For me, financial independence would mean a diversified portfolio that includes my IRA’s, passive income from (5 to 10) rental properties, and a savings account with a substantial emergency fund PLUS at least one years’ worth of living expenses reserved.
Where to start? Well, I’ve been contributing to my IRA (I rolled my 401(k) into an IRA with Vanguard last year – follow this link to read that post), and savings account, so, the next step, given my goals, would be: Rental Property Investment. Call me crazy, but I do not think it is wise to be a rental property investor without ever having owned a property before. Thus, I set out to kill two birds with one stone:
Buy a primary residence that can one day become an investment/rental property.
I don’t feel comfortable simply trusting social security will support me 30 years from now; therefore, I want to increase the number of ways I make money. If social security runs out of money, I will survive, and hopefully thrive, with passive income from rental properties!
Follow this link to read the article called “Here’s where most Americans are really getting their retirement income” by Lorie Konish of CNBC
Ideally, I was looking for a small, low-maintenance & move-in ready condo that belonged to an association that permitted long-term rental (leases of 1 year or more). Specifically, I did not want an AirBnB because I don’t want my time tied down in turnovers.
I found this condo that was move-in ready, recently painted, and had new carpets, listed for under 100k, and jumped on it. I wrote an offer on December 26th and it was accepted that same day! Once provided the association documents, I confirmed that this condominium complex allows their property owners to rent their units out for a minimum of 1 year…for now. However, when that time comes, I will have to re-confirm this policy, as well as attain all the required state and local licenses. After the inspection and appraisal contingencies were met, there was a final walk-thru of the property, and we set the closing date for Monday, February 3rd.
This past Monday, I was getting ready to head to the closing table and started feeling queasy. Before I left my apartment, I became violently ill. The entire closing, I was shaking like a leaf! I am laughing now, but that day was foggy. I laughed, I cried… It was great and awful, simultaneously.
This whole investment planning endeavor is not for the weak of heart. My body had a visceral reaction to the weight of home ownership. I definitely can better empathize with my buyers, knowing how intimidating a feat this is, even for the strong willed.
In five or so years, I’ll be buying my next residence, and converting my first home into my first investment property. For now? It’s tax time AND I’m moving AND the market is picking up. Bring it on Wisconsin February! 🙂
❤ always, Annie Z.
This post is for documentary purposes only. This is not financial advice. Before making any investment decisions: consult a financial adviser