Hello there – welcome to another “Landlord Report”. This monthly report will share my experiences as a landlord. The report will show EVERYTHING related to my rental properties and life as a landlord…. This report will actually capture the past two months; I have been busy and could not keep my regular posting schedule.
I will discuss the rents that I collected, mortgage payments, and other ‘landlord items’. Other topics may include repairs, finding new tenants and any other items that might randomly pop up. The report will also share how much money I made and the amount of time (hours) it took. I want to show the world being a landlord is a wonderful thing.
I also manage ~50 properties for other people, but this report will not share information on my clients or their properties.
Throughout this process I aim to be as transparent as possible. Being a landlord and owning rental property is a wonderful way to earn (mostly) passive income. Please feel free to contact me with any questions – happy to provide insight.
The Landlord Report – May & June 2017
The past few months were very busy; my day job and side hustle took up a lot of my time. I was also busy finalizing rental property #3 which is now fully leased.
Oh, and I have a few minor (major?) repairs to report! While I love a perfect month, which is a month with no repairs and expenses, this is not always the case. I want you to fully understand life as a landlord.
The past two months have included the following – raccoons, termites, chainsaws and bed bugs – oh my! But never fear, these are actually all small problems and easy fixes. The chain saw was the best part!
The table below outlines all my income and expenses for the past two months:
As you can see, I actually lost money in May and June. However, this is a bit misleading. Rental Property #3 was not rented in May; the June rent is pro rated for only 5 days. Never the less, I did have some modest expenses and stories from the past two months to share with you.
Rental Property #1
Raccoons! Bed bugs! Say it ain’t so… I will not go, turn the lights off carry me home (ok, maybe listening to Blink-182 while
writing blogging is not a good idea).
Raccoons! My new least favorite animal. This issue occurred last winter and I had a small raccoon family living in the attic. The annoying creatures have been removed and the attic sealed up months ago.
So why am I talking about this now? The raccoons tore up the attic space. More specifically, the duct work for my HVAC system was damaged. Thankfully, this was a relatively effortless fix.
I called my go to HVAC repair guy (a must have member of your team; I should write a post on this at some point). Two afternoons of labor and $310 later the HVAC system showed no signs of our furry visitors.
Total time for HVAC: 30 minutes
Bed bugs! Wow, so one of the tenants is a bit of a slob. Bed bugs are no joke and a result of personal cleanliness (or lack their of). Bed bugs also bread quickly which can lead to infestations if the problem goes untreated. My pest guy treated the house the following day for $650. This is an expense that I paid but the tenant will reimburse me for since lack of cleanliness caused the problem.
Total time for bed bugs: 15 minutes
The tenants paid their rent of $4,600 ($2,300 x 2) in full and on time. Rent collection took a total of 40 minutes (20 minutes per month).
Rental Property #1 Summary
In summary, rental property #1 – lost $196.48 and I spent about 1 hour and 20 minutes my time the past two moths. My mortgage debt dropped by $1,489.49 over the past two months from my monthly payments. When considering principal reduction, I came out ahead $1,293.01
Rental Property #2
Chainsaw time! The property had a tree that my tenants and I wanted removed. I went to Home Depot to rent a chainsaw but their rental was broken. Not wanting to delay the project or leave the store empty handed, I bought a chainsaw, gloves and industrial bags.
The total expense was $142.12 and I now have a chainsaw for future
projects fun. This also took about an hour and half of my time but was a fun project on a sunny afternoon. Who doesn’t love power tools?
Also, one of the bathrooms sinks experienced slow draining. This is a common occurance that will happen over time. Thankfully, this repair only took 5 minutes. All I needed to do was disconnect the drain stopper and clean out some hair that was clogging the drain…. YUCK!
The tenants paid their rent of $8,000 ($4,000 x 2) in full and on time. Rent collection required me walking downstairs to get my morning cup of coffee.
Rental Property #2 Summary
In summary, rental property #2 – earned $3,040.74**. I spent maybe 10 minutes of my time depositing the checks with my smart phone. As a result, I earned $3,040.74 for 1 hour and 45 minutes of effort!!! On an hourly basis, this was $1,737.56/hour. May and June 2017 were great months for rental property #2. Does that beat your day job?
My mortgage debt decreased $1,416.19 over the past two months. When factoring paying down my debt, rental property #2 made me $4,456.93.
**I also live in the house and get paid to live here. Pretty sweet right? House Hacking is awesome.
Rental Property #3
TERMITES!!!! We will get to that in a moment.
Ah yes, rental property #3. Renters moved in the last week of June and I collected a partial month of rent along with a security deposit and July’s rent from both tenants.
The termite swarm showed up out of the blue. I had a termite inspection conducted prior to buying the property; there were no signs of termites.
Well, one day I walked into unit #2 and there were dead termites all over the bathroom and one of the bedrooms. My heart skipped a beat, sank and panic sunk in.
This was a first for me; I have never encountered a termite problem before. Thankfully, this problem was solved with a simple phone call to my pest guy.
The termite remediation costs $950; the fee covered treatment for both units and the entire property. I lost a few nights of sleep wondering if the house was going to collapse; it won’t.
In summary, rental property #3 – lost $3,591.16. This figure is a bit misleading since the property was only rented for 5 of 61 days. Never the less, I DID lose money. The termite remediation was a curve ball and unexpected. However, I anticipated the property being vacant for a few months while I renovated and leased the building. Going forward, rental property #3 will provide quality cash flow.
Rental Property #3’s mortgage debt decreased $$794.77 over the past two months. When factoring paying down my debt, I lost $2,796.39
In summary, I spent 3 hours and 5 minutes of my time maintaining my portfolio of rental properties. Rental property #3 is FINALLY stabilized and will provide income on a go forward. This is a huge relief since rental property #3 also killed my cash flow the past two months. I am comfortable with these upfront costs since the rental property will provide great passive income in the future.
In May and June, my rental properties lost me $752.90 with consumed over three hours of my time. BUT!!! My mortgage debt decreased $3,700.45 over the past two months. Factoring in repayment of debt, on paper, I still came out ahead $2,947.55