June Passive Income Update: Rainy Season, Hiking, and Inspections

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!

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June was another busy month (is it just me or is this year really flying by??) although I definitely made sure to fit some fun activities into the mix.  June is typically rainy season here in Tokyo but we were actually lucky enough to have somewhat decent weather throughout the month. 

Despite the hot weather, I spent my weekends getting some great hikes in and even got to the beach for a quick day trip.  For the most part we had blue skies the entire time and definitely made the best of the “rainy season” this year.

Beautiful little entryway on a hike in Kamakura, about 1.5 hours southwest of Tokyo

The beach was absolutely deserted, and when we asked some of our Japanese friends about it, they claimed that most locals prefer to wait until after “Ocean Day” in mid July before going to the beach.  I guess being a foreigner does have its perks!

Private beach anyone?

My expenses were fairly low for the month, although I did spend $50 on a golf lesson to sharpen up my game before hitting the course with some friends in early July.  My car and rent are typically the brunt of my expenses, but I do a pretty good job at keeping my discretionary spending on the lower end (of course always leaving some room to treat myself!)

Spent a great afternoon out of the office soaking in the sunshine and reading

Now onto the passive income!

Net Income for June 2017: $-90

Including Principal: $2,248

The specifics: 

Apartment: $1,200

Townhome: $1,995

5-Plex: $5,760 (caretaker is getting a $100 rent reduction)

Total Revenue: $8,955

Expenses by Property:

Apartment: $488

$0 maintenance, $434 association fees, $54 management fees

Townhome: $414

$0 maintenance, $335 association fees, $79 management fees

5-Plex: $3,538

$1,474 inspection repairs, $160 electric, $170 gas, $1339 water/gas, $395 management

Mortgages (including tax):

Townhome: $1,750

5-Plex: $2,833

Total Expenses: $6,793

Another fairly frustrating month from a cash flow perspective, but luckily I am diversified enough that my townhome and apartment were able to cover some of the issues in the 5-plex.  I was hit with a tough building inspector who left us with about $1.5k of repairs, but the real issue was a tenant who had failed to inform us of a leaky toilet valve and had broken off a piece in the shower, both of which left me with a water/trash bill of nearly $1400 which is easily $800-1000 too high for the building.  The electric and gas bills were adequately budgeted for prior to purchase of the building, but it’s really been the water bills which have been killing me lately.  We think we’ve solved the problem so hopefully next month will be a different story and we’ll be back in the $600 range.

Given my other two property utility bills are paid for by the renters, I’m realizing how much easier it is to let them deal with these sort of usage issues on their own.  I’m fairly certain that this particular renter would have brought this issue up much quicker had they been paying their own water bill…

Despite it being a rough month – I’m still chugging along as expected, and will likely end the year at around $36-40k including principal paydown.  My personal goal is closer to $100k per year, but even at $50k a year I am fairly comfortable covering my current expenses.  I will be raising the current rent on the 5-plex by about $65 in July which will help as well, but I’m definitely looking forward to having a smoother July (fingers crossed)!

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To read more about my story and more about the properties, check out my original passive income post or read more about me here!

 

 

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