Rental Property #1: Tenant Lease Extended for 2 Years!

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Wow, can you believe it’s already been 1 full year since I rented out Rental Property #1? Time sure does fly! I must say, it’s been a very pleasant experience so far.

My tenant pays rent on time, takes care of the place, and doesn’t ping me on a regular basis. This is just the way I like it. In return, I’ve always done my best to address concerns in a timely matter. Seems like a relationship that is mutually beneficial. As such, I decided not to increase rent this year. Rent will stay the same at $2090/month. Actually, I gave my tenant the option of extending the lease for 1 year, or 2 years, their choice.

Since they have really enjoyed living there so far, they opted to extended the lease 2 years at the same rate. So, my “dividend growth” will be 0% for the next two years, and three years overall. However, at this stage in the game, my primary focus is to achieve 100% occupancy for all my properties. The passive income is already stellar (for the Bay Area), so I’m not really in a rush to hike up rent. A vacancy for even one month would be brutal, so I’m going to try and avoid that as best I can.

I still have my full time job, so the passive income is allowed to snowball. With three rental properties + W2 income, hopefully I can shorten the time it takes to save up for the next downpayment. I’m aiming for another acquisition in October or November… Interest rates are rising rapidly so I gotta get back into the game soon! 🙂

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September 2013 Cash FlowFI FighterDan SmithDividend investing MartinLeigh Recent comment authors
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Leigh
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I wish some of my previous apartments would have let me sign a two year lease – they hiked rates up so much while I was living there. Glad things are going well with rental #1!

Dividend investing Martin
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I think you are doing the right thing not increasing the rent. As you said, you want to have it occupied and secured, once you gain some equity and cash cushion you can do it in case the tenant decides not to extend the rent you will be able to go over it. I like your approach on that.

Dan Smith
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Really enjoying following your journey. As a future hopeful landlord, I’m enjoying the work you’re doing and writing about. Thanks and keep it up!

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[…] to perform and meet expectations. In a previous post, I mentioned that the tenant decided to extend the lease for an additional 2 years. The original rent was $2090/month. After agreeing to the terms, I actually learned that the tenant […]

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