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What’s happening with our home in Eau Claire

220616_rainyday_housefront 240226_ECUpdate_backyardThis is our house – we think it's so cute! Sadly we had to have the backyard tree removed last year though.

Last Friday was the two year anniversary of having our offer accepted on our second home in Eau Claire, Wisconsin – even before we had ever been to Eau Claire! Here's the full story about why we purchased a second home including how we afforded to buy a second home. The short story is climate change and by using a big chunk of savings and additional funds from a well-timed cash-out refinance of our Arizona home.

Now that we've owned a second home for a while I wanted to share an update on the house and lessons learned so far. On Instagram, I asked what questions you have and received several – thank you!

Someone asked me if we have any regrets, which seems like a great place to start. We have none! In fact, the more time that goes by I feel even more grateful that we took the plunge when we did. Having our home in Eau Claire continues to feel like not only a solid financial investment but an investment for our future, whether we need to live there because of water scarcity or even if we just spend summers there eventually.

Here are the answers to other questions that were asked...


Are you using a property management company?

We do now have a property management company so they do the heavy lifting of managing the home and the tenants. In terms of managing the property manager and handling all the administration of having a rental property, I've been managing all those tasks.

I consider our rental house management part of my current work portfolio along with writing and podcasting. My dad spent his career as a realtor and property manager including for his own rental properties so the real estate world is pretty familiar to me. Plus I have my dad's wise advice just a phone call away. I've found that I really enjoy managing everything having to do with our second home so perhaps real estate is in my genes!

As I'll describe in a minute, there have been some stressful tenant situations that I've had to manage on my own and then with a property manager. But I've found that even with the ups and downs I have really enjoyed the work of having an investment property. I've loved learning that about myself! In fact, I would love to work towards being able to afford another rental property in Eau Claire at some point.


Is the home currently rented out? What has the tenant situation been like?

We spent a month at our house in June of 2022, getting to know the house and Eau Claire. Since we left, the house has been rented out by two different long-term tenants. Initially we did not hire a property manager because the house was in great shape and we had service professionals on call to handle any home maintenance. I thought, perhaps naively, that having tenants would be pretty straight-forward (and really should have been!). But unfortunately our first tenants ended up being quite stressful such as consistently paying rent very late and similar challenges. To the point that I was worried we would have to go through an eviction process just months into a rental agreement. Ack!

So I found myself suddenly scrambling to hire a local property manager. Thankfully I connected with a local company who I've been happy with overall. They were able to take over all management of a difficult situation and I was so grateful! Our first tenant ended up finishing their one-year lease and ultimately never missed a payment. So while the situation was stressful it did not impact us financially.

It was also great to have a property manager in place to find new tenants because they took care of everything: advertising, showing the house, and setting up a lease with new tenants. Plus they take care of all communication with tenants, handling rent payments, and home maintenance (which incurs additional fees). I'm happy to share that now we have great, stress-free tenants in the home.

My advice to anyone else considering owning a second home far away would be to hire a property management company. I've found their fee of 7% of the monthly rent payment (which is pretty standard) to be well worth everything the property manager takes care of and for the peace of mind.

One more note on being a landlord. I keep in mind our role in the housing market where finding affordable housing, particularly for renters, is becoming a serious challenge. (Two great interviews on this topic: one, two.) In between tenants we did raise the rent on our home after consulting with our property manager about market values. I told them that when they were reviewing tenants that we could consider lowering the rent for any service professionals: teachers, nurses, police officers, fire fighters, etc. who might not be able to otherwise afford the rent. This situation did not come up but I was genuine in my offer. We will also continue to be very thoughtful about whether we raise the rent. At this time I think the rent is a win-win for us and our tenants that I don't see changing.


Does your house make money? How long did you have to save to afford a second home?

In terms of finances, our second home has been a great investment so far. The home has gained thousands of dollars of value since we purchased it (according to Zillow anyway) which is great to see. We continue to see the city of Eau Claire develop and look strong economically which is great for our home's value. And the home cash flows which means that the rent payment is above our mortgage payment. So most months (if no maintenance is done) we make as much as a few hundred dollars on top of what we need to pay in mortgage.

Even with a cash flow rental property, the house is not an additional source of income for us that funds our everyday lives. This is very much a long-term investment. We set up a separate bank account for the Eau Claire house and keep everything separate from the rest of our finances.

There have been a few maintenance projects during the past year that have used up just about all the money the house made. We had to have a huge tree removed in the backyard because it was mostly dead after years of beetle infestation. We were so sad about losing the tree and the $2,100 cost of removal. We've also proactively replaced the water heater (it was literally the same age as me, installed in December 1983 so almost 40 years old when we had it replaced), replaced the microwave, and resurfaced the front and back steps. So far we have not done any renovating or updating beyond the projects I mentioned but we definitely have big dreams for those in the future.

Someone asked me how long we saved to pay for a second home. There are two parts to that answer. One, we saved for years and years to build up thousands of dollars in our Vanguard index fund investment account. We tapped some of that money for the home purchase. But we also did a cash-out refinance in 2021 and pulled out money we had in equity out of our Arizona home. Interest rates were ridiculously low and our home had gained a lot of value since we purchased it for $200,000 in 2009. We were able to refinance our current home and get a very low interest rate while keeping an affordable monthly payment on a new 20-year mortgage for our Arizona home, plus take out a big chunk of cash. Then within a year we invested a lot of the money we withdrew into a second home at a reasonable interest rate of 4% (just before interest rates took off). So we got very lucky with the timing and benefited from that. At the same time, we were also ready to take advantage of the real estate market when it was in our favor.


Do you plan to relocate to Eau Claire permanently? What are your long-term plans for the house?

At this time we have no plans to relocate to Eau Claire permanently. Chris has a great job here, we have a wonderful community of family and friends, and love the day to day of our life. I could see us moving to Eau Claire permanently if we start seeing serious signs of a coming water shortage here in Arizona. It's tricky because some of the reports about water here make it seem like we are already seeing those signs! While other reports assure us that Arizona has planned well for its water future. What we do know is that we have so much peace of mind now that we have a climate change "plan B."

Our long-term plans for the house are to eventually stop renting the house out to long-term tenants so that we can stay in the house during the summers. To realize this situation we need to work towards a couple of things: 1) saving up to furnish the home which I estimate will cost between $20,000 and $30,000, and 2) either renting the home out short term when we aren't there, through AirBnB or to traveling nurses, or put ourselves in the financial situation where we can afford two mortgages.

Our timeline is to be able to save up and furnish the home within the next three to five years. Once we are no longer paying for preschool (a year and a half from now) and for our car (two years from now) we'll be able to save up even faster. To make the transition we'd probably plan to spend a summer in Eau Claire, furnish the house, and set it up for short-term rentals. I still need to learn more about the short-term rental market, especially for nurses, to understand what that financial situation could be like.


When do you plan to be in Eau Claire again?

We aren't sure but we hope within the year! Depending on how our finances are looking towards the end of the summer we might be able to fit in a trip to Eau Claire over fall break. It's a long road trip for us (three days) or five plane tickets plus a rental car to travel there so it's not a quick or inexpensive trip. Plus right now our house is rented out so we'd need to stay elsewhere. But we are eager to get back as soon as we can.

In the meantime, we've enjoyed staying up to date with EC happenings by following local businesses on Instagram and by subscribing to the print edition of the Volume One magazine. The monthly publication highlights city happenings and businesses and whenever we get a new issue Chris and I remark to each other about all the cool stuff happening in Eau Claire.


I hope that answers your questions about our second home in Eau Claire. If you have others please let me know and I'd be happy to answer.