LISTEN TO THE FULL EPISODE
Thanks so much for tuning into episode 4 of the From The Nest Podcast!
INCOME PROPERTY STATS:
Asking price: $99,900
Purchase Price: $87,000
Square Footage: 1,290
School District: good
We spent about $10K on renovations for this property which included new appliances, a brand new kitchen and a fresh paint job. To see the full story behind this home and all of the before photos, check out this post.
The entire kitchen was purchased through The Home Depot.
Built in buffet for extra storage with a stained piece of pine as the countertop to lower the cost ($20)
New paint throughout the entire house
We painted the built-ins white and added new knobs
THE ONE THING WE WOULD CHANGE
The one thing we would change if we could do this renovation over again - the flooring! In theory, this floor seems like it would work great, but because it is an old house and the floors are not completely level, the floor tiles do not snap together perfectly and are not completely flush in all areas of the kitchen.
ANALYZING THE DEAL
CAP RATE = Net Operating Income / Property Value
Net Operating Income (NOI) = annual gross income - annual expenses
Annual expenses: Property Expenses, maintenance, taxes, insurance
Property Value (what we bought the property for): $87,000
Annual Gross Income (annual rent): $14,400 ($1,200/month)
Annual Expenses: $3,700
Annual Taxes: $1,300
Annual Insurance: $1,200
Annual Maintenance: $1,200
NOI: $14,400 - $3,700 = $10,700
CAP RATE: $10,700/$87,000 = 12%
CHRIS AND LINDSEY’S TIP OF THE WEEK
Tip from Chris: If you have a crawl space, make sure your pipes are insulated to avoid your pipes from bursting in cold weather
Tip from Lindsey: Paint stores offer color matching. You can bring in a chip of a current paint color or ask someone at the store for the booklet of swatches from a more expensive paint store and have them color match paint with a less expensive brand. I have done this with Sherwin Williams colors using Behr paint.