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Our First Rental Property: A Year In Review

May 29, 2018
AUTHOR: Emilie
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Making a decision to buy a home is not one to be taken lightly. When we bought our first home, we new immediately that it would also be our first rental property. As a military family, we knew that Fayetteville, North Carolina is not where we would be forever, but we still wanted to buy.

Because we went into the home-buying process looking for a rental property, not a forever home, we were able to make smart business decisions that have, in the last year, proven themselves.

The first year that we were at Fort Bragg, we rented a townhome in a well-known and highly-regarded subdivision in Raeford, just over the city-line from Fayetteville. This was an amazing place to live. We were spending $895 per month in rent, and utilities were very affordable.

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When we started to seriously look at potential home for our first rental property, we were determined to not let house-fever get the best of our HGTV-loving selves, especially as we saw our peers fall prey to exactly that trap.

Buying a home, whether it’s meant to be your starter residence or your first rental property, can easily become an internal battle between your emotions and your logic. One place to start is the 1% rule. As Paula Pant of Afford Anything explains:

 the One Percent Rule states that the gross monthly rent should be at least one percent of its final price.

  • A property that costs $100,000 should rent for at least $1,000 per month
  • A property that costs $200,000 should rent for at least $2,000 per month
  • A property that costs $300,000 should rent for at least $3,000 per month

With this in mind, we knew that we wanted to be in the $100,000 range for our home. We knew there was a large demand for 1Kish rentals in the Bragg market and, since $1000 is less than the lowest BAH, we would have a large potential pool of renters. The mortgage for a one hundred thousand dollar home is something we could comfortably cover in our regular budget, if we moved to a new duty station and needed to cover the expense in addition to a rent.

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After visiting over a dozen homes, we put in an offer on this beauty as our first rental home. This is what she looked like the week we closed.

This home was beautiful in a way that only a mother could love. The yard had been destroyed by dogs, the renters had put wholes in the walls, and there a thousand cigarette butts littering the property. From our very first walk-through, we had always seen her as a fixer upper. We knew that there were things we were going to want to do to really spiff-her-up, even before we moved in. In retrospect, we had no idea what we were signing up for. There was a huge learning curve, nog just as new homeowners but also with this as our first rental property. We got burned multiple times. However, I’m incredibly grateful for everything we’ve learned along the way.

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Flipping Our First Rental Property

First Rental Property Main Kitchen Area
Main Kitchen Area
First Rental Property Eating Area Near Kitchen Looking Toward Fireplace
Eating Area Near Kitchen Looking Toward Fireplace
First Rental Property Back of Main Kitchen Area
Back of Main Kitchen Area
First Rental Property Living Room Area
Living Room Area
First Rental Property Fire Place in Living Room
Fire Place in Living Room

Open Concept: Knocking Down Walls

When we bought the house, there was a distinct kitchen area and a distinct living area, separated by one long wall. In the above photos, it is a pale green wall in the background of the eating area. You don’t have to be BFFs with Joanna Gaines to know that houses are increasingly trending towards an open concept. We immediately set sights on knocking down this load-bearing wall. This would allow us to have one large entertaining space that flowed from the kitchen right through to the living area.

First Rental Property
Open Concept Entertaining Area

One Flooring Throughout

Given that we were knocking down the wall that separated our laminate-covered living room and our tile-covered kitchen, there was going to be a gap in the floor we’d have to address. We figured this was as good of a time as any to replace the flooring throughout the home. We decided to go with wood-looking ceramic tile (like this one but darker) because it would hold up to the demands of a kitchen and not be ruined by pet nails but allow the house to really flow from area to area. We decided to also extend this continuous flooring into the front bonus room, which we converted to a formal dining room.

First Rental Property Bonus Room- Before
Bonus Room- Before

 

First Rental Property Formal Dining Room
Formal Dining Room

Putting in over 2000 square feet of tile is expensive, so here are some of the cost-cutting measures we took:

  • We demo’ed the existing kitchen tile ourselves. This took a WHOLE weekend and sucked way worse than I ever could have imagined. I wish we had paid someone to do this.
  • We bought all of the tile at once. This allowed us to unlock the “contractor price” at the national chain home improvement store.
  • That same national chain home improvement store also had a 10% military discount they added on top of the contractor price.
  • We bought discount gift cards from Gift Card Granny that helped us save some additional dollars.

If I were to restart this project today, I think I’d consider installing luxury vinyl planks instead. They would be much more cost-efficient than the tile. I never really considered it for our project because I worried it would feel cheap. Where we are currently renting, though, has LVP, and my mind has been changed!

First Rental Property Living Area & Fireplace
Living Area & Fireplace

Painting & Unconventional Trim

We painted the entire house in a blue-green-grey color scheme. We did all of the wall painting ourselves after picking out swatches at the same home improvement store where we bought the flooring. We did not agonize over this, as we knew this would not be a forever home. We wanted neutralish colors that would not be off-putting to potential renters.

First Rental Property Master Bathroom Before
Master Bathroom Before
First Rental Property Master Bathroom After
Master Bathroom After

The most unconventional decision we made was to paint the trim throughout the house black, instead of the on-trend white. Simply put, we wanted to, so we did.

We also painted all of the kitchen cabinets and the cabinets in both bathrooms white from their original wood color. This immediately brightened up the space! White cabinets definitely modernized the home.

First Rental Property Painted Cabinets and Upgraded Appliances
Painted Cabinets and Upgraded Appliances

Upgraded Appliances

We hemmed and hawed over whether or not it was really necessary to upgrade our appliances. The home came with good quality white appliances. The dishwasher worked okay enough and, besides feeling outdated, there really were no issues with the stove or refrigerator. Lucky for us, just as we were agonizing over the decision, we had a parent offer us a stainless steel stove. We took the generous offer and price-watched the other appliances. When they went on sale, we were able to replace all three appliances for little more than $500.

Given our market, it was not necessary, but we felt it would be a worthwhile investment that would help us attract the kind of renter we wanted.

First Rental Property Backyard
Backyard- Before

Outside

I wish I had remembered to make sure that we took “after” pictures of the outside, but we didn’t. D’oh! Next time.

The biggest, and heaviest, project we took on was bullet edging- we added bullet edging around the WHOLE outside of the house. While it was previously in the area between the walkway and the home in front of most of the house, we extended it to the full perimeter, including to the left of the front door, around both sides of the house right up to the fences, and around the back of the house except for where the stairs to the screened-in porch are.

In the back, we also added fill dirt to accommodate for the wash out under the screened in porch before we added the bullet edging to the back. We eliminate the tree in the middle of the yard, the stump near the house, and a couple of other trees at the end of the yard. They weren’t providing any value to the yard and were in inconvenient places.

Out front, we added an American flag to the pole, a light for the flag, and lighting to the walk way. It was only a little bit of effort, but it made a HUGE difference on the visual of the house.

Throughout the landscaping areas, we regrew grass where it had died. C spent a LOT of time outside working on the grass. That’s definitely his wheelhouse. I just watered the grass when asked to. We laid mulch in the bush landscaped areas.

First Rental Property Screened In Porch Before
Screened In Porch Before
First Rental Property Screened in Porch After
Screened in Porch After

The Screened-in Porch

I was so, so, so excited that this home came with a screened-in porch. I spent so much sitting outside in this area. Sometimes working. Sometimes just enjoying the fresh air. Sometimes working out. It was really nice to have this rig at home. Casey and I used it a lot on Saturday and Sunday mornings. I’m bummed that it did not survive the move.

First Rental Property Screened In Porch Before
Screened In Porch Before
First Rental Property Screened In Porch After
Screened In Porch After

 

First Rental Property Master Bedroom Before
Master Bedroom Before
First Rental Property Master Bedroom After
Master Bedroom After

Bedrooms

We feel strongly that bedrooms are meant for sleeping, so we did not do much work there. We did, though, paint the walls and trim and upgrade the outlets and light switches. The home had two bedrooms, in addition to the master, one of which I used as a permanent office.

First Rental Property Bedroom #2 Before
Bedroom #2 Before
First Rental Property Bedroom #2 Before
Bedroom #2 After
First Rental Property Office Before
Office Before
First Rental Property Office After
Office After

Making it Our First Rental Property

When we PCS’ed in late February, we already had a property management company in mind. A friend who had PCS’ed about six months earlier had been using them, so I got to interrogate about her experience with this company before we committed to them. I’m glad that I did because Fayetteville is notorious for poor property management companies.

Many folks, including my friend Elizabeth of The Reluctant Landlord, are a big proponent of self-managing, especially when it’s just your first rental property. We seriously considered it for a while, and while it might be a conversation we consider in the future, it’s not something that would be best for right now. Given our priorities, it was worth the 10% to have someone else managing the home!

As for our first rental property, we moved out at the end of February and had people move in on March 15! The house sat empty for only two weeks, which is extra great when you realize that we didn’t advertise it AT ALL prior to moving out ourselves. We didn’t really want the hassle of dealing with the house and trying to get renters in while we were in the middle of our own PCS. I guess that is one of the luxuries of actually owning the place yourself.

It’s only been a couple of months, but so far so good. We’re really happy with the experience of buying this house, upgrading it while we lived in it, and converting it into a rental home. Sometimes I wonder what’s going on in that house now in a sentimental way because, well, for a year, that was my home.

Then, though, I am quickly reminded that a rental property, whether it’s your first rental property or your last, is a business transaction. All of the upgrades we made were investments in the home, just like the home itself. Many military families end up as as accidental landlords, but this was not accidental. In fact, quite the opposite- it was very, very intentional. This intentionality is a step in the right direction. We hope that is only the first rental property of many in the future.

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Emilie is a data engineer by day and lifestyle blogger by night. A Jersey girl at heart, she is currently living in her fifth home in three years, Savannah, GA with her college sweetheart. She’s learned the hard way that home is wherever the Army sends them. She enjoys eating food, cuddling with her dog, and binge watching HGTV.