The rental cash flow was a solid as ever. All of the 25 rents were all collected and deposited mostly by the third of the month, again. It is a rather boring record, but if you have ever been a landlord, you know this is a great achievement. I did have one rent that arrived on the 5th due to a bill-pay error?, and a $225 partial rent paid for the remaining sum owed on the 8th. The bill-pay error was more due to forgetfulness, than an error. These are solid tenants that are moving out to buy a home, so they have plenty of money.
So here are some of the cash flow highlights of the past several weeks…
The partial pay tenant is the same tenant that is always late, coincidentally the same tenant whose kid broke out my window a few weeks ago. When you have a tenant that partial pays, get as much as you can ON THE FIRST OF THE MONTH, not mid-month. Never accept a partial pay tenant, but if you do, never go beyond mid-month for a partial pay tenant.
Rental Cash Flow – Expenses
Property taxes. The property taxes were paid. Five buildings are paid off, so that is a $9,300 hit to my typical monthly revenue stream. I do not put a set-aside in some special account, but I do have a decent investment account where excess capital is saved. So, the months (May & October) I pay taxes, my savings are a bit lighter than I like as I cannot save as much. Keep in mind, my mortgage companies also send in a bit of property taxes, so I probably support several welfare families, or pave a few streets, all by myself.
Water bills. Quarterly water bills also come due in May. Yuck. They are less than last quarter where I had a couple of runaway toilet flappers. The chart shows the trend is much better. This was a toilet that was constantly running. It was a crazy water bill, over $841. Last quarter it was only $183. That bad flapper costs me over $658!
A Second Water Bill. Another fix I made on a different toilet, in a different building, will also save water as you can see buy the chart. That fix saved about $170 from the previous month. It pays to check and change the toilet flappers. I noticed the water usage trend, and inspected all the toilets in the building. I also replaced a dripping shower valve in this building, although it was after the water bill was generated.
Rotor Rooter. Last month I paid to have my main drain line cleaned at a cost of $249. I also paid to have a camera run down the pipe for another $75. I have a slight belly in the main line, that I have to live with. Short of spending over $10K to dig up the line and replace it, I will live with a few clean outs. Maybe I will buy a main line cleaning tool to do it myself if I find one cheap enough.
Fence. I had to replace a fence that blew down in the wind a month or so ago. I paid ~$120 for the materials and spent some time on it. If the previous installer had not put in like 20 bags of concrete to secure the posts, it would have been a lot easier. I did not use any concrete. Just posts 36” in the ground. It keep the water draining around the wood and the posts actually last longer.
Long term Vacancy Coming
My West St Paul property where all my tenants died is now vacant. It will be vacant for a few months, plus need a few repairs and cleaning. There was still quite a bit of items left in the duplex when the relatives came and got the stuff out. Thankfully most of the items were gone. I would have needed a couple of 40 yard containers to get rid of all the stuff otherwise. I have a 2-yard dumpster onsite, so after a few weeks I can get rid of the remaining items.
One tenant died from lung cancer at 51. She was a heavy smoker, although she was not allowed to smoke in my rental. The other renter that died was only 62 and was a heavy drinker. The mother in law stated “We did not expect him to live this long”.
You cannot continually abuse your body and expect it to last without adding new parts.
When you have an apartment turnover, you should adjust the rents to market. If you want to raise rent on an existing tenant, you need to make sure you have the best deal going. You do not want to lose a tenant over $25 a month.
Here are my 2015 vacancies and rent increases to date.
|Date||Prev Rent||New Rent||Difference||2015 Vacancy Days|
Other Notable Cash Flow Items (personal)
I recently switched out of DirecTV, and only had internet service in my name. The stand-alone internet bill came out, and it was $55+. I called CenturyLink and got a $19.99 price, plus tax. A $34 monthly savings.
I also splurged and bought a Quadcopter. Nothing too fancy, a Syma X5C-1 and extra batteries. Total cost, ~$75. Not bad for a quadcopter with a 2 MB camera.
What was your cash flow like?