June was an interesting month for my rental property portfolio. In some ways, it was a quiet month. In other ways, it was busy with a few curveballs. In fact, I had a new ‘first’ experience at one of my properties.
Most importantly, June marked the first month of having a renter at rental property #4. The ‘new’ rental property has been my slowest project to date. Some factors were out of my control, like dealing with the city. Others were self-inflicted like being busy and having a demanding life.
The Landlord Report- June of 2018
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…
I will discuss the rents that I collected, mortgage payments, and other ‘landlord items’. Additional 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) I spent being a landlord. I want to show the world being a landlord is a wonderful thing.
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 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, June was a profitable month for my rental property portfolio. Rental property #4 is only partially leased. There was a costly repair that and I haven’t received the bill; I will share the details with you this month. I also did not receive the bill from last month’s work at rental property #3. My contractor was lazy with his billing. Both of these items will be captured next month (ouch).
Two of my properties experienced a perfect month in May. A perfect month means that I collected 100% of the rent and had no expenses other than the mortgage.
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
Rental Property #1 Summary
Rental property #1 had a perfect month. The tenants paid their rent in full and on time. I collected the $2,325 on my way home from work. This took an extra 20 minutes of my time but I was the benefactor of a free beer provided by my tenants. Gotta love getting paid to drink a cold one.
Rental Property #1 Summary
In summary, rental property #1 – earned $356.76* and I spent about 20 minutes managing the property.
My mortgage debt dropped by $723.67 from my monthly mortgage payments. When considering the principal reduction, I made $1,080.43.
*Remember – this is an accidental rental that I plan to live in during FIRE.
Rental Property #2
Rental property #2 enjoyed a quiet month. The property’s mortgage increased to $2,635.11 to account for an increase in property taxes. Otherwise, nothing to report.
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 $1,414.89**. I spent about 20 minutes managing rental property #2 this month.
My mortgage debt decreased $738.17. When factoring paying down my debt, rental property #2 made me $2,153.06. 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 had another busy month in June. The eviction saga continued with a temporary solution. Both tenants’ received a three-month extension in their rent program. There was also a minor plumbing repair in the downstairs unit.
As I mentioned last month, I am no longer cutting the grass at the property. My time is too valuable for this task. A quick phone call and PayPal transaction will be the new norm for lawn care.
Total cost: $40.00
Total time: 0 hours 15 minutes
I still have not received the bill from last month’s pipe replacement. The expense that occurred in May will now show up in July’s Landlord Report.
The downstairs apartment also had a plumbing issue. Long story short, the toilet was backed up. This problem was caused by too much human waste and toilet paper clogging the drain. I will spare you pictures this time 😉
Anyway, the tenant lied about this plumbing problem to get me to the property. You see, the tenant’s lease clearly states she is responsible for keeping drains and other plumbing fixtures in working condition. I attempted to plunge the toilet but this was the mother of all clogs.
Unfortunately, I called a plumber on her behalf to fix this problem. I also paid the plumber to keep my relationship strong with him. I’ve requested a reimbursement for the expense as it IS the tenant’s responsibility. Worst case, I take this from the security deposit when the tenant moves out. Best case, I am reimbursed.
Total cost: $180.00
Total time: 1 hour 45 minutes
Below is a breakout of the utility expenses. The gas company is STILL waiting for permits to install the second gas meter. As the tenants turn over, I will no longer pay for gas or electric. However, the DC landlords are responsible for the water bill in multi-unit buildings.
Gas Bill: $46.77
Water Bill: $158.15
Electric for unit 2: $74.92
In summary, rental property #3 – earned $1,316.08 and I spent about 2 hours of my time managing this property.
Rental Property #3’s mortgage debt also decreased $415.24. When factoring in paying down my debt I made $1,731.32.
Rental Property #4
This was the first month with a tenant at rental property #4. Given that I’ve carried this property for 8 months with no rental income, I was ready to have someone move in. In fact, I even broke some of my rules to do so.
I agreed to rent one of the units to a college student who was interning in the city for the summer. His lease is for only two months and he will move out at the end of July. This rental income will be much appreciated as it will cover a bulk of the monthly expenses.
However, you got to love when lighting strikes. The drain for the tub rusted out on his first day living in the apartment. Thankfully, my dream team tackled this job the next morning. My go-to contractor installed a brand new tub in a matter of a few hours. Not a cheap fix though.
New bathroom tub:
Total cost: the bill to be posted next month
Total time: 2 hours 15 minutes
Administrative work associated with new tenants for other units:
Total cost: $0.00
Total time: 3 hours 5 minutes
Water Bill: $53.89
Electric for all units and common area: $103.22 (I will only pay for the common area once all the units are leased)
In summary, I spent about 8 hours of my time maintaining my rental property portfolio.
In June, my rental properties generated $2,361.83 in cash flow which is $295/hour. This month required a modest time commitment. Though, I probably spent at least another 10-20 hours stressing, prepping, and thinking about rental property #4.
My mortgage debt decreased $2,312.72 last month which further increased my net worth.
Factoring in repayment of debt and cash flow, my rental properties earned $4,674.55. This is $584.32/hour which is awesome. If you factor in stressing 20 extra hours, that lowers my hourly earnings to $166.95/hour. Still pretty damn good. My day job doesn’t pay that well. Being a landlord and owning a rental property portfolio is great. What is your excuse for not owning a rental property?