So October may not be my month as a landlord. I managed a modest profit last month in spite of an eventful month. Last year, October was a crazy month as well. You can read about last years fiasco with raccoons, plumbing problems, and furnaces dying here. This year, October had a completely different set of problems. In fact, I also have a couple of ‘first’ time encounters to share. Grab the popcorn; this is going to be a fund report.
The Landlord Report – October 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, October was a profitable month. Rental property #1 had a perfect month. Meanwhile, there was a minor repair at rental property #2. If you follow my monthly reports, you may wonder why the revenue is so low at rental property #4 (more on that to follow). You will also notice some higher expenses. The chart above only summarizes the monetary activities. I also experienced a tenant fleeing the country which isn’t captured in the numbers (more on this later as well). 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 on my way home from work. This costs me about 15 minutes of my time.
Rental Property #1 Summary
In summary, rental property #1 – earned $356.76* earned and I spent about 15 minutes managing the property.
My mortgage debt dropped by $723.96 from my monthly mortgage payments. When considering the principal reduction, I came out ahead by $1,080.72.
*Remember – this is an accidental rental that I plan to live in during FIRE.
Rental Property #2
Rental property #2 had a minor repair and a MAJOR tenant problem in October. Starting with the less exciting repair – the furry visitor from last month chewed a hole in the p-trap below the kitchen sink. This was a bit annoying but an easy fix. Swapping out the old part for a new part only took 15-minutes. But, I bought the wrong part and had to make two trips to the hardware store. In total, this process took about an hour of time. The correct part cost only $7.72; I will return the excess materials on my next trip to the hardware store.
Minor plumbing repair:
Total cost: $75.33
Total time: 1 hour
So, now the more entertaining news. One of the tenants (roommates) was from China. She was attending a graduate studies program while living in the States on a student visa. One day out of the blue she decided to tell me she would be leaving the country by the end of the month.
You see, this in itself is not a problem. The lease is legally her responsibility until the lease matures or she finds someone to take over her lease. Though, candidly, enforcing my rights as a landlord would be near impossible as she would be fleeing to a communist country. Things started to get more sketchy as the month progressed.
First, she gave little effort to find someone to take over her lease. Then, her rent check for the month bounce. I called her out immediately and made her resolved her rent delinquency immediately. She did.
We knew this roommate/tenant was moving out and were not surprised to see her boxing stuff up to ship back home. She became more withdrawn and reserved as the month progressed. Then, one morning she seemed really off. I didn’t think much of it since it was maybe 6:00 am or 6:30 am.
Later that evening I arrived home to see the trashcans filled with her stuff. I knocked on her bedroom door but received no answer.
So, I decided to poke my head into her room. The room was empty except for all of her furniture.
I gave her cell phone a call only to find that the number had been disconnected. She fled the country a few weeks earlier than anticipated with no explanation.
Essentially, she tried to stiff me on her last month’s rent but was unsuccessful. Thankfully, DC is a very transient city and I was able to find a replacement for her room with little effort. I spent maybe an hour finding a new roommate/tenant and avoided a vacancy.
Also, the entire house believes our long lost roommate might have been a spy.
So, in summary – I’ve had my first international tenant flee the country. She did not satisfy her lease obligations, nor did she leave her room in an acceptable state as she left all of her furniture. As such, she also sacrificed her security deposit.
Besides a possible spy of a roommate fleeing the country, it was a good month. 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 $1,339.56**. I spent about 2 hours 15 minutes managing rental property #2 this month.
My mortgage debt decreased $748.06. When factoring paying down my debt, rental property #2 made me $2,0877.62. Not bad for about a couple of hours 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
Things at rental property #3 were relatively quiet this month. I received the bill for last month’s repair (water damage from a leaky window). My contractor also replaced the laminate countertops for the upstairs unit kitchen. The labor and materials consumed most of rental property #3’s cash flow for this month. Otherwise, it was a quiet month all around.
Window leak & counter replacement:
Total cost: $1,404.88
Total time: Time captured last month
Utilities for the property:
Lawn care: $110.00 (grass cut & removal of poison ivy)
Gas Bill: $41.09
Water Bill: $260.34
Electric for unit 2: $133.36
In summary, rental property #3 – lost $133.75 and I spent about 15 minutes of my time managing this property.
Rental Property #3’s mortgage debt also decreased $420.24. When factoring in paying down my debt I made $286.49.
Rental Property #4
Rental Property #4… This property has been like a redheaded stepchild since I’ve owned the place. I finally have all three units occupied as my third tenant moved in at the end of October. The new tenant’s rent will be reflected in next month’s report. However, I am also now dealing with my first eviction.
The tenant in unit 3 has willingly decided to stop paying his rent and for no reason other than he doesn’t want to. This is why my rental income is $610 less than the previous month – frustrating but I will manage for now. The blow is softened a bit since the VA pays almost half of his rent.
We had our first court date at the end of October. The case was continued to allow the tenant more time to find legal counsel. However, he does not have any case to make or stand on. As a part of the continuance, the judge granted me a protective order. This means that the tenant must pay his rent to the court until the case is resolved. Failure to do so will result in him giving up his rights and expedite my ability to evict him. The case will resume in the middle of November; I cannot wait to share this story as it evolves.
Otherwise, there is nothing to report except for this month’s utilities.
Water Bill: $107.94
Electric for units while vacant and common area: $79.46 (I will only pay for the common area once all the units are leased)
In summary, rental property #4 – lost $158.19 and I spent about 4 hours 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 $441.66. When factoring in paying down my debt I made $283.47.
In summary, I spent about 6 hours and 45 minutes of my time maintaining my rental property portfolio.
In October, my rental properties made $1,404.38. I made $208.06/hour being a landlord. Being a landlord is rewarding even during a bad month This month’s time commitment was above average. I expect things to improve over time but am curious to see how the eviction saga unfolds.
My mortgage debt decreased $2,333.92 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 $3,738.30. So, I made$553.82/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?