I am currently worth €246451.22 (this is 36.78% of my first goal of €670K).
Happy new year folks!
Appreciation. Appreciation. Appreciation. Three times appreciation and its not a typo!
Being almost done renovating (and spending many dollars towards) RP#3, I figured it would be better to appraise it. As the appraisal company charges a cost basis + a fee for each additional property, I appraised the three of them. I think it actually makes sense to do this at the end of every year.
Bank appraisals in Portugal are typically not dependent on the state of the market. I mean, one appraisal will likely come out at approximately the same amount regardless the market is up or down. This time, I asked a specialized company to appraise my properties, thus getting an approximate market value in the current market.
As you can see, I grew my net worth by more than 100k this month. It’s not magic. It’s Real Estate. 🙂 Of course that these valuations make much more sense to me; However, I sort of wanted to keep the low valuations in my books, until I cashed out…
I claim that I will be able to retire off of €670k because I am great at finding deep value deals, which means very high cap rates. I am not specialized in renting out a property for €1000/mo when it usually rents out for €500/mo. Instead, I am specialized at renting it out at €450/mo, but buying it at 50k, when in fact it is worth 100k. I simply buy (and bought) all properties on sale.
I am also happy with my online income this month, as I passed the $1000 mark. 🙂
As for downsides, I am running out of cash, cash, cash. Lots of it spent towards renovating RP#3 (I will send a complete newsletter on the renovation of RP#3, so subscribe this blog if you want to have access to it), which I absolutely under estimated (should I knew this, I would never had prepaid RP#2’s mortgage). I actually cringe if I think about how much cash I’ve invested on that property. I actually planned to have 10k on P2P loans by the end of 2016, but I only have 3.5k at this point. Plus, and more importantly, I will use my monthly savings in the next 3 months towards the renovation of RP#3, as I estimate it will cost me about 8k more.
Due to the extent of the renovation works, I was not able to rent out any of the units of this building yet either. I hope to rent out three units starting from February 1st.
Another downside is that the tenants of RP#1 are leaving by the end of April, i.e. after 13 months. After April 1st, which is when I move to Portugal again, I will look for new tenants. A month should be perfectly enough to find tenants as the rental demand is currently very high.
Due to the very high amount of money I’ve spent on RP#3, I also decided to put RP#4 on hold.
Next month, I hope that renovation works on RP#3 are over, I save aggressively towards the renovation of RP#3 and I make at least $500 online.
Ben