Hello there – welcome to the first Landlord Report. This monthly report will share my experiences as a landlord. The report will show EVERYTHING related to my rental properties….
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 is a wonderful way to earn (mostly) passive income. Please feel free to contact me with any questions – happy to provide insight.
Landlord Report – March 2017
This past month was much busier than a normal month. Never the less, the work load was very manageable. I closed on my new rental property and managed multiple contractors in preparation of renters (hint: this is the big reason why it was a busy month).
Let’s dive into this month on a property by property basis.
My property portfolio (2 now 3 – and not sure that counts as a portfolio… but hey! its growing) had a great month.
Rental Property #1
The table below outlines all the revenues and expenses for property #1. This was a very quiet month and I spent less than an hour managing this property.
The tenants paid their rent of $2,275 (increasing $25/month next month) in full and on time. I stopped by on my way home from work to collect to the rent which took about 20 minutes of my time.
I typically collect the rent in person and will chit chat with the tenant(s) for a moment if they are home. This also provides a great time to see if there is anything wrong with the house or make minor repairs.
[pro tip: You will likely notice something is broken before a tenant will. Take a gutter for example. A tenant will likely only notify you once something is a problem for them. Being a present and proactive landlord can save time and money down the road]
The young lady who lived in the basement room subleased her room for the next three months. She was required to pay a $350.00 sublease/assignment fee and this process took less than a half hour.
What was involved? The new tenant applied via my online application. I spent five minutes inputting his information into my vendor’s credit/background check website.
The guy had strong credit and a respectable rental history (verified by his previous landlord). I cannot stress this enough…
Always ALWAYS require previous landlord references. Ask several questions and make sure its not their uncle or friend.
After that, I considered him ‘acceptable’ by my tenant rental standards (future blog post). Both of the other tenants also approved of their new roommate (requirement of the lease).
Next, I prepared a brief sublease agreement for electronic signature via Docusign. This process took about 10 minutes of my time. The new tenant sent me his first month’s rent and security deposit ($825 + $825 = $1,650) via paypal and moved in the next day. Moving forward, rent will be paid by check, cashiers check or money order.
One of the guys who lived at the house sent me a note about the front door on a Saturday night. The deadbolt had “become a pain in the ass. Like u gotta put your whole back into it to unlock”
Before you panic and think being a landlord is a nightmare (its not)… This is a VERY easy fix. I stopped by the house the next morning to look at the deadbolt. A little WD-40 and 5 minutes of my time, and the lock was working like brand new.
While I was at the house, I noticed the door knob/lock for the front door was sticking a bit as well. I figured I am already at the property and might as well save a future trip. Being proactive, I spent another 5 minutes taking the knob off, applying WD-40 and putting the knob back on the door.
This repair trip was the best possible outcome. All in all, the solution required 10 minutes of my time, a little WD-40 and no money (already had the can of WD-40. This is an essential for landlords/property managers).
The worst case doomsday scenario for this repair would have been a trip to Home Depot. And guess what? It would not be THAT bad. All I would need is a new lockset which costs less than $30.00
Rental Property #1 Summary
In summary, property #1 – total income $475.00 and one hour of time. As a result, I earned $475.00/hour spent on this property for March 2017. Not too shabby. Does that beat your day job?
*My total monthly mortgage payment is ~$2,013.00 (dropping by $100/month in May now that my escrow account is properly funded… long story & will share more another time) and I am paying down additional principal every month. This is the only property I pay more than the minimum. Sometime over the next year or two, I will start aggressively paying this home off as I plan to live here when I start FIRE.
Rental Property #2
The table below outlines all the revenues and expenses for rental property #2. This was a very quiet month and I spent less than an hour managing this property.
The tenants/roommates paid their rent of $4,000 in full and on time. Since the tenants of rental property #2 live with me, collecting rent is easy. Everyone leaves their rent on one of the counters and I mobile deposit their checks. No trip to the bank required. The money literally comes to me…. Cannot beat that.
One of my roommates’ leases expired at the end of February. As such, we were graced with a new roommate who moved in during the first week of March. This also means I did not have any vacancies at the property.
Finding a replacement was relatively easy. We put an ad up on Craigslist and circulated the information to our various social networks. We were fortunate to be ‘one and done’ since the first guy that showed up was awesome.
Like rental property #1, the new roommate/tenant had to go through my on-line application. He checked all the boxes as expected; most people with a government security clearance are pretty boring on paper.
Guess what? No, the answer is not chicken butt…. BUT! I had no repair items this month. This is ACTUALLY very common for a landlord. Real Estate is truly a great form of passive income and I will keep shouting this from the mountains.
Rental Property #2 Summary
In summary, rental property #2 – total income $1,591.43** and one hour of time. As a result, I earned $1,591.43/hour spent on this property for March 2017. Not too shabby. Does that beat your day job?
**I also live in the house and get paid to live here. Pretty sweet right? House Hacking is awesome.
Rental Property #3
Rental property #3 is under construction. I will have an update later this week about the renovation process.
To sum up this entire report, I spent about 2 hours of my time on existing rental properties. Property #3 is being renovated and that did eat up some of my free time (not included in calculations). However, I am comfortable with the upfront time and costs since the property will provide a nice passive income in the future.
This month I pocketed $2,066.43 or $1,033.21/hour. My renters also paid down $1,318.78 of my debt. That brings my monthly gain to $3,385.21 (or $1,692.60/hour). Not bad for a few hours of time? What is your excuse for not being a landlord?