rent on that unit next.  Austin was rated by Forbes as America's fastest growing city.  See the article here if interested.   

 


 I was currently renting a 4/2.5 for $1600.  I gave the tennants the option of renewing for 1 year at $1750 or 2 years at $1700.  They offered 1 year at $1675 but I settled for a 1 year renewal at $1700.  So I was able to get an additional $100/month or $1200/year rent.  This will certainly boost my income. 

I don't expect a lot of real estate updates this year.  I will be renewing the condo lease soon but my goal of refinancing my primary residence to around 3% may not happen.  If you have noticed, interest rates are already on the climb.  Bankrate has the 30-year fixed average at 3.74%.  This is up from around 3.25% earlier in the year. 

I plan to continue aggressively building my DG portfolio until it equals the value I have invested in real estate.  Then I may start to pay off the condo rental or look for another rental property. 






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8 comments:

  1. Unknown3/23/2013

    You have a good plan with balancing your DG portfolio and RE adventures. Its a great feeling knowing you have total control over your own dividends =) [rental income]

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    Replies
    1. All About Interest3/25/2013

      Hi Investing Early,

      Thanks! I agree with you that it's a good feeling to have control over and be able to increase dividends and rental income each year. I plan to have my DG portfolio in balance with my real estate investments by the end of the year.

      Thanks for dropping by!

      Delete
  2. Pay off my rentals3/24/2013

    What an easy boost! $100.00 increase in nothing to sneeze at. Good job. Our rental market is generally relatively strong. However, about 18 months ago we had to start dropping rents a bit as a lot of vacancies came on the market. Hopefully, once they're absorbed, the rents will start climbing again. Taxes and Insurance are rising every year. Rents need to keep pace.

    I'm still committed to paying off my rental real estate before I start investing in DG stocks. That takes a lot of self-discipline on my part because I really like DG stocks as a passive income source. I have to keep telling myself, "Patience Grasshopper".

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    Replies
    1. All About Interest3/25/2013

      Pay off my rentals,

      Thanks for the encouragement! You do make a good point about the market though. Rental prices generally go up but we are at the mercy of the market. There will be some ups and downs. As long as I can increase rent at a rate higher than inflation and keep up with rising insurance then I am doing ok.

      I like what you're doing with your rental properties. Once you have those rentals paid off you will have a lot of additional cash flow to invest in DG stocks or whatever else you are interested in. Patience is indeed a virtue.

      Take care!

      Thanks

      Delete
  3. writing2reality3/24/2013

    Nice work AAI!! A 6.25% increase in rent is nothing to sneeze at, and certainly the additional $1,200 should be mostly extra profit!

    I'm currently trying to refinance my unintentional rental now to hopefully make it is less crappy situation. Should have some solid news in the next couple weeks!

    ReplyDelete
    Replies
    1. All About Interest3/25/2013

      writing2reality,

      Thanks! I agree that it was a nice boost. I only wish I could increase rent at that pace each year. The $1200 will be mostly profit and will be extra money I have available to buy more DG stocks.

      I thought about selling my house rental at one point. Instead I refinanced and now have positive cash flow. I look forward to seeing the update on your refinance.

      Thanks for stopping by!

      Delete
  4. Compounding Income3/25/2013

    Congratulations! A very nice boost indeed!

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    Replies
    1. All About Interest3/25/2013

      Hey CI,

      Thanks for stopping by to comment. Dividend increases are nice but so are rental income increases. I welcome both and this will be a nice boost to my cash flow.

      Cheers

      Delete

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