November could not come fast enough. The previous month was a bloodbath. October 2017 was marked by raccoons, never ending plumbing problems and replacing a furnace. Oh, I almost forgot the partial vacancy and negative cash flow.
Thankfully, November was an average month for my rental property portfolio. There were a few minor maintenance items. Nothing was overly stressful, time consuming or expensive. My real estate team and I took care of all the repairs.
I was also fortunate enough to buy rental property #4 in November. I am very excited about this property and will be sharing a lot more details through a series of posts.
The Landlord Report- November 2017
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’. 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) I spent. 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. 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 month:
As you can see, November was a decent month for my rental property portfolio. There was a partial vacancy at rental property #1 but this will not be an issue moving forward.
There were also a few minor repairs at rental property #1 and #2.
The Utilities at rental property #3 ate up some of the cash flow but the figure is distorted. I am discussing the bill with the utility company.
Being a landlord is not all sunshine and cash flow. But! I still love being a landlord.
Below you will find a detailed account about what happened at each property this month.
Rental Property #1
Rental Property #1 Summary
I am thankful that rental property #1 caused fewer headaches this month. There was a partial vacancy and a minor appliance repair.
One evening my tenant called me. He told me the washing machine would not drain and smelt like it was burning. He stupidly kept trying to run the spin/drain cycle even after there was a burning smell.
Thankfully, a quick phone call to my appliance repair guy did the trick. He stopped by the next morning to fix the washer.
There were actually two problems. First, the drain line was pinched. This prevented the water from draining.
Second, a part needed to be replaced so the spin cycle could properly function; this was likely caused by the tenant’s repeated attempts to run the spin/drain cycle.
Total cost: $109.82
Total time: 10 minutes
I found a great tenant to move in mid-November and his lease will run through the end of June. The shorter term lease was my idea since I want to get the room back on the summer leasing schedule. I will also give the tenant an option to renew for a full year.
The house remains rented on a room by room basis and always has been. This is not ideal, however, this occasionally happens when you move out of a house hack. I look forward to the day of having a traditional lease on the property.
Moving forward, the rent will return to $2,300 a month.
The tenants also paid their rent on time. I stopped by the rental property to collect the rent after work. This took 20 minutes of my time as a chatted with the tenants and enjoyed a free beer.
In summary, rental property #1 – lost $175.56* and I spent about 30 managing the property.
My mortgage debt dropped by $756.33 from my monthly mortgage payment. When considering principal reduction, I made $580.77.
*Remember – this is an accidental rental that I plan to live in during FIRE.
Rental Property #2
It was a quite month for rental property #2.
The house has two HVAC systems. One is a traditional system that services the entire house. The other is a mini-split that provides additional climate control for the basement.
The mini-split was low on freon. This caused an error message to appear on the remote and the unit stopped working.
Thankfully, a quick phone call to my go to HVAC repair guy solved the problem. He stopped by the following day and refilled the freon. The system is working great.
Total cost: $185.00
Total time: 10 minutes
The tenants paid their rent of $4,000 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 $1,406.43**. I spent about 20 minutes managing rental property #2 this month.
My mortgage debt decreased $721.18. When factoring paying down my debt, rental property #2 made me $2,127.61.
Not bad for 20 minutes of worth of work. This is what a normal month typically looks like as a landlord. The dollar per hour cannot be beat.
**I also live in the house and get paid to live here. Pretty sweet right? House Hacking is awesome.
Rental Property #3
The good times continued with rental property #3 this month. There were no repairs or management items requiring my time.
The water bill was $471 this month and the building used almost 30,000 gallons of water. Yes, 30,000 gallons – you read that correctly. Rental property #4’s average water usage is between 3,000 and 4,000 gallons.
I am fairly certain there is an error. Sometimes water bills can run much higher if there is a leak or running toilet.
I stopped by the property to check all the sinks, toilets and showers. There were no leaks. The toilets were not running.
I contacted the utility company to contest the bill. There is a possibility the water meter is broken. They are looking into the matter. Hopefully, this all works out.
In summary, rental property #3 – made $1,233.82 and I spent about five minutes of my time managing this property.
Rental Property #3’s mortgage debt also decreased $405.09. When factoring paying down my debt, I made $1,638.91
In summary, I spent about 1 hour of my time maintaining my rental property portfolio.
Rental property #1 require minimal time to manage. The property was cash flow negative this month. If the property was fully rented, it would have provided positive cash flow.
Rental property #2 was very manageable, required little effort and provided great income.
Rental property #3 took little time to manage but the water bill hurt.
Overall, this was an average month my rental portfolio. Being a landlord still feels worth the time and energy.
In November, my rental properties provided me with a positive cash flow of $2,464.69.
My mortgage debt decreased $1,882.60 last month which further increased my net worth.
Factoring in repayment of debt and cash flow, my rental properties earned $4,347.29. Being a landlord and owning a rental property portfolio is great.