Hello everyone! I was sick last week, but life is too busy to sit down for long. The tenant at our rental property chose not to renew the lease and moved out. Now, I am busy preparing the condo for sale. We have owned this room since 2011. It’s been a great rental, but I don’t want to own the property anymore. I prefer to invest in real estate crowdfunding with CrowdStreet. It’s much easier than being a manual landlord.
Also, we plan to move in about 4 years. It will be very stressful and I want to minimize the potential problems. Ending employment now will be one less thing to deal with in the future. Okay, let me tell you a little bit about the history of this rental and all the things I’m fixing.
Condo history
This building consists of 3 identical towers that were built in 1965. The west tower was the tallest building in Portland for about 4 years. That is very good. These buildings and the historic Halprin Open Space Sequence were part of Portland’s first urban renewal project. At that time, the inner cities fell down and the inhabitants moved to new places. This area in the south of the city was a place for Jews and immigrants. It was an easy target. The city condemned 54 blocks for redevelopment and relocated more than 1,500 residents. Here is an aerial view of what the area looked like in 1935.
In 1964, most of the above buildings were destroyed. The picture below is looking north. If you’re familiar with Portland, you can see the old US 99W freeway on the far right of the photo. Traffic was rerouted on I-5 across the river in the 70s and Tom McCall Waterfront Park took its place.
Our buildings went up in 1965. This picture is facing west.
Our neighborhood (circle) was built as apartments and stayed that way until the real estate bubble in 2006. A developer bought the property and renovated it. Two towers were converted to condos in 2006 and 2007. The latter didn’t finish renovations until 2008, but the real estate bubble had burst by then. The last tower was turned into a residential area because there were no buyers in 2008. Many of the units in the previous 2 buildings were sold or turned into short sales.
Purchased in 2011
We lived in a 2 bedroom condo in the east tower from 2008 to 2019. Portland was great back then. It was safe and I enjoyed living there with my family. We had a beautiful view of Mt. Hood and the river. The parks were safe and you could walk around at night without worry. Theater was far and PSU is near. It was fun.
In 2011, we bought a one-bedroom condo in the west tower so my mom could live nearby. However, he didn’t like living alone so he came to live with us. We turned the 1 bedroom into a rental.
We got a great price on the rental condo because it was a short sale. This was in the midst of the financial crisis and the real estate market was struggling. The purchase price was $140,000. It was a significant discount from the previous auction. The condo sold for $240,000 when they finished renovating it in 2006.
Unfortunately, this complex has not seen as much appreciation as other Portland condos. I think it’s because of the age. However, we loved staying there. It’s less noisy than the rest of the city and it’s close to everything. We can walk, bike, or ride almost anywhere. The only major drawback is that we do not have a washer/dryer in our unit. Residents must go downstairs to wash clothes.
In 2011, we rented a 1 bedroom condo for $1,075/month. In 2024, the rent increases to $1,600/month. If our tenant stays, I would raise the rent to $1,700/month this year. The cost has increased significantly since then.
Cash flow for condo rentals in 2024
Hire: $1,600
- HOA: – $565
- Property tax: $334
- Insurance: $30
- Mortgage: $0 (We paid this off in 2019 when we moved. In retrospect, I should have kept the mortgage and invested. The stock market has done very well in the last 5 years.)
Our income was about $670/month. All of these costs go up in 2025 and I will have to raise the rent to help cover them.
Appreciation of values
Portland’s condo market is not good. I think the peak was in 2017. We should have sold then. A few years ago, this city got a bad reputation. I think that depressed the price of the property. Real estate prices have increased significantly in some parts of the US over the past 5 years. Somehow, Portland missed the rising tide.
Anyway, I met with a real estate agent and set the sale price at $215,000. We would still make a profit at that price. I guess I can’t complain.
Prepare for the sale
There are a number of things that need to be fixed before we can put the condo on the market.
- Paint – My last painting was in 2019. A fresh coat of paint always gives a place a nice lift. I am about to finish this work. Only the bathroom remains.
- Change the light fixtures – The seller recommended replacing the old light fixture with new low profile LED fixtures to modernize the area. I made this over the weekend. The new products look great.
- Replace the faucets. The old ones are worn out and look bad. WIP.
- Update the kitchen cabinets – The kitchen cabinets are laminates and some of them are very worn. I’m going to order a wooden spoon to help spice it up a bit. It would be better to change the cabinets, but I don’t think it would be worth it. Cabinets are expensive. WIP.
- New carpet – The old carpet is about 20 years old and dirty. Tenants don’t really take care of the carpets. I cleaned it in 2019 and it didn’t help much. I was busy running around getting quotes. A guy quoted me $2,800. I must look like a field! Home Depot will cost more than that. Anyway, I found a local area and the carpet should be installed soon for about $1,300. WIP.
- Scrub – The tenant is very clean, but the area still needs a little scrubbing. Later…
Wow! Little by little I am going through these activities. Painting is an easy way to freshen up a space and I have done it many times. However, the knees and elbows are not what they used to be. They all hurt after the painting was changed. I’m getting too old for this. Next time, I will pay RB40Jr to do all this work.
Taxes
After selling the condo, I will have to remit some estimated tax. I don’t know how much I’m going to send the IRS, though. The equation is complicated by depreciation. I will make my best guess and send it in. Although, I believe I can reduce the profit by fixing it somewhere else. I need to fix the siding and paint the exterior on the duplex. We need to remodel the bathroom and kitchen as well. Those projects will cover most of the profits from condo rentals. Maybe I don’t need to post an estimated tax after all.
Okay, that’s it for today. If all goes well, I’ll have one less thing to deal with soon. Being a landlord is great, but it’s a big problem in Portland. These days, I invest with CrowdStreet. They are the leading real estate agency and have many commercial projects to choose from. CrowdStreet is great because you can zone out. Portland is a bad market to invest in.
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