July/August Passive Income Update: Lakes, Birthdays, and Putting Around

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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A big apology for the extended hiatus – between traveling back to the US to see family for a couple weeks, applying to business school, and some stressful times at the office, the blog definitely took a back seat.  We are back with another passive income update!

I got to head back to Minnesota to see family for a couple weeks – which meant long days on the lake, heated games of cornhole, and a few off tune sing-alongs around the fire at night.  If only the weather there would stay like that all year round….

Awesome nights on the lake

I flew back to Tokyo just in time for my birthday, which we celebrated at a great steakhouse downtown.  Once in awhile it’s definitely worth the splurge!

Happy Birthday “Jhon”

My birthday present to myself this year was a new Odyssey putter – after the head nearly fell off of the putter I’d been using for the last 10+ years I decided it was time for an upgrade.  I took it out for the first time this past weekend and drained two 20 footers.  I think “The Claw” will be in my bag for many years to come.

 

Now onto the passive income!

Net Income for July 2017: $878

Including Principal: $3,193

The specifics: 

Apartment: $1,200

Townhome: $1,995

5-Plex: $5,760

Total Revenue: $8,955

Expenses by Property:

Apartment: $518

$30 maintenance, $434 association fees, $54 management fees

Townhome: $871

$387 maintenance, $70 rental license renewal, $335 association fees, $79 management fees

5-Plex: $2,145

$270 repairs for inspection, $347 rental license renewal, $105 electric, $57 gas, $971 water/gas, $395 management

Mortgages (including tax):

Townhome: $1,750

5-Plex: $2,833

Total Expenses: $8,117

 

After another high water bill in July we decided to give one of our problem renters notice (they’d cost me over $1000 the previous month as well), and unfortunately they were putting quite a strain on the overall building.  Despite being on a month-to-month contract, we gave them 2 months to find new lodgings, and they have since left amicably.  The tenants were renters from when I originally bought the building, and while you can never fully vet prospective tenants on your own, generally issues like this are accompanied by other warning signs.

Now that the tenants have left, I’ve repainted the unit completely and done a fairly decent amount of repairs considering the family was only in the unit for about a year.  Onwards and upwards!

Net Income for August 2017: $2,305

Including Principal: $4,596

The specifics: 

Apartment: $1,200

Townhome: $1,995

5-Plex: $5,760

Total Revenue: $8,955

Expenses by Property:

Apartment: $488

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

Townhome: $436

$22 maintenance, $335 association fees, $79 management fees

5-Plex: $1,143

$26 maintenance, $113 electric, $48 gas, $561 water, $395 management

Mortgages (including tax):

Townhome: $1,750

5-Plex: $2,833

Total Expenses: $6,650

Finally back to a low expense month – and once we get a new tenant in the 5-plex we should be back to chugging along just fine.  What I am quickly figuring out owning an entire building is that there is considerable volatility in expenses which I just didn’t encounter when owning the townhome and the apartment.  The 5-plex continues to be a good investment, but it’s certainly taken some time to get used to the cash-flows.

Even with a few tougher months, I’m still hoping to 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.

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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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