Here to learn, network, and take action! Southwest Ontario, Canada.

[Tyler McKaig]

Hey BP,

My name is Tyler, 29 years old, and I am a recent "accidental landlord". Although I have always thought highly of REI, it wasn't until I needed to move for my career, that I became a landlord for my first property. I hope to tell you a bit about my story, and become more engaged with this community to continue taking steps in the right direction to achieve my goals.

In early 2012, it was time for my wife, 2 children and myself to move into our own home.  We had been renting apartments ever since we met in college, anywhere from $800-$1000 per month.  I finally had stable employment, and we were able to scrape together enough money to consider a down payment.  We had about $7k, and with the first time home buyer program in Ontario, that meant we only needed to put 5% down for a home.  We were living in a small town of about 2,500 people, so our selection was pretty limited.  We fell in love with the 2nd or 3rd house we looked at.  It was a 3b/1b bungalow with a huge lot, on a cul-de-sac, in a mature and nice part of the town. Listed price was $120,000, we offered $105,000 based on our real estate agents suggestion, they countered for $110,000, and we accepted.  Small town, our real estate agent is very well respected and has been doing it forever, and I believe was on both sides of the transaction.  

Anyways, even after reading lots of articles about how real estate profits are made when buying not selling, I admit that we were blinded by the excitement of owning our first home, and were emotionally attached to the prospects of fixing it up, and living there.  I do not regret the price we paid, we made many great memories there while our kids were young.

The house was in great structural shape, but needed a top to bottom cosmetic rehab.  All floors were ripped out and replaced, walls and ceilings touched up and repainted, etc.  We also installed a forced air heating/cooling system.  Total rehab costs to make it comfortable we're around $15k.  Other than the HVAC system, my Dad and I did everything together.

Approaching the end of 2013, I pursued a work opportunity to move to South America on a 3 year contract, to open and establish our business there.  This was my dream since the first day working for the company.  I always had a plan to rent houses and build equity, so here was my golden opportunity.  Since my home in SA is covered by the company, I have the chance to free roll with my house back home.  I put out a few ads in the local classified websites, had about 10-15 showings, screened the prospects as best as I could, and picked a nice lady, with 2 younger kids.  $900/month rent, plus utilities.

Crunching the numbers for this deal was not the intention of the post, but my 25 year mortgage at 2.99% 5year, with loan insurance and taxes rolled into my payments, is about $625.  Other expenses such as vacancy, repairs, etc, I have not had to worry about yet, but this was never meant to be an investment from the beginning.. But I'm just happy that it is building equity for me, and is positive cash flowing (so far? Haha)

That's a big enough wall of text for now :)  I'm fired up after listening to a bunch of the podcasts, and I have promised myself to not fall into the "paralysis by analysis" slump.  I hope to learn and give back to this community in the months and years to come.

Best,

Tyler