Last month brought a few changes for us. New tenants. Kiddo growth spurt. New case study. And some other stuff.
Numbers first. May side income was $2,401, down -11% year over year.
What happened in May?
1. Kiddo finally sleeping through the night
From her birthday until now, kiddo has doubled in weight. Getting heavy. She’s also stretched out a few inches. When she was born, I could hold her like a honeydew. Now she’s like a pillow-sized bag of sand.
Still, she’s pretty cute.
Her first six weeks were hard. Round-the-clock maintenance, feedings, diapers, burping. Upside down hours. Explosive poop. Fussy sleep habits. She needed lots of wiggles and noise to fall asleep, especially at night.
She got much better in May, though. At least in terms of sleep. Now, under very particular circumstances – if we do everything right during the day – she can sleep up to seven hours at night in a single go. It’s heaven when that happens.
She also started smiling and giggling whenever she sees us. Like magic, it makes it all worth it.
There are new challenges, of course. She gets really fussy now when she eats, which didn’t happen before. She drools outta control. She spits up milk – a lot. Also didn’t happen before.
We’re learning as we go but slowly getting the hang of things.
2. Tenant turnover
As I wrote in April, one of our tenants moved out and, although it took a few weeks, we finally got that unit re-rented out.
Another tenant is moving out early June, and luckily we were able to rent out that unit right away, so there won’t even be a single day’s gap on that one, which is awesome.
We just renewed the lease for a third tenant, so they’re set for another year.
Our fourth tenant, a senior couple, is planning to move sometime over the coming year because they’re moving into senior housing. They’re on a waiting list now, so it’s unclear when they’ll move. I’m just hoping it’s not during the winter doldrums when it’s somewhat more challenging to rent out. We need to remodel their unit before the next tenant comes in.
Over the last few weeks, we’ve seen reports that the Bay Area housing market is starting noticeably to slow down. In particular, the multi-family apartment market. There’s been a noticeable shift in terms of:
- More price reductions
- More canceled and withdrawn listings
- More stale listings (>60 days)
- Fewer offers per listing
- Fewer offers over list price
- Credits being issued to buyers
For sure, local economy fundamentals are strong. Inventory remains low. Job growth, especially in tech, is extremely robust. Population growth is still healthy (even though there is also an increase in Bay Area residents calling it quits and moving inland). These factors lend continued support to surrounding apartment values.
Other factors may be causing the market to soften:
- Rising interest rates – rates are up by a full point since we bought our 4-plex just eight months ago
- Flattening rents – rents have softened in the last couple quarters, and strong-credit renters usually have multiple options (credits are sometimes being given just to get them in the door)
- Prospect of rent control – Bay Area rents remain high, and many (especially lower wage) renters are organizing to petition for rent control measures (e.g., Costa/Hawking repeal measure) to be put on the ballot this November; these are guaranteed to face ferocious resistance from landlord and real estate association lobbying groups
- New construction – there’s lots of new apartment building construction going up (at least where we live); most are luxury buildings commanding premium prices, so they appeal to a particular segment of the market (strong credit, high wage earners who don’t mind shelling out), but with these renters soaked up there are fewer good renters left for existing property owners
- Fatigue – buyers might simply be tired of prices going up for eight consecutive years, and it’s possible prices have hit the max of what buyers are willing to pay
3. New case study
In May, I wrote a new case study, the final installment of my house hacking series.
The post is about how to find great tenants, which is critical to building real estate wealth. The post talks about:
- 4 simple but critical steps to finding great tenants
- Why 4-plexes are so effective at building wealth
- The most important personal lessons we learned throughout our 4-plex project
Be sure to check it out and leave a comment with your feedback!
4. Growing traffic
In May, I joined a bunch of Pinterest group boards related to personal finance and FIRE. Also strategically pinned a bunch of stuff to different boards, and I redid the cover art for all my old posts to make them stand out better on Pinterest.
During the month, Pinterest changed the counting method for monthly viewers, which almost certainly impacted the reach of our distribution. We ended the month with 12k monthly viewers.
Also in May, I watched a bunch of email list building video replays from the list building school I joined a long way back. Finally got some time to do that. My strategy is to watch them while bottle feeding kiddo, so I can do double time. Definitely learning a thing or two, including tips on building Pinterest engagement which has been insightful even though I work at Pinterest!
1. New case study
Next month, will crank out another case study. It’s about life insurance, which has become suddenly important now that kiddo is with us.
As I wrote before, there are decent explainer articles online that explain the different types of life insurance. But there are also important analytical details mostly missing from these articles. My new case study will cover these insights which are important when it comes to actually calculating how much life insurance to buy.
There are also future case study ideas I’m thinking about. One is about setting up trusts. Another about setting up a will. Both are things I started thinking seriously about even before kiddo came out. (Studying for the bar exam greatly helped refresh my memory of these subjects.)
Finally, also still planning a case study on new tax bill strategies, but it’s likely that one will come late year when I write about next year’s new tax brackets.
2. New job
I’m starting a new job early next month. One big reason is to be closer to kiddo.
Can’t say too much about it yet, but it seems by far like the most interesting role I will have had in my career so far. Am greatly looking forward to it. Will share more details in a few months!
3. Grow traffic
Bring on June!