REAL ESTATE INVESTING

This everyday home was purchased for $422,000 in January of 2021. We invested $75,000 into renovations, updates & furnishings and then listed it on Airbnb with a local property manager. Within 3 weeks, the home was fully rented for 10 months straight at our nightly rate!

Investing in a home that can be rented out for vacation use on sites like AirBnb, VRBO and others can be an excellent consistent income generator. In this case, the mortgage is $2,300/month including utilities, + our property management fee of 10%, while the income from AirBnb is $9,000/month. That’s almost 6k per month in income with almost ZERO upkeep outside of our property manager!

This family home was purchased for $300,000 in mid-2004. The owners lived there for several years before turning it into a rental property. By the time they decided to sell, the home was in disarray and needed some updating. They were referred to me to determine if they should sell as-is or do some updating to maximize profits. The original list price would have been $500,000, so they decided to hire a general contractor and invest $200,000 into the kitchen, bathroom, flooring, roofing, interior & exterior paint, exterior siding, windows, interior doors & trim. The home was then listed and sold for $900,000, which netted the sellers an additional $200,000 in income!

This home was initially purchased as a family home in 2002. The owners lived there for 16 years before turning it into a long-term rental. After renting it for 3 years, the owners decided it was time to sell to maximize their capital gains tax exemption of $500,000. They also determined it was necessary to complete some updating prior to listing to freshen up the home and maximize their profits. With the help of my general contractor and my team of professionals, they invested $25,000 into the kitchen, hall bathroom & interior painting. Prior to listing, this home was only worth $1,400,000. With this minimal investment, along with interior staging, their home ended up selling for $1,700,000! That’s a $300,000 difference! I can’t stress enough to my clients the importance of having your home in the best condition possible prior to listing. Do not offer a credit at closing – buyers want mov-in ready homes, not a credit, and they are willing to pay for it!

From their gains, the sellers opted to do a 1031 exchange with the amount they realized, into two different properties – a brand new Seattle townhome and a single-family home in Arizona. Both will be used as long-term rentals with the help of property managers.