Hey everyone! I got sick last week, but life is too busy to stay down long. The tenant of our rental apartment decided not to extend the rental agreement and moved out. Now I am busy preparing the apartment for sale. We have owned this apartment since 2011. It was a good rent, but I don't want to be a landlord anymore. I would rather invest in real estate crowdfunding with Crowdstreet. It is much easier than being a practical landlord.
We also plan to move in about 4 years. It will be very stressful and I want to minimize potential problems. Eliminating the rent now will be one thing less in the future that you can deal with. Okay, let me tell you a bit about the history of this rental apartment and everything I fix.
Condominium history
This complex has 3 almost identical towers that were built in 1965. The West Tower has been the highest building in Portland for about 4 years. This is pretty neat. These buildings and the historic Halprin Open Space sequence were part of the first urban renewal project in Portland. At that time, the inner cities fell into decline and the residents moved to the new suburbs. This area south of the city center was a Jewish and immigrant. It was an easy goal. The city condemned 54 blocks for the renovation and laid more than 1,500 inhabitants. Here is an aerial photo of what the area looked like in 1935.
Most of the buildings mentioned above were destroyed by 1964. This picture below looks north. If you are familiar with Portland, you can see the old US 99W Freeway on the right edge of the picture. The traffic was redirected to the I-5 over the river in the 70s and Tom McCall Waterfront Park replaced it.
Our buildings rose in 1965. This picture looks west.
Our complex (incorporated) was built as apartments and remained until the real estate bubble in 2006. A developer bought the complex and renovated it. In 2006 and 2007, two towers were converted into condominiums. The last one ended the renovation in 2008, but the real estate bubble had burst until then. The last tower was converted into an apartment complex because nobody bought in 2008. Many units in the two previous buildings were sealed off or converted into empty sales.
Bought in 2011
From 2008 to 2019 we lived in an apartment with 2 bedrooms in the East Tower. Portland was great at the time. It was certain and I enjoyed living there with my family. We had a great view of Mt. Hood and the river. The parks were safe and they could walk around at night without worrying. The theater was a block away and Psu is right next door. It was great.
In 2011 we bought an apartment with a bedroom in the west tower so that my mother could live nearby. However, she didn't live alone, so she moved in with us. We converted the 1 bedroom into a rent.
We got a pretty good price for the rental apartment because it was an empty sale. This was in the middle of the financial crisis and the real estate market fought. The purchase price was 140,000 US dollars. It was a significant discount from the previous sale. The apartment was sold for $ 240,000 when it ended the renovation in 2006.
Unfortunately, this complex has not seen as much appreciation as the other condominiums in Portland. I think it is because of the age. However, we loved living there. It is less loud than the rest of the city center and is close to everything. We can go for a walk, drive or take the trams with us almost anywhere. The only big disadvantage is that we don't have a washing machine/dryer in our unit. The residents have to go to the basement to wash laundry.
In 2011 we rented the apartment 1 bedroom for $ 1,075/month. The rent has increased to $ 1,600/month by 2024. If our tenant gets in, I would have increased the rent to $ 1,700/month this year. Since then, the expenses have increased significantly.
Cashflow 2024 for rental apartments
Rent: $ 1,600
- HOA: – $ 565
- Property tax: -$ 334
- Insurance: -$ 30
- Mortgage: $ 0 (we paid this out in 2019 when we moved. In retrospect, I should have kept the mortgage and invest the money. The stock market has been doing so well in the past 5 years.)
Our cash flow was about 670 US dollars/month. All of these expenses rise in 2025 and I would have to increase the rent to pay for it.
Price increase
Portland Condo Market is not good. I think the highlight was probably in 2017. We should have sold at the time. The city has received a bad reputation in recent years. I think that depressed the real estate price. The real estate award has increased enormously in other parts of the United States in the past 5 years. Somehow Portland missed the rising flood.
However, I met with a real estate agent and temporarily set the sales price to 215,000 US dollars. We would still make a win at this price. I think I can't complain.
Preparation for sale
There are a number of things to repair before we bring the apartment onto the market.
- Paint – The last time I painted was 2019. A fresh color always gives the place a nice elevator. I'm almost finished with this task. Only the bathroom remains.
- Replace luminaires -The real estate agent recommended that the old light be replaced with new LED LED LED lights in order to modernize the place a little. I did that over the weekend. The new games look great.
- Replace the taps. The old ones are worn out and look terrible. Wip.
- Refresh the kitchen cupboards – The kitchen cupboards are laminate and some of them are quite worn out. I will order a wood conditioner to bubble it up a bit. It would be better to replace the cupboards, but I don't think it's worth it. Cupboards are expensive. Wip.
- New carpet – The old carpet is almost 20 years old and confused. Tenants don't really take care of carpets. I had it damped in 2019 and it didn't help much. I was busy walking around and getting quotations. A man quoted me $ 2,800. I have to look like a fool! Home Depot would be cheaper than that. Anyway, I found a local place and the carpet should soon be installed for around 1,300 US dollars. Wip.
- Scrub – The tenant has cleaned up pretty well, but the place still needs to scrub a little. Later…
Phew! I'm slowly going through these tasks. Painting is an easy way to refresh the place and I have often done it. However, my knees and elbows weren't what they used to be. They are all after a shift in painting. I'm getting too old for this stuff. Next time I pay RB40JR to do all of these tasks.
Steer
After we sold the condominium, I would have to send an estimated tax. However, I have no idea how much I should send the IRS. The calculation is quite complex due to depreciation. I will make my best guess and send it. Although I think I can compensate for the profit with maintenance on the other property. I have to repair the siding and paint the exterior on the duplex. We also have to convert the bathroom and the kitchen. These projects will compensate for most of the profit from the rental apartment. Maybe I don't have to send an estimated tax.
Okay, that's it for today. If everything goes well, I will soon have a little less to do. Being a landlord is good, but it is too much trouble in Portland. Nowadays I invest with me Crowdstreet. You are the leading company in real estate crowdfunding and have many commercial projects to choose from. Crowdstreet is great because they can diversify geographically. Portland is a terrible market in which you can invest.
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Passive income is the key to early retirement. This year Joe is investing in commercial real estate with crowdstreet. You have many projects in the USA, so take a look at them!
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