New to BFS? Please click here to get started. See you in the comments soon!

Property Empire in Our Future?

Mr. BFS and I would love to diversify our investments for retirement, and the rental property we have is making us crave more.  We’re looking at our buying options and finances right now to see if we really need to wait until next year like we originally planned.  Here is how it is looking. Our Targets I was browsing foreclosures in our area last week and noticed two in our old neighborhood.  That area is perfect for rental property! Homes built in 2004 and 2005. $110,000 to $130,000 foreclosures with 3-4 bedrooms and 2.5-3 baths. The homes need less than $10,000 in repairs and basic renovations before renting. Great school district. A solid market for tenants at $1300-$1500 per month since the area is nice (safe suburbia close to groceries and entertainment). Well built homes (we have had very low maintenance costs on our first house in these last 6 years). Affordable property taxes ($2500-$3000 a year). No home owner’s association.  Score! 5 miles away from our new house (10-20 minute drive depending on the time of day).  That’s close enough to keep an eye on our properties but far enough away that we won’t be physically visited by our tenants very often. The only … Read more

Budgeting in the Roommate Stuff

Is it really cheaper to get a roommate? Living with another person is a way to save on rent, but what about the other costs of a housemate that you need to add to your budget?

Some of my newsletter subscribers left great questions this month in the newsletter giveaway post (look at the right sidebar if you’d like to sign up).  Here was one from Kim that needed it’s own post: Can you do a post on how having roommates affects your budgeting? As I’ve posted before, we rent out the downstairs spare bedroom of our house to a college couple.  We’ll also be living with my younger sister for most of January 2013 and maybe longer if she decides to rent out the spare bedroom upstairs starting in February. Overall, having roommates hasn’t changed our budget all that much.  There has been little extra expenses, but nothing budget-shattering.  And the extra $600 in rent a month is really nice for padding purposes, but it hasn’t ever been the difference between paying our bills or not. Roommate Expenses Here are the most obvious extra expenses that I can think of: Utilities – Based on the bills at the old house, our electricity bill increased $25-$50 when our roommates moved in and our water bill went up by about $5.  I don’t know their actual impact on our utility bills in the new house, which has … Read more

Adventures in Landlording – So Far, So Good

It’s been a while since I talked about our rental income.  I’ve written about how we currently rent out a spare bedroom in our own home to a couple of our friends.  And I mentioned that we spent about $750 on fixing up our first house to get it ready to be moved into for November.  Here are our most recent updates on our adventures in landlording.  🙂 Rental House The $750 we spent on getting our last house move-in ready seems to have paid off.  Our tenant moved in November 9 and only has had a few issues to fix.  The first one was that the side gate to the backyard wouldn’t open without manhandling it.  I had forgotten about that, but our neighbor over there offered to check in on little stuff like that, so I gave him a call.  He fixed it within a couple of days and wouldn’t accept anything but gratitude. When it became apparent that there was also a little leak under the kitchen sink, he also popped in for 5 minutes and tightened a loose connection.  I dropped off a 24 bottle pack of his favorite beer as a thank you for both little jobs.  He seemed … Read more

Getting the Rental House Ready – Almost “Real” Landlords!!!

I know I’ve talked about our new house a ton over the last few months, but I don’t think I’ve really gotten into the the fact that we were planning to rent out our old home.  We’ve rented out a spare bedroom in our own home on and off for about 5 years, but this will be our first leap into being landlords for a whole house.  It’s actually taken longer than I thought it would to get it ready to go, but it is 99.9% done and our new tenant will move in tomorrow! What We’ve Done Okay, so here is everything we had to do (and how much it cost) in order for the house to be ready to go: Repaint the entire bottom floor since no one except Mr. BFS likes Mint Chocolate Chip Green as the main color – $125 thanks to free labor from Isabelle and Ivy! Sand and repaint back door since it was getting rusty – $20 Touch up paint and nail holes elsewhere – $15 Replace upstairs guest toilet – $195  ($95 toilet kit and $100 labor – yeah, I just hired help, don’t yell at me) Replace downstairs toilet – $165  ($85 toilet … Read more

Doing it Again – Renting Out a Spare Bedroom

We rented out the spare bedroom of our current home 2 of the 5 years we’ve lived here.  And we’re doing it again starting today. Back Story We had three tenants over 2 years.  The first one was our friend, but he only needed a place to stay for 3 months.  We enjoyed the extra income so much that we looked for another tenant (this time on Craigslist) when he moved out.  The second renter stayed for 1.5 years and was awesome.  Then we hit Craigslist again and got the third tenant – a complete idiot and jerk – for 3 months and then we sort of told him to get his crap and get out ASAP.  He vacated pretty fast.  That all happened from 2007-2009. Well, now a set of our friends are in a bad situation with a physically threatening landlord that rather they didn’t leave, so they’re hightailing it into our house for the next few months.  They appreciate being able to leave their current situation and we will appreciate the extra cash flow while we are saving up some cash on hand.  If it works out, they’ll continue being tenants in our new home.  If it doesn’t, they’ll find a … Read more

Need Money? Have an Extra Bedroom?

A year after my husband and I bought our 3 bedroom home, a friend needed a place to stay for a little while. Our guest bedroom was open and our friend was living in an overpriced hotel. When he offered to pay $350 and half of the utilities per month, we happily agreed to turn the spare room into a bedroom rental. Since our mortgage payments are only $740, it was a win-win for everybody. Bedroom Rental Three months later, our friend moved on. We thought we’d love having complete privacy again, but we missed the money more. After a 20 minute discussion, we decided to list our spare room as a bedroom rental on Craigslist. I knew nothing about actually renting out the room, so I looked up ideas online. I listed the room in detail with pictures of the spaces that were being rented out – room, bathroom, laundry area, and kitchen. I asked questions on the phone about pets and smoking habits. When they showed up for our scheduled meetings, they filled out their job and housing history and signed off on background checks. I’ll be honest, I knew exactly who I wanted to live with by the … Read more