Monthly Portfolio Report: July 2021
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 July 2021. You can also check out all my previous monthly reports.
Property Overview
As I mentioned in last month’s update, Property #2 was officially vacant in July, as I re-took possession of the house following an eviction. The turn costs to get this property ready for its next tenant were also paid in July, which was the main driver behind my poor cash flow numbers this month.
Still, I was able to get the place cleaned up nicely, took care of some deferred maintenance items, and placed a new tenant at a rate of $130/month more than the previous tenant was paying. That makes a big difference to the profitability of this house going forward — so it wasn’t all bad!
And it looks pretty darn nice — here are some photos taken after the work was completed:
Rents
All tenants were fully paid in July, plus I received the payout of the evicted tenant’s security deposit from my property manager — I book this as a separate category of income, but it’s still income, which is why I show as over-collected this month.
Expenses
A few things require explanation this month:
Maintenance & Repairs: I had a normal month of typical repairs across my portfolio (plumbing and HVAC issues mostly), but on top of that I incurred just over $5K in turn expenses at Property #2. This was more expensive than a typical turn — this is the first time I’ve turned this property since I bought it in December 2018, and first turns are always a bit more expensive because my PM has to bring certain things up to standard. Future turns will likely be in a more typical cost range ($2K-3K).
Legal Fees: Though my PM handles all the legal aspects of an eviction on my behalf, they do charge me back for the costs — that’s what the $480 charge was this month.
The Bottom Line
My financial model currently projects my Memphis portfolio to generate $5,996 of positive cash flow in an average month. Note that this has decreased by about $500 this month, due to two factors:
I completed a cashout refinance on Property #18, the duplex I bought last fall, so I now have an additional mortgage payment.
Memphis completed its property reappraisal process, which it does every four years, and the overall impact was an increase in my annual property taxes of just over $200/month. I’ve built these new costs into my pro forma model.
In July, the positive cash flow was just $1,881, more than $4K below the projected average — again, due entirely to the cost of the tenant turn at Property #2.
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. The roller-coaster ride in 2021 continues!
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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.
