Profit as a landlord in Austin, TX
For Texas, you should read everything on this site: Austin Tenants’ Council/Tenant-Landlord Fact Sheets
We started renting out our first house 11 years ago, when we bought a new larger house. For most of those early years we were still paying a mortgage and probably loosing money. I have not tried to go back and calculate what our probably profit or loss was for those years. About 4-5 years ago we were able to pay off the mortgage due to an inheritance. During most of those early years we were probably not covering costs (mortgage, insurance, repairs, depreciation, much less anything for our time). AFTER the mortgage was paid off, we were clearing around $3-4k/year after deducting those expenses, not considering all of the money we had tied up in the property), and that was not setting anything aside to replace the roof and HVAC or other major components when they wore out in the future.
My tenants moved out last month and I'm fixing up the place to sell it, getting out of the landlord business. I've spent $11k so far just trying to return the house to a condition similar to what it was when we first started renting it out. $11K is not enough, there are still numerous items that will not be in as good a condition as they were before we started renting it out. I will probably still make a profit on this property, primarily because property values have sky rocketed here in Austin, TX. But the profit won't be because we were landlords. The profit will be because we owned the property this long and were fortunate that the property values in the community have escalated. We probably barely broke even as landlords.
Being a landlord is a risky business, you should NOT venture into it without FULLY considering what ALL of the costs will be.
We started renting out our first house 11 years ago, when we bought a new larger house. For most of those early years we were still paying a mortgage and probably loosing money. I have not tried to go back and calculate what our probably profit or loss was for those years. About 4-5 years ago we were able to pay off the mortgage due to an inheritance. During most of those early years we were probably not covering costs (mortgage, insurance, repairs, depreciation, much less anything for our time). AFTER the mortgage was paid off, we were clearing around $3-4k/year after deducting those expenses, not considering all of the money we had tied up in the property), and that was not setting anything aside to replace the roof and HVAC or other major components when they wore out in the future.
My tenants moved out last month and I'm fixing up the place to sell it, getting out of the landlord business. I've spent $11k so far just trying to return the house to a condition similar to what it was when we first started renting it out. $11K is not enough, there are still numerous items that will not be in as good a condition as they were before we started renting it out. I will probably still make a profit on this property, primarily because property values have sky rocketed here in Austin, TX. But the profit won't be because we were landlords. The profit will be because we owned the property this long and were fortunate that the property values in the community have escalated. We probably barely broke even as landlords.
Being a landlord is a risky business, you should NOT venture into it without FULLY considering what ALL of the costs will be.
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