Our story of being able to use our first home as an investment property... 

Our first home was a fixer-upper & not move-in ready. But, it was in the location we wanted to be in & had the bones to go from a 2 bedroom / 1 bathroom to a 3 bedroom / 2 bathroom. So, we got to work with our trusted contractors by our side. After a few months of renovations, it was ready to live in. During this time, the real estate market had an extreme uptick & interest rates hit an all-time low, so along with our improvements, our equity was boosted dramatically. That was not necessarily our plan, but sometimes when you buy- you ‘time the market’ without even trying. Pro tip = don’t try to time the real estate market, it never works.

A couple years down the road, a house popped up that we loved. We quickly called our lender & had him start running the numbers. If we could, we wanted to keep our current home as a rental & buy this new one. One catch- we had to get a 12 month lease in place in order to obtain the loan. After some calls & texts to friends, we found awesome tenants to rent for the next year. Now, this property provides us a monthly passive income as it continues to gain equity. For the time being, it will remain a rental & we will continue to utilize the income, or, we may choose to sell it in the future to fund a new venture ie. our daughter’s college, retirement, a new house, or some other curveball life throws our way.

Options for using your first home as an investment property...

Long-Term Rental

Long-term rentals are considered any lease six months & over. I was thrilled about our house becoming a long-term rental because it meant less management on our end. We opted to have a property management company draw a lease up for us & background check the tenants. From there, we took the reins & handle the communication, maintenance, etc. This has been a super manageable & simple way to run this property. Pros of long-term rentals - consistent income, consistent stream of communication & often, renewed leases. 

Short-Term Rental

There has been a lot of buzz around Air BnB’s & short term rentals after they gained popularity during COVID. Many people bought them, turned long-term rentals into them or stayed in them every vacation they took. They are an incredible investment path, but do require a well-executed plan. Things to think about: Who is going to set up the property profiles on which websites? Who is going to clean? How do we decrease vacancies? Who is going to communicate with all guests? How much are we going to charge per night, for cleaning fees, pet fees, etc.? Are we going to hire a management company? Pros of short-term rentals - often a higher nightly rate, you can get your eyes on the property more frequently & you can block out nights for your own personal use if needed.

All-In-all, your first home & real estate in general can becomes passive income & continue to build your wealth. There are many ways to carry this out & many different timelines. If you have any questions about what this could look like for you or items in this article, please reach out. I’d love to connect, help & chat with you!