Monthly Portfolio Report: December 2022
One of my goals with Rental Income Advisors is to be as transparent and data-driven as possible with my readers and my coaching clients. I think the best way to build confidence in a new investor is to actually show the numbers, to prove that rental property investing really does work as advertised.
For those reasons, I publish a monthly report on my portfolio’s performance. I hope that this chronological history paints a clear picture of what it’s like to be a remote landlord. It’s also a great exercise for me to be sure I’m staying plugged in to all my numbers.
Here is the update for December 2022. You can also check out all my previous monthly reports and annual reports.
Property Overview
As I discussed in last month’s report, I had four new properties come online this month, bringing my total to 24 properties and 25 units. I’ve yet to publish the Property Spotlights for these new houses yet, but those will be coming soon. And I have one more property in contract, Property #25, and then that will be it for a while for new acquisitions. (I’m out of money!)
Three of those four new properties were occupied at closing, or very shortly thereafter, but one remains vacant and in search of a tenant. It seems like rental demand is falling off a bit (compared to the insane highs of the last few years), and it’s always a bit harder to find tenants in winter due to natural housing market seasonality. Even with this vacancy, my December occupancy stood at 96%.
Rental Income
Collections were perfect this month — love that!
Property #20’s rent was prorated this month. Even though the tenant moved in just before the end of November, my property manager collects the first full month of rent when they move in, and the second month is pro-rated. So my total rent roll will increase next month, and increase further when my one vacancy is eventually filled.
Expenses
This screenshot comes from RentalHero, the online accounting tool I use for my portfolio.
Here are the highlights with my expenses this month:
Maintenance & Repairs: Pretty typical maintenance costs this month (though the total is below my pro forma monthly budget): two occupied home inspections; a toilet repair; two visits to fix heat (it got very cold in Memphis around the holidays), and a garage door repair. About that cold spell: it was a highly unusual event for Memphis, and many homes and businesses had damage from frozen pipes. None of my properties were impacted, which was a combination of luck and proactive communication to tenants from my property managers to drip faucets and take other preventative measures.
Property Management: This was a bit higher than normal due to two lease renewal fees ($250 x 2).
Tenant Chargeback: Occasionally, my property manager makes a repair that is charged back to the tenant. That happened this month when they were forced (for the third time this year) to flush out kitchen grease from the plumbing of one of my homes. When the tenant reimburses my PM for this, the amount will be credited back to my account. (And hopefully the tenant knows to stop putting that bacon fat down the drain!)
HOA Fees: Two of my new properties (Property #24, and the still in-contract Property #25) are — wait for it - condos! There are a lot of reasons why condos don’t make great rental properties, a topic I wrote a full article about. But these properties are a unique situation that I’ll discuss in detail in the Property Spotlights for those units, and those unique circumstances should ensure that these are successful long-term investments. The monthly HOA for each is $70, so you’ll see that in my monthly expenses going forward.
The Bottom Line
My financial model currently projects my Memphis portfolio to generate $9,301 of positive cash flow in an average month — a big jump from previous months thanks to my newly acquired properties. This month, my cash flow was $11,211, nearly $2K ahead of my projected average. This overage was driven by lower-than-budgeted expenses, and by the lack of any “one off” insurance or tax payments on my un-mortgaged properties.
Finally, here’s the running tally and graph I update each month. The dotted blue line indicates my projected average monthly cash flow for my portfolio in each given month. I ended 2022 with ~75K in cash flow, but this was nearly $9K behind my projected annual amount. I’ll be publishing my 2022 Annual Report in the next few weeks, where I’ll discuss that shortfall (and its consequence for my future-year projections) in more detail.
Free Rental Property Analyzer
Need help running the numbers on rental properties? Want to be more confident in your financial projections?
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About the Author
Hi, I’m Eric! I used cash-flowing rental properties to leave my corporate career at age 39. I started Rental Income Advisors in 2020 to help other people achieve their own goals through real estate investing.
My blog focuses on learning & education for new investors, and I make numerous tools & resources available for free, including my industry-leading Rental Property Analyzer.
I also now serve as a coach to dozens of private clients starting their own journeys investing in rental properties, and have helped my clients buy millions of dollars (and counting) in real estate. To chat with me about coaching, schedule a free initial consultation.
