All 25 of 25 rents were collected and deposited mostly on-time. I was able to place at least four renters so far this year, with one vacancy coming up for May 1. Rents have been bumped up just a bit for 2015 on the turnovers, so my monthly gross income, before expenses, should be up quite a bit over last year. I was able to raise rents just a bit in 2014 too. And I have bumped up the rent on one renter for April 2015.
Rental Cash Flow
All 25 rents were collected and deposited by 3/6, and all but two were in the bank by 3/3. (Update: actually, I missed the bank on Friday evening for the last one, so it’s a Saturday or Monday AM deposit for the final one.)
I had one late rent, from my one tenant, the one that is always late. I did get the money order on Friday, before the banks closed. I continually let her slide on the late fees, as she has an apartment that I have not yet remodeled, and has been there since I purchased the building. My mortgage payment is not much higher than her rent, and her rent helped quite a bit when I was initially remodeling that building. At some point, a major remodel will be completed, and rent will be higher from that apartment.
My monthly text reminder went out on the 28th of the month, which was also the last day of February. So, there was not much notice as a reminder to the tenants.
I did have one rent that came in the mail on the 5th, and it was due to the tenant’s bill pay setup and the short month, it arrived on the 5th. As soon as the reminder text went out, they responded and said that the rent was set up to start on the 27th, and might be a few days late. I would never have charged a late fee in this case, and it did arrive before the last fee would have kicked in.
In 2015 so far, I will have had to get five new tenants. Four are already either moved in, or locked in with a $1,000 deposit. I use my standard method to get tenants. Price right, market effectively, and screen hard.
I have moved one tenant in already, with three tenants that I have already screened and taken a $1,000 deposit. I have one unit left to fill for a tenant that wants to move early, but is obligated to stay (and pay) until 6/30.
So, currently I have tenants moving in 3/15, 3/24 and 5/1. Selling the extra week or two to a new tenant is a great way to make extra rent. They get to ‘own’ two places for a few days, which allows a slower move and plenty of time to clean the ‘old’ place. Moving trucks are a lot cheaper in the middle of the month too.
The first part of the month is pro-rated, and all rents remain due on the first of each month after move in.
Apartment 1 Difference +$0
Apartment 2 Difference +$50
Apartment 3 Difference -$50 (less pets)
Apartment 4 Difference +$50
Apartment 5 Difference +$50 (pet rent)
Apartment 6 Difference +$25 (existing rent increase)
Total + $125 per month
My latest apartment turn was for my tenants that purchased a home through me. They left the place in decent shape, but here is always a bit of work to do in a rental. Here are some things I did. It seems like there is always a few items to fix. If I see something that needs fixing, I fix it. I would rather do it when the unit is vacant, than when a tenant moves in.
- Give it a solid cleaning. Make sure everything is spotless.
- Change locks
- Replace drain stop pull rod in bathroom sink
- Replace toilet fill valve and flapper
- Fix Jacuzzi tub that was no longer pumping water. It was a stuck motor.
- Remount fire extinguisher
- Fix door sweep
- Change tub drain and stopper and re-putty
My renter that moved out received his full deposit back. Plus another $500 for using me as his Realtor to purchase a home. While it is a temporary setback, other than the $500, was not my money in the first place. Once I get new renters in place, I get new deposits to replenish the deposit fund.
Many landlords get into trouble by spending the deposits and not being able to sustain their properties without it. I do not keep my deposits in a separate account, but I definitely have enough capital to pay back all the deposits (and then some…) if needed.
I should get a commission check this coming week to make up for the lost renter.
New Texting App
My old app that I used to send texts to my tenants as rent reminders became useless about three months ago. The old app, GoSMSPro, quit the scheduling option. I did not even know it for a month or so. An application update came through, and it was gone. No notice, no warning.
I looked long and hard for a texting app that would be all of the following
- Allow scheduled texts
- Allow the ability to send a text to a Gmail group of people, I do not want to have to key in 35 renters individually
- All me to pick the phone number to text, when the tenant had more than one phone number
- And be Free
Actually, I would likely pay for the app, but free is better. Even better would be the ability to manage a group from my desk top, without having to set up a new Gmail group.
I settled on an application called HandcentSMS. It appears to do everything I want, and is free.
So now my monthly rent reminders go out on the 28th of each month, at 1:00 PM. I send one to myself too, just so I know it goes out.
Major Expenses Paid
I paid ahead on many expenses in December for tax purposes, so February was heavy on cash outflows. My main purchases in December 2014 were charged, and the Credit cards that came in January and were due in late January/February. All bills were paid in full, so February was great in terms of rent collections, but helped fund some of last year’s expenses. My prepaid insurance bills were checks, not charges, so those impacted December’s cash flow.
I received my 2015 property tax statements this week. The taxes are down slightly overall, so in 2015, I should pay about $1,700 less than I did in 2014. The valuations stayed the same for the 4-plexes in 2015, and I received notices that the valuations would be headed up for 2016 by about 3%. So, that will likely eat up any tax savings for the year. But it all adds up and I will take the savings for this year. In 2014, I paid $31,403.26 in property taxes, not including my personal residence.
Was your cash flow as expected? Did any major household expenses attempt to derail your financial independence objective? Are your property taxes up or down this year?