How We Found a $26,000 Property in 2016
- Aug 10, 2016
- 5 min read
We found another one!! Hard to believe isn't it?! This property is awesome, I totally am in love with it. Most importantly, we are getting an incredible return on our investment.
I think the main thing when a person is looking for deals is consistency. Every spare minute I find myself on the web searching for deals. I check realtor.ca, point2homes, agent websites kijiji and Facebook. It's definitely a good idea to find yourself a great realtor as well because they do a lot of this work for you. I just like to look myself as well all over Saskatchewan, usually priced lowest to highest. I stumbled upon this gem FSBO (for sale by owner) one day and jumped on it. A strategy investors typically use to evaluate properties quickly is called the "1% Rule". Using this rule if you can receive 1% of the properties value in rental income it is worthwhile to look into the property further. In this case, the property was listed at $34,000 meaning we would only need to charge $340 a month rent for it to potentially be a worthwhile investment! This definitely caught my eye as we own a property in this area and know the rental market is strong and I believed we could get at least $700-$800.
We, however, did not pay the $34,000.. oh no. The owners were very motivated to sell and when we offered $25,000 they countered (we accepted) at $26,000!!
We put $1000 down for a deposit and put the rest on a PLOC at 6.7%. We were unable to get a mortgage on the mobile home but it's actually nice to have the PLOC for future situations. If you unfamiliar, it is a very flexible unsecured "personal" line of credit. After a few years say we pay it down, $10,000 we can then take that $10,000 back out at any time. My thought is we will use it for a future renovation or down payment.
The property is a mobile home on an owned lot (commonly, mobile homes are located in mobile parks and you don't own the land, therefore have to pay a fee to the land owner). It is 1000 square feet that has a great big fenced yard with a double car garage in the back. I couldn't be happier with it, floors are new, windows are new, the furnace is new, the roof is in good condition. It has an amazing fireplace in the living room to snuggle up to in the winter, probably my favourite part of the house.
This all makes for an easy Reno, right?!
Ha. Well, in my experience rents are never exactly "easy" especially when you want to do things properly!
The first thing we needed to do was rebuild the front porch because it was plywood and completely rotted out on top, the outside of the house needed quite a bit of work to bring it up to snuff.
I love before and Afters so I will give you a few right off the bat. Here is the outside after..
To our surprise, the joists were in good condition and installed properly! So we ripped off the plywood and one rotted joist at the end and got to work. Having a front porch is fantastic, during the Reno we would eat all our meals out there (nothing fancy usually pasta salad from the container or frozen pizza #renolife) Never had a front porch like that so it was pretty nice actually.
Scott is my partner in this project and since he is between jobs right now and waiting for the next one to start, he is working full force on making this place beautiful. I've come out on the weekends, luckily I work ten hour days so I get a three day weekend every week! I drove out the 3.5 hours to get this reno complete.
Our main goal with these rentals is making a clean, comfortable and functional place for our tenants to live. We believe by doing the renos properly we will be able to get the best tenants into the property and will have less problems down the road!
What was involved in the renovation..
-Painted EVERYTHING (literally)
-Baseboards and crown moulding
-New kitchen Cabinets and Countertop
-New Blinds
-New front porch
-Cut branches above roof line
-New tub surround and vanity counter tops
-New kitchen and bathroom floors
-Some custom closets and cabinetry
Quick tip, We decided to go with the same paint colour in all of our properties. It will make it easier in the future when we go to touch things up we will easily be able to pick up the same colour and quickly roll the walls without having to cut in or put on multiple coats! Makes things simple in the long run.
The total cost of the renovation including materials, food and gas to get to the property was $6,210.12 and completed within 17 days.
Before After
A few more afters..... (didn't take any of the porch before for some reason)
I want a fire place in my house!!! Love this feature :)
And yes, we had a few beers after the reno. Saskatchewan has some awesome sunsets to relax too as well :) Too bad after about 30 seconds we were covered in mosquitos...
Back to business, we advertised the property on Kijiji, Facebook and the paper. Surprisingly, Facebook got the best response! Here is an example of the ad I wrote for this property.
I have always been more attracted to the ads that paint a picture of what it'd be like to live at a property instead of just the straight bullet-point facts. It's obviously important to incorporate ALL the essential facts in there so you don't get unnecessary questions, it wastes everyone's time when they could have been easily been answered within the ad. I actually forgot to write about the damage deposit in this ad so I got a few inquires about that, takes a few tries to tweak them.
Another thing I really like to do is make up a gift basket for my tenants and leave a little card to welcome them to their new home. I think the effort shows through and I feel like I would appreciate the gesture so I try to that for them.
We now have a signed lease at $875 for six months with a great tenant. We are very happy with the rent we are receiving and heard multiple times it was the best rental on the market! It made us feel proud and glad to provide a rental people love!
I keep my Instagram updated with pictures and videos of these projects and more! Give me a follow @investorgirlbritt Click here -->
Now we are on to the next project, keep tuned in!
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