Income-Producing Property Case Studies

Single-Family Residence with ADU in Bellingham

This home has a garage that was converted to an ADU Studio. The studio rents for $875 per month due to its location and proximity to Fairhaven. The main house includes 3 bedrooms and rents for $2,900 per month. These living spaces on their own create a positive net operating income of over $1,100 per month which includes the mortgage.

The owners are going to be installing a secure shed in the front of the property (see the red dot) which will allow for three bike lockers that are each 36” wide by 48” deep and 82”tall. It will cost approximately $3,000 to build. Each spot can be rented for $50 per month. This locker will pay for itself in less than two years. And remember, that $150 will also increase modestly per year.

Furthermore, since this property is within a quick walk to both a bus and train line, it will appeal to those interested in alternative transportation!

Short-Term Vacation Rental in Methow Valley

This 1200 square foot, 2 bedroom property outside of Mazama in a community of vacation cabins was purchased in 2021 for $525,000. At the time of purchase, net operating income was lower than expected due to how the space was being managed and there was opportunity to do some cosmetic updates geared towards the vacation rental market and take updated photos. With new management also in place with advanced rental booking technology as well as a cleaning team that didn’t require a full day to turn over, this cabin is exceeding business expectations.

The overall goal with this rental was to have it pay for itself from a cash flow perspective upon purchase, have ongoing rental rate increases build the cash flow over time, and build equity through appreciation. The owners’ goal was to have a great place to vacation several times per year and build wealth. This vacation home delivers.

This is a four-season rental (with the exception of March and the beginning of April which is “mud” season) that not only appeals to those wanting to recreate in the Methow Valley which is home to a robust summer trail system and includes the largest Nordic ski trail system in the United States, but because it is located in a community of other vacation rentals, the whole community appeals to company retreats, local weddings, and family gatherings.