I’ve always had this idea of being financially independent since I started working and realized that a typical 9 to 5 job wasn’t for me. When I considered ways to create passive income, real estate always came to mind.
Back when the economy was stable, with no crises or bubbles, and lending was easy, I used to think I’d buy a flat, earn a 10% return on it, and let the rent cover the mortgage. After a couple of years, I imagined I’d go back to the bank, prove my success as a landlady, borrow more money, and repeat the process. By 40, I envisioned owning a dozen properties and living off the rental income. Seemed simple!
However, reality hit when I graduated with just a small savings account. Since the bank wouldn’t lend me any money, I bought a tiny flat through a property website and charged a modest rent, which was far from enough to cover my living expenses. Renting out the flat came with its own set of issues, like tenants missing rent payments for months.
Still, the numbers were decent. I bought the flat for $25,000 and rented it out for $350 per month, which included $100 for condo fees and maintenance. After nine years, I sold it for $50,000.
I always felt I could have done much more if I had access to credit. Without a stable income or significant savings to make another outright purchase, I knew I needed a different approach to reach my goal. So I got a job as an IT consultant. Although I didn’t enjoy the office environment, I appreciated the paycheck and the progress it allowed me towards my goal. After 18 months, I approached the bank for a mortgage. It was touch-and-go since my income wasn’t substantial, and property prices in the area were high. But thanks to falling interest rates, I managed to get approved for a mortgage on a new three-bedroom flat.
My boyfriend moved in with me and helped with the utilities, but he didn’t have a stable job. So, we decided to rent out one room while keeping two for ourselves—one for an office/closet/guestroom and the actual bedroom. After a few months, we realized we hardly used the second room and were missing out on potential rental income.
In our area, a room rents for $750 or more, which is significant extra money that could enhance our monthly budget. So, we decided to rent out the room. We started with a short-term rental to an exchange student to see how it would go. During that month, we didn’t miss the extra room and appreciated the additional cash.
Eventually, I moved out of the flat, and now all three rooms are rented out. I’ve been fortunate so far, with the biggest issue being tenants not getting along, but I’ve never had a tenant who didn’t pay their rent.
Renting out my flat felt natural since I was used to living with roommates or in small spaces alone. It was also a plus being the landlady because I had more control over house matters and could resolve conflicts or remove tenants if necessary—something I wished I could have done with previous roommates.
