So it appears that this became the norm and i’m doing the goals for 2021 also in February like last year.
For this year there is a scenario which will have a big play in our personal finances. We would like to start the renovation on the rental property in March and hopefully they will last until October (8 months). The goal would be that on my November update i would be talking about the new tenants now living there 🙂
How will this impact our goal setting? Lets see.
Financials
Savings rate at 18%
Last year we had 31% savings rate, slightly above our target of 30%. As i previously mentioned this year we expect to save ~500€ monthly. This would account for ~18% which is a target we are confortable on achieving. I’m also counting on our savings to go back to old values in November and December once the rental pays for itself.
Rental Units
After a few changes the plan will be to have 3x1B and a 4B duplex. Plan is to have it ready to be rented in the end of October. If earlier, better!
Increase networth in 10%
If things go as planned there is a significant equity gain from the renovation. After renovations the bank is calculating the rental building to be worth 585k. Well..after some easy search nearby we can quickly find out that market value is at least 700k. If we add the rental valuation method for a 5% cap rate (on that area, Lisbon is between 4%-6%) income of 3k monthly (36k anual) we would have 720k.
After some calculations i got to the number of 34% networth increase. Nonetheless, i want to be conservative so i will maintain the 10% increase. Which is already an awesome number.
Starting a company and having revenue of at least 10k
Here i will be keeping the same goal. I was able to achieve 34% of this goal last year and i will try my best to achieve the 10k mark. Time will tell if i’m succesfull. It won’t be for the lack of trying!
Non-Financial
Remodel the farm houses
Even if its not a full revamp (that would cost ~80k) i would at least want to have there running water and electricity.
Finalize maintenance on the building we currently live
Our current place needs some maintenance namely the facade (which already started). I’m going to leave this objective here as well.
Create network of real estate professionals
Something i noticed while doing this investment is that i have an almost non-existent network of real estate professionals. That worked fine for buying but not for a big Reno like the one we are currently. This means i want to get at least the following good contacts:
- Real estate investors (2)
- Property managers (1)
- Architects (2)
- “Do-it-all” (2)
- Eletrical
- Water
- Plumber
- Specialties (eg. Water, HAVAC, Eletrical, etc) (1)
Those are not written in stone but as you can see i want to increase my network dramatically since i think i will need those professionals for this or next deals.