My Income Property: Two Years Later

August 25, 2017 Posted by Tyler Cruz

Two years ago, I received the keys to my first income property. It has also been exactly 2 years since my last update on it. This post will get you caught up to speed with what went on during those 2 years since my last post and also on Arizona Air BNB Company.

First off, I will tell you right now that purchasing an income property was the best business decision I have ever made, by far and all thanks to a Business Recovery and Insolvency Advice expert who helped me out of debt. This update will not touch on the appreciation or profits though, as I have that planned for a separate upcoming post. So, while you may (and should) feel some pity for me due to some of my recent depressing blog posts, this is one of the few things that have actually made me a significant amount of money. Then when buying a new property, it’s essential to complete a snagging survey as there are always lots of errors and defects which are found in the survey so will always save you a lot of money and hassle.

And I absolutely love everything about property investment too. I love the math and analyzing of numbers. I love looking at properties. I love the negotiation and purchasing process. I love improving properties. I just love real estate. And so it’s frustrating that I’m not making money anymore as there’s nothing I’d love more than to go out and purchase another income property. Instead of seeking investors for Votesy, I should have been seeking investors for a share of my property holding company instead (where I could actually give out real shares, too).

Market Explosion

While I won’t be talking about the appreciation in this post, I have no problem sharing the rent increase.

The market here has skyrocketed since I purchased my property, which in turn allowed me to increase my rents as well. When I acquired the property, it was bringing in $1,650 a month in rent. It is now bringing in $1,900 – a 15% increase over 2 years. If that trend continues (I expect it to slow down slightly, but probably still very high at 10%), in 4 years that would be $2,500 a month. If you need help managing the finances of your real estate business, or any other business for that matter, a business financial management firm could be your best bet. If you want need some help to handle your finances as well, you must want to check out,Β  the official blog from James Kawas.

In addition, I will be increasing the lower unit’s rent either at the end of this month, or else when the current lease expires in 6-months, by around $100-$150, so the rental income is nearly at $2,000+ already (which, by the way, if you plugged that number into the equation above, in 4 years the rent would be $2,900+).

Vacancy is also low at 0% (although I did have to deal with an eviction and 1 month of non-payment). The rental market here is crazy, and if my property manager put the unit up for availability, she’d get like 40 inquiries in 24 hours.

But the money is not in the rent. The cashflow essentially just covers all costs. This has always been a holding property. The real value is in the property itself through appreciation. But more on that in an upcoming post.

Crazy Lower Tenant

At times it seems like I’m throwing money away by using a property manager, but at other times such as from the story that follows, I am so grateful that I did.

The lower tenant that came with the purchase (we didn’t choose her, in other words), ended up being a tenant from hell:

Didn’t Take Care of the Unit

The carpet was in poor shape after she left, and a professional cleaning didn’t improve it much. Fortunately, the carpet is only a small portion of the unit and the rest is tile. There was also some minor damage to the drywall and paint. All in all, this was not dramatic though, to be honest.

Snuck a Pet In

She got a puppy without asking permission or notifying us (which was part of the reason the carpet was in bad shape).

Crazy Shenanigans

She was a druggie and according to the upstairs neighbours, people would go banging on her door in the middle of the night screaming at her and spit on her face.


She stole stuff from the shed, as well as the upper unit’s belongings such as some tools and a PS3 and would pawn it for money. When the upper units confronted her about it (to which she always denied), the next day the PS3 was magically replaced with an Xbox.

Late Payments and Eviction

Later on, she would start giving late payments, and we’d (and by we I mean my property manager) have to shake her down to make sure she paid. Eventually we had to evict her, and this process did not go well: she was being very dramatic and sending my property manager long e-mails saying how she’d be out on the street, etc. She even went so far as to threaten or insinuate suicide of we proceeded with the eviction.

Fortunately, I was only out 1 month’s rent and she was replaced with an awesome tenant (one that we picked!)

So yeah – I’m definitely happy I didn’t have to deal directly with any of that crap. Property manager all the way.

Lots of Improvements and Fixes

I’m the dream landlord πŸ™‚ The first thing I did when I obtained the property was start going down the checklist of things from the inspector’s long report, and addressing them one by one. I ended up addressing about 85% of the things mentioned in the report, only ignoring the super minor stuff that wasn’t important.

I’m recently having issues with the plumbing system and need expert plumbing services, for this we hired a plumber in Cupertino, CAΒ for professional plumbing services. I was looking for more info on the best plumbing and I had a lot of improvements done to the property, including: an emergency drain cleaning, getting a new hot water tank (the old one was broken so we had it replaced through services like water heater installation in Edmonds, WA), added plumbing through experts like this Anaheim plumbing company and the best pedestal sump pump I could find, bought a new stove (old one broke) upstairs, had broken lights fixed, and a bunch of minor things fixed by a handyman the property manager has on call. For the best plumbing services, read about Sarkinen Plumbing so you can call their attention if you need their great service. I also contacted the best plumbing company by visiting Don’t forget about the well pump maintenance as well. If you need well pump services, you may contact a specialist in well and pump service in Snohomish, WA. And if you need professional pipe relining services, you might want to consider hiring a professional in pipe relining services in Mill Creek, WA.

I was notified of a “water leak” from my property manager that the upstairs tenants had contacted her about. I was terrified until I saw the photo and learned the source of the “leak” – it was rainy season and the back door simply needed new weather stripping – whew πŸ™‚

The dishwasher that was installed. They didn’t have one in black, and I wish they had filled or covered that gap to the left… oh well.

Broken Fence

One of the very few things I didn’t address from the inspection report – a couple of rotten fence post supports – ended up biting me in the ass, as one entire side of the backyard fence blew down on a windy day.

Hello, neighbour!

It required digging and new cement supports and posts to be put in place. Fortunately, the next door neighbour was an awesome lady and split the costs with me 50/50, and we got it done properly and quickly for either $1,000 or $1,200 (I can’t remember) total. We were able to re-use most of the wood which cut the costs. The fence is strong now and should not pose me any more problems for as long as I own the property (at least that side of the fence anyway ;)).


Overall, things have gone pretty well despite a fair bit happening during the first two years. I expect things to dramatically quieten down now though, since I’ve taken care of all the repairs and improvements to the place and now have new tenants in place.

While I have a property manager, I still have my hand in the property as I still have to make decisions at the end of the day.

Stay tuned for my upcoming post where I talk purely about the numbers and appreciation of my income investment. You won’t want to miss it.

If you enjoyed this post, please consider leaving a comment below, subscribing to my RSS feed, or following me on Twitter.
Posted: August 25th, 2017 under Income Properties  

11 Responses to “My Income Property: Two Years Later”

  1. Dave says:

    Did you ever consider selling the income property when you stopped making money? Do you address this in a future post?

    I mean, I know that you want to keep this property, but you also talked about having to make money to keep the heat on. Did you ever contemplate selling this property? I imagine that would take care of your $ worries for a number of years while you contemplated your next move..

    • Tyler Cruz says:

      Yes, I definitely could have sold it and actually have been good for a _very_ long time, but since I have no real job, this is the last thing I wanted and want to do.

      So, I tried EVERYTHING I could to keep it, and so far I’ve managed to not have to resort to selling it. When you read my follow-up post to this one, you will see why…

  2. mike says:

    Glad to hear this was a good decision for you and that it worked out! With real estate I read stories about some people loving it and some hating it. I think having a property management company can do wonders for the people who hate it.. but I’m guessing not everyone can afford to hire one. I would also hire one since I know nothing about repairs. I imagine most affiliate marketers aren’t very good handymen.

    I’m looking forward to your next post with more information about the numbers. Especially curious about how much you put as a down payment, how long the mortgage is for, etc.

    • Tyler Cruz says:

      I think if you can’t afford to hire a property manager then you purchased a bad income property. My buy strategy is all about buy and hold – that is, I’m in it for the appreciation not the cash flow, yet I can still afford to hire a property management company.

      Even if you’re a handyman, it can still be worthwhile to use a property management company. They take care of EVERYTHING for you. Getting tenants, responding to tenants issues, dealing with evictions, regularly checking up on the place, handling payments and accounting, etc.

  3. Scott says:

    Inheriting tenants can often be the worst part of acquiring a new property (and usually why the old landlord is selling because they got lazy and let a bad tenant stay too long). The screening process for a good tenant is probably the most critical aspect of being a successful landlord. I’ve seen so many people hate being a property owner and sell their investment because they didn’t put the right rules and parameters in place during the screening process and the renter absolutely destroyed the place!

    Our neighbors rented their house out to a single guy next to us while they moved to a different city for about 4yrs and NEVER once stopped by to check on the place. Well, over time he let a buddy move in + a large dog (without approval from the owner). They ended up completely wrecking the house.. floors, mold on walls, yard was a mess/over grown, a tree branch landed on the roof during a storm and put a whole in it and there was major water damage (didn’t inform the landlord until weeks after).

    The owners had just renovated a few years before renting it out… now they evicted the guy and had to completely GUT the place down to the studs, replace the entire roof and basically replace everything. They were done being a landlord and ended up selling the home… too bad because if they had taken care of it and been proactive they would be looking at HUGE appreciation gains over the last few years AND monthly increase in rents.

    In a hot rental market you can be very selective with tenants and have all the leverage.

    Kudos to you Tyler for being thorough and diligent with the investment property so far. I think people assume it’s a passive business even with a property management in place but you’ll always need to have a hand in the process and just use common sense most of the time.

    Did you pull $$ out of the property from the appreciation to help pay the bills?

    • Tyler Cruz says:

      I did not, but I have a very good post all about the appreciation gains in an upcoming post.

      • Scott says:

        I am just south of you in the Seattle area and we have seen 30%+ appreciation since 2015 and in some areas over 100% appreciation in the last 5yrs.

        I know Vancouver BC prices are so insane people are migrating to Nanaimo and the Island for affordable living which is driving up the prices there as well.

        Same thing is happening down here with the cities surrounding Seattle.

        I did stumble across a few of your new ventures.. replacing the dogs with the new guests is much more profitable and less stress πŸ™‚

        Real estate is a beautiful thing especially in a hot market!

  4. Robert says:

    Tyler, thanks a lot for your honest posts!

  5. Sujeet says:

    I’ve been down this road before.. Smart move getting a property manager to handle everything, as it’s quite a headache otherwise.

    I didn’t see you mention it, but how much money are you making each month from the property after you pay the mortgage, property manager, and other misc expenses?


Leave a Reply