March 2017 Passive Income Update

Welcome to my monthly passive income update! For those new to the blog – I own 3 properties, an apartment, a townhome, and an apartment building with five 3-bedroom units.  The apartment is now owned completely in cash, while the townhome and 5-plex have mortgages which I’m trying to knock down as quickly as possible!  Now let’s get to the good stuff!

Net Income for March 2017: $2,140

Including Principal: $4,265

The specifics: 

Apartment: $1,200

Townhome: $1,995

5-Plex: $5,860

Total Revenue: $9,055

Expenses by Property:

Apartment: $510

$22 maintenance, $434 association fees, $54 management fees

Townhome: $481

$67 maintenance, $335 association fees, $79 management fees

5-Plex: $1,341

$0 maintenance, $310 electric, $636 water (crazy!), $395 management

Mortgages (including tax):

Townhome: $1,750

5-Plex: $2,833

Total Expenses: $6,915

I’m about halfway towards my goal of having enough passive income to cover my expenses, and at this point there’s very little work to do on my portfolio.  I pay a pretty hefty management fee every month, but given I live 6,000 miles away from any of my properties it’s well worth the money.  At some point if I were to move back to the US, I would consider managing the townhome and apartment myself given how low-maintenance they are, but for the time-being I’m happy with the current set up.

My 5-Plex mortgage is a commercial mortgage given conventional mortgages are only provided up to 4 units, which means that I had to get a 20yr mortgage with a 5 year balloon at 4.25%.  Typically most commercial property buyers would sell the property before the balloon is up, and hope to realize a return, but given I’m looking to hold this for the next 10 years or so, I’m alright paying it down aggressively so that the balloon is fairly manageable in 4.5 years.

The mortgage on my townhome is a 15 year mortgage at 2.75% which I refinanced just before Trump was elected, so I’m pretty comfortable keeping that as is for the foreseeable future.  As astute viewers will note, I am at a slight CF negative on the property including the mortgage, but including the principal paydown I’m still making $689 a month (slightly more on months without any repairs).

Now that I’ve refinanced the townhome mortgage and have the 5-plex, I look forward to my mortgages coming due every month.  It’s great seeing the loan tick down, knowing that I’m that much closer to financial independence.  I won’t get there tomorrow, but I sleep easy at night knowing that I’ve put everything in place so that I will get there someday (soon).  Here’s to another good month!

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