August was an average month for my rental property portfolio. There were a couple of small items that I had to address. Otherwise, it was a quiet month. This was much appreciated after the hellacious month last month.
The Landlord Report – August of 2018
Hello there – welcome to another “Landlord Report”. This monthly report shares my experiences as a landlord. The report will show EVERYTHING related to my rental properties and life as a landlord.
I will discuss the rents that I collected, mortgage payments, and other ‘landlord items’. I may include repairs, how I avoid vacancies, how I screen new tenants or any other items that pop up. This report will share how I made or lost. I will also share what kind of time commitment was required for being a landlord. I want to show the world being a landlord is a wonderful thing.
Throughout this process, I will be as transparent as possible. Being a landlord and owning rental property is a wonderful way to earn (mostly) passive income and allow you to buy back your time faster.
I hope you follow along with this monthly series. The Landlord Report can serve as a guide to owning rental property. Please feel free to contact me with any questions – happy to provide insight.
The table below outlines all my income and expenses for the past month:
As you can see, August was a decent month and I turned a modest profit. Rental property #1 had a perfect month. There were a couple of minor items at the other rental properties that I will dive into greater detail. No crazy fire drills or budget-busting repairs. Being a landlord is not all sunshine and cash flow. But! I still love being a landlord.
Below you will find a detailed account of what happened at each property this month.
Rental Property #1
Things were absolutely boring and easy with rental property #1. I never heard a peep out of the tenants and there were no repair or maintenance items this month.
The tenants paid their rent in full and on time. I collected the $2,325 at the end of a bike ride. One of my favorite trails runs right by the house. I like to stack my bike rides with rent collection. that ended two blocks from rental property #1. This took an extra 15 minutes of my time.
Rental Property #1 Summary
In summary, rental property #1 – earned $356.76* earned and I spent about 10 minutes managing the property.
My mortgage debt dropped by $735.89 from my monthly mortgage payments. When considering the principal reduction, I came out ahead by $1,092.65.
*Remember – this is an accidental rental that I plan to live in during FIRE.
Rental Property #2
Rental property #2 enjoyed a quiet month as well. I had one minor expense this month. The front yard needed some love. The bushes were a bit overgrown and the grass needed a trim. This task needed to be done but it wasn’t worth my time. Being busy, lazy, and having no desire to do yard work, I called my landscaper.
My landscaper agreed to come a couple days after I called him. He knocked this task out for me at a reasonable and fair price.
Total cost: $90.00
Total time: 10 minutes
The tenants paid their rent of $4,050 in full and on time. Rent collection required me walking downstairs to get my morning cup of coffee. Does life get any easier than that?
Rental Property #2 Summary
In summary, rental property #2 – earned $1,324.89**. I spent about 20 minutes managing rental property #2 this month.
My mortgage debt decreased $743.10. When factoring paying down my debt, rental property #2 made me $2,067.99. Not bad for about a couple of minutes of work. Oh, and I got a free place to live.
**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 required a bit of attention in August. Nothing crazy but it also wasn’t a ‘hands-off’ kind of month. The grass was cut this month. This expense will likely disappear in September or October depending on the weather.
Total cost: $40.00
Total time: 15 minutes
One evening, the upstairs tenant called to let me know their garbage disposal was not working. I tried troubleshooting this matter with them over the phone. First, I asked if the disposal would make any noise when they flipped the switch. It did not.
Second, I asked if the fuse had been switched in the electric panel. It has not. Third, I asked for her to push the reset button under the disposal. She did this and the disposal now made a light humming. This told me everything I needed to know. Something had jammed the disposal.
So, I went over to the apartment the following morning on my way to work. Using my garbage disposal wrench (see pic below), this problem was solved in a couple of minutes.
This tool is easy to use and solves most disposal issues. You simply put the wrench down the sink and twist the blades manually. This will grind through any materials blocking the garbage disposal’s blades. For you DIYers at home – make sure the switch is ‘OFF’ before doing this.
A small metal cap was blocking the blades. I think it belonged to one of the little girl’s toys. Over the years, I’ve seen coins, bottle caps and several other things jam a disposal. This is a common repair but an easy fix.
Garbage disposal repair:
Total cost: $0.00
Total time: 35 minutes
As my readers may know, this property has encountered termites in the past. I am pumped to say there were NO termites to report. However, I also did pay for my annual termite policy to keep the property under contract. This is an expense I am happy to pay and it only took a 5-minute phone call with my pest guy to keep the warranty current.
Total cost: $150.00
Total time: 5 minutes
Otherwise, it was a quiet month at rental property #3. Utilities for the property:
Gas Bill: $34.91
Water Bill: $157.05
Electric for unit 2: $122.15
In summary, rental property #3 – earned $1,311.81 and I spent about 55 minutes of my time managing this property.
Rental Property #3’s mortgage debt also decreased $418.09. When factoring in paying down my debt I made $1,729.90.
Rental Property #4
Rental Property #4 was manageable this month. Heck, compared to last month, this was a cake walk. This was the first full month for my two new tenants. As expected, there were a couple of minor items to take care of now that people live at the property. The tenant that moved out also left the place a mess.
Oh, and there was a parking fiasco. The neighbors have been using the parking spaces at the property for a while. I don’t blame them since the place has been vacant for years. Heck, I even talked with the neighbors and said they could use the spots until my tenants moved in. Well, they didn’t seem to care that I have tenants now.
I let the neighbors know two weeks ahead of time that I had tenants moving in. My tenants even met the neighbors. Yet, they still kept parking in our spaces despite civil attempts to resolve the matter. So, I went to Home Depot and bought some No Parking signs. I also wrote official warnings stating our expectations. They were parking on private property and this was their last and final warning. Future violations would result in tickets and being towed at their expense. No issues since.
I also swapped the locks out on one of the units.
Parking Sign and locks:
Total cost: $80.68
Total time: 1 hour 30 minutes
Random items to make new units ready:
Total cost: $42.83
Total time: 5 minutes
So the old tenant left the place a bit messy. There were a couple of boxes left behind (mostly trash). He left a ton of food and other kitchen items on the counters and in the cabinets. The refrigerator full of food as well. He also failed to clean the apartment prior to moving out. His lease clearly states the requirements. He failed to live up to his rental agreement. I had the apartment cleaned at his expense (thanks security deposit).
Cleaning Apartment #1:
Total cost: $250.00
Total time: 30 minutes
Utilities for the month
Water Bill: $118.78
Electric for units while vacant and common area: $107.33 (I will only pay for the common area once all the units are leased)
In summary, rental property #4 – made $39.59 and I spent about 2 hours and 5 minutes of my time managing this property. The property will be more profitable once it’s fully leased.
Rental Property #4’s mortgage debt also decreased $438.64. When factoring in paying down my debt I made $478.23.
In summary, I spent about 3 hours and 30 minutes of my time maintaining my rental property portfolio.
In August, my rental properties made $3,033.05. I made $866.58/hour being a landlord. This month’s time commitment was very average. I also expect the expenses at rental property #4 will drop once everything is settled.
My mortgage debt decreased $2,335.72 in August. Gotta love having tenants pay off over $2k of my debt every month.
Factoring in repayment of debt and cash flow, my rental properties made $5,368.77. So, I made$1,533.93/hour. Being a landlord and owning a rental property portfolio is a great way to build wealth. What is your excuse for not owning a rental property?