Earlier this year I bought an apartment as an investment. Honestly, I still can’t believe it. If you’d asked me few years ago I would have called you crazy and how! However, perspective changes and once you get the taste of real estate it’s difficult to stop lol.
My earlier plan was to rent out the apartment by April this year but due to the second wave I couldn’t. I had started some renovation work which couldn’t be completed as construction workers left the state to avoid sufferings like last year. Cannot blame them. We finally finished the renovation work only by start of this month. It didn’t hurt me not getting the rent and having a huge ass EMI. Yet, it hurt me mentally since the entire idea of the investment was to build equity quickly.
I write this journal with good news.
The goddamn apartment is finally rented. The tenant has transferred the deposit, we’ve signed the rental agreement and they will be moving in by Aug 1st. I didn’t put much effort in looking for a tenant and instead hired a broker on recommendation of a friend. The idea was to have this investment truly be passive income. They took care of fixing up the apartments as well which really helped. Of course this means that the first rent goes to the broker. I am extremely happy with the experience, the broker is a partner broker of the builder and they exclusively deal with the builder. Even with the pandemic scare still going on they were able to get decent rent.
In coming weeks, I need to move some of my equipments I kept at the apartment. It will be a fun day trip to drive and do some physical labour.
If you’ve been following my blog you would know that I started this blog as a travel blog back when I had a passive income of about $800/month which I was earning by running ads on some of the websites I owned. When I decided to join a job, I didn’t have the time to run those websites and the passive income dwindled. I tried to outsource the SEO to consultants but it didn’t really help and eventually the income dwindled. In fact to this day this is the bio of my twitter handle.
It’s great to be back to making some passive income. I still won’t be making as much as I did back when I was running a few lucrative websites but it’s still a start. I don’t want to create a real estate empire, that’s a bit ambitious for my pay grade.
When I announced here about the purchase, I briefly discussed about the desire to quickly pay off the loan. I could do that now. However, due to certain circumstances I won’t be aggressively paying off the loan. The rent agreed is INR 26,000 per month, which I will save and not invest. I might need a big cash cushion pretty soon. I will discuss these circumstances in another blog post.
Mortgage remaining is INR 70,41,945.
It’s quite annoying to see how your payments doesn’t go towards principal during initial days. I’ve now spent thousands of hours trying to figure out if I repay the principal by a few lakhs the amount of much interest I am saving. It’s a fun fantasy.
Stock Market experiment
I’m quite surprised how consistent I have been with trading. I’ve consistently added the profits to the Nasdaq 100 fund. The goal is getting ever so closer. I love it. I will soon have to think about what to do once I have achieved the goal of funding INR 1L in this fund which is always a good problem to have. When I started this goal, the idea was to consistently trade and figure out strategies that are working for me. I am still experimenting. I’ve been trying momentum trading since last weeks. However, due to Nifty miserably falling down following Dow Jones, the number of trades I make have been low. I still don’t want to short stocks as I’m still not confident enough.
For this month, I’ve maintained my base to INR 1.4L and haven’t added any new funding due to circumstances I discussed above.
I contemplated whether I should remove the additional cushion I am saving from my baristaFI numbers, I decided against it. The circumstances might or might not lead to heavy expenses. In case I wouldn’t need the expenses, I will most likely add them towards investment and hence it makes sense to add them towards baristaFI achievement.
April 2021: INR -30,59,460
June 2021: INR -20,63,716
July 2021: INR -18,94,716
Please note that none of this should be taken as advice to buy. You should contact your financial advisor for such decisions if you’re unsure of it. I’m only sharing my thought process on this blog.