November is the first full month when our first rental property generates income. My hope is that the monthly rental incomes will be pretty standard (no unexpected maintenance, rent is paid on time etc.), so probably I won’t post such overviews every month. Still, this first full month is interesting as it will set the standard net income going forward.
Last month was extraordinary as the rental agreement did not start on the 1st, furthermore there were a lot of extra fees in relation to the advertisement and tenant selection. Consequently, the net income was very low (EUR 42.97). You can read the overview of the first month in a separate post.
In November, the rental fee of 850 euro has been fully paid in time. The expenses were the following:
- EUR 51.43 property management fee (5% of the rent plus 21% VAT)
- EUR 454.75 mortgage payment. This includes both the principal and interest on the extra mortgage, plus the increased interest on the existing mortgage on our house due to the financing conditions.
- EUR 100.05 monthly HOA (VvE) costs
The total costs are adding up to 606.23 euro, which means EUR 243.77 net rental income.
This looks much better than the previous one, and as I said I hope that this will be the standard during the upcoming months.
Can this be less? Of course, in case of possible repairs, if the tenant doesn’t pay, moves out, etc.
Can this be more? The rental fee won’t be increased for a year at least. The property management fee and the HOA costs are also given (I’m not expecting the latter one to be changed for a while).
The mortgage payment can be decreased though, by paying extra towards the principal, or otherwise decrease our mortgage/home value ratio below 85%. This would mean further property price increase.
I definitely want to get below 85% again. This would mean more safety, furthermore around 250 euro less mortgage payment per month. It could potentially double our net rental income. Soon I will disclose how we are going to achieve it, so stay tuned!
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Disclaimer: This post or any other information on the site is not intended to be and does not constitute financial advice or any other advice. I am solely sharing my idea, plan and progress on financial independence and early retirement.