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Wednesday, July 21

Selling One of the Rental Properties, Part 1

Sometimes you have to come up for air!

That's the way I've felt the last few weeks. July has turned out to be a decent month for mystery shopping, so most of my time has been spent hustling for shops. That's not the only thing I've been up to though.

My big project right now has been getting one of my properties ready to sell. My investing philosophy, one which I so strongly believe in, is "buy and hold". That's why deciding to sell one of my rental properties has been a tough decision. I love the house (I used to live there). It's in a super convenient location, but the schools suck. Where I really messed up is in trying to rent a higher end property. I just can't earn enough rent on it. Consider:
  • I bought a townhouse for about $35,000 that rents for $625 per month. I bought another for around $45,000 that rents for the same.
  • I bought this house for $154,000 and can charge $1,100 per month.
I get more rent for the house, but not the same percentage as I do on my lower end properties. That, and the property taxes and insurance are much higher, making this my only money-losing property out of the 7 rentals I own. My rule of thumb is that I need to earn 1% of the home's cost each month. For that $35,000 home, I need $350 per month. I would need more than $1,500 per month for the house I am selling.

I'm losing $400 per month, so the house has to go.

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