Rental Property Ups and Downs


four plex rental

This is year three of rental property ownership for the Eyes on the Dollar family, and wow, what a year it’s been. We went from having one easy commercial building and one single family home to multi-property ownership after buying a very outdated fourplex at the end of last year. Here’s a recap of our rental property ups and downs for the year.

FourPlex Mania

building a kitchen

The earlier part of the year was extremely frustrating and expensive from the landlord perspective. You can read about our renovation experience, but to summarize, we took a property with three apartments (two decent and one crappy) and made it into four nice apartments. We also turned over four tenants during the process.

I would be lying if I said I didn’t worry about spending thousands of dollars at a time when no rental income was coming in. It also would be false to say that I love the city building inspector. He let us know two weeks before our final inspection that we’d have to replace the entire water line to the property at a cost of about $4,000 to get our certificate of occupancy. He is off the Christmas card list!

Finally Making Money

I did know that if we could stay the course, our vision would come to fruition, and I was right. Since June, our


fourplex has all four units rented and brings in almost $3,000 per month.

We took one month of rent and installed a sprinkler system to make the yard very low maintenance. Tenants usually could care less if the lawn is brown or full of weeds! Sure we’ve had some other repairs and expenses that have popped up, but I feel pretty confident that the unit should pay for itself at this point, including the cost of renovation. We didn’t spend any out of pocket money for the construction, choosing to use a HELOC instead. I don’t like the idea of more debt, but I do like the idea of tenants paying our mortgage and remodeling costs.

Rental Income Portfolio

being a commercial landlordOur other rentals are still humming along. The commercial building is occupied by my former optometry practice, and I see no changes in the near or distant future. We had a pretty low cost year compared to 2014 when the entire HVAC system was replaced. The only repair expenses were for gutter cleaning and some roof repair for around $1500. Currently the commercial rental loses a little money every month because we have a 6 year mortgage with a high payment. The good news is that we only have four years left before it’s paid off!

Our other little rental house turned over its tenant earlier in the year, but affordable single family houses for rent are scarce in our area. There was new tenant within a week. We’ve had less than $300 in repair expenses for the house this year.

In months when we have no repairs, out cash flow looks like this.

FourPlex: $2975 rent- $1700 expenses= $1275 profit

Single Family Home: $780 rent-$357 expenses=$423 profit

Commercial Building: $3324 rent-$3239 expenses= -$15 loss

Another nice thing to consider is that our rent will continue to increase while mortgage payments will stay the same until they are gone.

Things That Make Rental Property Manageable

Managing rental properties can be a full time job. Some tenants won’t call until the whole place is underwater while others call if the refrigerator door won’t close on it’s own without having to touch it (yes, that really happened). Fortunately, you don’t have to go nuts if you have the right systems in place.

We use property management and highly recommend it. Jim and I are out making money from the things we do best. Fixing refrigerators is not one of them. Yes, managers do take percentage of profit, but I don’t think we could fill vacancies or keep tenants as happy as our managers do at the moment.

Once we retire, my hope is take on a more active roll in managing our rentals. That doesn’t mean we won’t be efficient in doing so. I plan to add property management software, like Property Matrix, that will allow us to manage tenants through mobile aps or by using the cloud when we travel. Having the ability to manage leases, screen tenants, and manage rental income and expenses on the go is a must. I’m not sure how people did without current technology.

We will also have our own team of people ready to do repairs or maintenance we aren’t able to do by ourselves. Again, this does take a portion of profits, but if you choose rentals that cash flow well, it shouldn’t be an issue.

Investing Rental Income Wisely

Right now, all the profit goes back into our rental purchase/repair fund, which was heavily depleted last year after buying the fourplex. Once we hit our target goal, we’ll start paying more toward the mortgages. With all of our expenses this year, I believe we might also get a tax refund that will go toward these goals as well.

We don’t plan on buying any new rentals until we have at least one or two paid off, but adding more is in the master plan. Owning rental property will hopefully fund our early retirement dreams and keep our nest egg in place for a long time.

Are you able to see the big picture in the middle off an expensive process? What do you think are the hardest and easiest parts of owning rental property? 


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  1. Thanks this was a really enlightening article. We would like to invest in some property in the next couple of years and it’s good to know the ups and downs of the process. It seems that you need to a lot of legwork before actually signing on the dotted line. The thing that appeals to me most about rental property is the ability to leverage your mortgage. The fact that you can increase rents while keeping the mortgage payment the same is incredible.

    1. If you are in it for the long haul, there is almost no way you won’t make money unless you pay way too much from the beginning.

  2. We have had ups and downs with our rental property, mostly due to the fact we purchased it as our first home and then ended up moving. Since our place wasn’t purchased with an investment mindset, we haven’t really been able to make a profit. For now, we are so happy to have reliable tenants who pay the rent on time. Their rent just covers the mortgage (with insurance and property taxes) so we’re pretty much breaking even after we pay our property management company. It can be frustrating at times, but we’re content to just let someone else pay for the property and look forward to potential income in the future.

  3. We don’t own any rental properties but if we did, I would use a property management company too. Like you, Chris and I are busy earning money at we do best and fixing things isn’t what we do best. I’d rather pay someone to manage the property well so tenants want to stay. Those look to be solid investments that will continue to pay dividends for years to come.

  4. I think the fourplex will be such a massive win for you guys long-term. We currently only rent out our basement apartment, but we are very content with that being our only rental for the next 6-8 years. Our plan is to save all of our stock purchase money and use it for a down payment on our next house. We’ll then rent out our current house, which we will update over the next 6-8 years so that it is as attractive a rental as possible while also being as low-maintenance as possible.

    We will definitely use a rental management company when we rent this house. I don’t mind it right now with a tenant in the same building as us, but once we move I want to have it be as passive an investment as possible. I see us using a combination of rental income and dividend income in retirement, hopefully allowing us to avoid having to diminish our investments to fund retirement.

    1. That sounds like an excellent plan. Our rentals are sometimes hands on, but once renovation is done, they are pretty passive.

  5. Excellent Post! Mrs. DisIndebted and I have been looking at buying a fourplex as a strategy to get us out of debt. We were initially talking about buying a single family home for the two of us, as we are recently married. However, now we are of the mind that we can continue to deal with apartment life so long as someone is paying the mortgage for us. In a decent fourplex situation, we can live in one apartment and rent out the other three. The net-net is that we live for free and even make a profit that can be used to help fuel our debt repayment. Obviously, there is work involved and there are potentially costly hazards lurking – but we are confident we can find the right property. Looking forward to more rental property posts from you. Ours will begin soon, so feel free to follow along with our first rental investment.

    1. Best of luck with your search. We didn’t even consider rentals until we were had no consumer debt. They can be very expensive in the beginning, but if you find the right one, it could certainly work out.

    1. I think I would truly lose it if someone complained to me about the refrigerator door not closing on its own. I did’t even know they were supposed to do that.

  6. I am a big fan of having property managers, especially since we have out of town properties. We still do a lot of our maintenance, but it’s worth it to have someone else take care of showing properties, screening tenants and collecting rent.

    1. You would have to have a manager if you lived out of town. If we do end up traveling for an extended period of time, our property manager becomes that much more important.

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