Monthly Portfolio Report: July 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 July 2022. You can also check out all my previous monthly reports.
Property Overview
In last month’s report, I discussed in detail the two simultaneous property turns I started in June. Both those were still ongoing in July, so I had two properties vacant. One of those new tenants moved in on August 1st, and the other at the end of August, so my occupancy will move back up toward 100% in the coming months.
Rents
Because of the two vacant properties, I charged less rent than usual this month. I also fell short on collections due to two issues:
The non-paying tenant at Property #9, a situation that (believe it or not) has been ongoing since October of last year. But there’s good news here: in August, I received a significant amount of back-rent on this property thanks to the help of a local rental assistance agency. More on that, including the numbers, in next month’s report.
The tenant at Property #11 did not pay rent before the end of the month. Good news here as well: they got fully caught up in August.
Expenses
Here are the highlights with my expenses this month:
Maintenance & Repairs: Pretty typical month of expenses, including some leftover rent-ready expenses from the two turns (such as cutting the lawn, which my PM does every few weeks while the homes are vacant.)
Mortgage: This is another ~$250 higher than last month due to annual escrow adjustments on several of my loans. Lenders adjust escrow payments each year to ensure they’re collecting enough to cover the expected tax and insurance payments; in this case, because property taxes went up on many of my properties last year as part of Memphis’ quadrennial (every four years) re-appraisal process, the lenders are collecting more escrow dollars.
Legal Fees: Because the tenant at Property #11 did not pay rent this month, my PM initiated the eviction process and charged me this fee. However, the tenant got caught up in August, including paying this fee as they’re required to do — so I’ll be reimbursed next month.
Utilities: Like last month, I was responsible for utilities charges on the vacant properties.
The Bottom Line
My financial model currently projects my Memphis portfolio to generate $6,729 of positive cash flow in an average month. This month, my cash flow was only $4,441, for a shortfall of over $2K. This deficit was a result of the two vacancies and the poor collections.
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. While I’ve banked over $30K in cash flow for the year, I have a big hole to climb out of this year versus my projections, thanks mostly to the two expensive turns I just completed.
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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.
