Income as Full-Time RVers

After quitting my teaching career and moving into our RV as full-timers I needed a source of income. Becoming a landlord gave me a job while allowing for flexibility.

There are several things I considered to select the city for the properties as well as the specific homes we purchased.

Rhyolight LLC is my rental home business. I am the CEO, CFO, and all around manager. Andrew (my husband) is co-owner of course. Although he is mostly along for the ride!

Location

The first step to find the best location was a lot of research. As a person new to real estate as investment I spent close to six months considering the best city. Based on reading a number of online articles, I knew I wanted a location that had a college/university. I also needed a city with a hospital, and different types of businesses/industries.

The rental market I wanted to invest in needed to be a small percentage of the overall housing market. I wanted to purchase a duplex or single family home – and these also needed to be in my price range.

Why colleges and hospitals? It makes the city a positive place to live with educated, healthy and young people in the community. I want to live where there is good healthcare available – so I am guessing my ideal tenants would want the same.

A variety of businesses as employers was another important consideration. As we saw during the Great Recession, communities dependent on one industry lost out on jobs, and the supporting businesses also suffered as a result. If the main employers in town are in the same industry, then the local economy is too dependent on one sector. This could be a big risk to be able to find tenants after such industries close or move away.

The third focus was a small rental market. If I were to purchase a property where 20% of the homes in the area were rentals I would have a lot of competition to find ideal tenants. On the other hand, with only 5% or less rental properties in a city, I could have a number of applicants for my property.

Finally, the location had to be a place we would enjoy visiting once or twice a year. As a landlord I have to be able to get to the properties for inspections, to show the homes to prospective tenants and do basic maintenance and repairs.

Hello, Reno!

Reno was the perfect place! In 2017 the Reno area was rebuilding in a diversified way after the Great Recession demolished this funky biggest small town. The local government was focused on bringing in technology firms, call centers, Amazon, and Tesla. The University of Nevada, Reno is here as well as Renown (a huge medical facility and hospital). Also, Reno has the benefit of being a city with some great breweries, restaurants, and casinos.  In 45 minutes residents can be at Lake Tahoe, and ski resorts.

The rental market in 2017 was only 3% of the housing market and single family homes were in our price range. It certainly didn’t hurt that the company Andrew works for also has two locations in Reno. So, it was a place we had to visit every year anyway.

Next, I began researching and learning about LLCs, and the laws about rental properties in Nevada. I’m not going to go into detail about this other than to say I hired a lawyer to set up Rhyolight LLC. I read books and articles on laws and taxes. An accountant is paid by my business to file taxes each year. This is because the regulations change often and I want to pay my share of taxes without over paying.

The Rentals

The best part of my new business was searching to find the single family homes we eventually purchased.

Houses that were a little rough around the edges were ideal. That way I could do the cleaning, painting, landscaping, etc. on my own to improve the property values.

I used cozy.co which is now apartments.com to advertise and collect applications of possible tenants. Rent and any incidental bills are also collected through the site. It’s all automated and the rent is then directly deposited into the Rhyolight LLC checking accounts. All the bills and taxes related to the properties are automated as well so that there is never a missed payment. I even receive emails from appartments.com to let me know if the tenants paid on time.

The First Property

The first house we purchased was under 1000 square feet and had some updates already completed including repair to the foundation, and a new kitchen. Over the last four years I have installed a new pine fence, automatic garage door opener, hot water tank, HVAC system, and painted the interior and exterior. For our local living convenience I also installed RV parking with a separate fenced entrance, and a 50 amp hookup. This gave us a place to live for a couple weeks while in town taking care of the properties and visiting friends.

The Second Property

The second house is about 1500 square feet and was very, very used and dirty when we agreed to purchase it. We made an offer of $40,000 under asking (it was very yucky looking – but had great bones). It was a lot of back and forth, and eventually we left town and withdrew the offer.

A couple weeks later, the seller’s realtor contacted our realtor and asked us to purchase the house for our original offer price. So we did.

This house received repairs and  improvements with a lot of cleaning, used appliances (much improved over the appliances in the house when we purchased it), new fence, and HVAC system.

Good Investments!

The tenants’ rents pay for the upkeep and improvements of the properties, mortgages, and taxes.

After the first two years of owning the houses I was finally able to begin making income! The LLC is a passthrough so the money that is not used for the business is counted as my income. It’s a great feeling to own something, provide a great home to live in for others, and make money all at the same time!

The risk I took by leaving my career and moving into our RV gave me the flexibility, money, and time to learn to be a landlord. I am so happy that I decided to change direction, learn new skills, and invest in real estate to create my income!