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  • 2nd US Property Purchase

    During my recent trip to Fort Myers I was fortunate enough to be able to acquire a new property while I was over there. Given I was only in Fort Myers for 8 days, I did not really expect to get lucky enough to get a property in such a short time frame. My main goal was to just get a first hand feel for the area and a bit more knowledge about the town so that down the line I would have more of an idea of what areas to look for properties and hopefully gain a bit more of an understanding as a whole of the town of Fort Myers.

    While I was there I would have looked at approximately 12 properties, and countless others online through the listings, all of them had some sort of flaw, either they were too far away from town, too much damage had been done to the property, the area was not reliable, property was over priced, and the list seemed to go on. It was very difficult to find a property that I was comfortable with. I am always careful to make sure I do not get desperate in this sort of situation, it is easy to lose patience waiting for the right property and in the end just take any property that is available for fear of missing out. Unfortunately this is a bad trap to fall into, it is important to wait for the right property to come along.

    I may have rushed into this recent property purchase a bit too much, but I just had a good feel about the property, it already had an existing tenant and they were desperate to be able to stay there, they were paying good rent (I will get into the figures later) and the area I was comfortable with. I went with my property manager Judith and she could first hand say she was happy with the area given she used to live within a stone’s throw away from this place. I met the tenant (at least one of them) and she seemed very nice, I could tell she had been taking good care of the property while she has been there (over 12 months). All in all I only looked at the property for about 20 minutes while walking through the place, I talked to the lady for about another 15 minutes and that was enough to sell me on the property, I soon became the new owner of 1115 Lovely Lane, North Fort Myers.

    Details on the property –

    2 Bedroom and 2 Bathroom (initially it was 3 bedroom, but a wall had been removed between two to make 1 larger bedroom)

    Price I paid was $79,900 (to be honest it was a bit higher than I was looking for, but if the value is there then no point missing out)

    Monthly rent is currently $800 per month.

    The property also had a pool out the back with a deck for an entertaining area (did not see this on any other property, was surprised given how common it is in Australia).

     

    There were some slight complications with the closing of the sale, basically the banks were screwing me around (more on that in another post) but in the end it all worked out well. I was a bit lucky that the listing agent worked for the same company as my property agent, so they were able to hold on to the property a bit easier for our benefit.

    All in all I was very happy, the whole deal seemed to go a lot smoother than our first property. From offer to closing I believe it was about 2 weeks in total, and it would have been a lot less had the banks not messed us around.


  • Renovations in Huntdale

    Over the last couple of weeks, we have had quite an interesting moments with our property on Huntdale Street in Florida. After losing our first tenant, the property was left vacant for about six weeks, it was getting pretty disappointing and our worst fears seemed to be coming true. We were always worried that our property would simply remain vacant for months, even years and not provide us the income we desired.We received an email from our property manager on an early Sunday morning after another disappointing day of prospective tenants looking at our property. She basically listed a few items that needed to be rectified to improve the profile of the property. All of the recommendations were simple and cheap, basically just repaint some of the worn areas in the house, repair some doors, put up some covers on the AC unit and a few other items like that. It was only going to cost us about $600 for everything, so we figured it would be worth the investment. Not only would it most likely allow us to get a tenant a lot quicker than normal, there is also the possibility of receiving a higher rental return, not to mention the higher value of the property itself. All in all it was a good decision to provide the necessary renovations to the property.

    So after reading this email, we received another one from our property manager, not more than two hours after the first one, saying she had some prospective tenants who wanted to move in on the 1st November, and have already covered the moving costs to get into the property. So everything sounded great for us, however they did mention there were some requirements that we had to cover as the landlord to get these people into our property. Not only were we required to rectify the items our property manager had covered previously, but also a couple of additional requirements. The main one being was to replace the carpet in the living room and one of the bedrooms with tiles. If you have read our previous posts, you will see that this was brought up as an option earlier on in the piece, when we were first renovating the property, the carpet was worn and well past it’s prime so we did look at replacing with tiles, but in the end we just stuck with giving it a good clean.

    Cleaning the carpet was apparently good enough for the first tenant we had, although they did have a couple complaints about it over the couple of months they were there. But we knew not to make the same mistake twice, and this time we immediately agreed to get the tiles into the property. Not only will it make the property immediately more appealing, it will also be easier to maintain in the future so it should allow us to save costs in the long run. Also again there will be the increased capital value of the property immediately.

    After all the renovations, the final cost was only $1,600, I could not believe it was so cheap for the amount of work that was done, but it only took a week to perform the changes, and by looking at the photos, the place really does look amazing. And what is most important, the tenant is very happy with the changes.

    So in the space of a couple hours, we were looking very disheartened and disappointed, and that soon turned to almost jubilation and now we have a really good feeling that this tenant will be just what we are looking for, a nice reliable, and most importantly, long term tenant.

    Disclaimer: By viewing this website, you acknowledge that it is for informational purposes only and does not imply any contractual agreement, promises of returns or legal expertise. All investors should consult with legal representation and appropriate accountants before making any investment and should ensure that individual due diligence is done. Any information provided here is for educational purposes only and should not be taken as financial advice.


  • The End Of Our First Tenant

    We got the news the other day that our tenant at our first US property has left. They had signed a 12 month lease, and yet they have vacated the property after little over 3 months.

    According to our property manager, the husband’s grandmother had fallen sick, and the family moved to a different state to be by her side and help her out. It is unfortunate for us because not only have we lost our tenant that had so far been quite good to us, they also left in such a hurry, that the property was left with a lot of rubbish and a lot of cleaning required. I was hoping to be able to get some photos of the state the property was left in, because one person’s definition of trashed could be another person’s definition of perfectly acceptable.

    Regardless of the condition of the property, we have had cleaners go in and fix up the property, and it is back on the market and hopefully we will be able to find a new tenant in the coming weeks. The tenant did pay a bond of one month’s rent, so this should more than cover the cleaning bill required, but there are still other costs that leave us out of pocket.

    Firstly, the tenant had not paid rent for the month of September, and they had left halfway through, so we are out of pocket a couple weeks’ rent there. Also, the property management we have, charge a fee of one month’s rent for finding a new tenant.

    Sometimes there is a benefit of a tenant leaving in that you can justify in raising the rent for the next tenant, which can sometimes be a little difficult with an existing tenant. But unfortunately, in this situation, the market has not really moved significantly enough and it looks like we will have to stick with aiming to get a tenant in there paying $700 per month.

    So at the end of the day, this is the the end of our first tenant, I am sure it could have gone a lot worse but also it could have gone a lot better. Hopefully our next one will be able to stay on to at least fulfil the end of the lease they sign on for.


  • Huntdale Street – Lehigh Acres PHOTOS

    Our property on Huntdale Street in Lehigh Acres, Florida was our first property.

    Click here for a map to the location – LINK

    See below for some photos of the property so you can get an idea of what $44,000 can buy you in this area.

    We had to spend approximately $4,000 on renovations to get it up to rentable condition. Not much was required however, just some general cleaning, a new door was required for one room and painting of most of the rooms was needed. Please see below for some photos after the renovations were complete.


  • 1st Purchase!

    28th April 2012

    So today was the day we have been waiting for the best part of 2 years ago. We finally landed our first property in the US. Like I said we started this adventure about 2 years ago, it has been filled with a lot of ups and downs, not to mention a lot of frustrations. But in the end, we have learnt so much on or journey. We do not plan on this being our only property in the US, so we hope that this information will allow us to streamline the process for future deals. Also we have a lot of things set up (LLC, Property Agent, Property Management) for this first sale, so we hope to be able to start looking for a new property very soon.

    This property we were able to purchase in cash, the total price was $44,000, so we were fortunate enough to between us have that much saved up. As we have exhausted a significant amount of our savings, we will hope to obtain finance for the next purchase, however we will need to establish some sort of credit rating prior to being able to do this.

    Over the next few weeks we will outline all of the steps we went through to purchase this property, hopefully it will allow people who follow in our footsteps to be able to streamline their efforts and make it easier for themselves. I believe our next one will be very difficult too however, with the added requirement of needing to obtain finance for the property.

    Once everything is settled, we will also provide all the expenses we have incurred in order to obtain the property initially, and also to maintain the property successfully, once we have some history with this property, hopefully we will provide an accurate record for everyone.

    But for now, it is definitely time to celebrate, along the way I had doubts that this would simply never happen, that it was all too difficult, that there were simply too many obstacles in our way that were there to stop us, but eventually we were able to prevail and now we are looking forward to our next step in our investing journey.