Monthly Portfolio Report: February 2021
One of my goals with Rental Income Advisors is to be as transparent and data-driven as possible with my readers and my coaching clients. I think the best way to build confidence in a new investor is to actually show the numbers, to prove that rental property investing really does work as advertised.
For those reasons, I publish a monthly report on my portfolio’s performance. I hope that this chronological history paints a clear picture of what it’s like to be a remote landlord. It’s also a great exercise for me to be sure I’m staying plugged in to all my numbers.
Here is the update for February 2021.
Property Overview
Back to full occupancy this month, woohoo! That’s the good news.
The bad news is that this will be short-lived. I’ve had another early lease break, so Property #7 will be “financially vacant” starting in April (I will retain the security deposit, which will cover March). The worse news is that the condition of the property is pretty bleak — there were some roof leaks that went unreported by the tenant, so there is extensive water damage as well as mold to be dealt with. It will be a very expensive turn. I will provide further details on this property in the coming months.
As I mentioned in last month’s update, I closed on Property #19 in early February. This will be my 20th door in Memphis! This new property is represented by the blue pin on this article’s thumbnail image. Per my normal rule for new properties, I’ll begin to include its numbers in the monthly reports starting with the first full month after closing (which in this case will be March 2021’s monthly report).
Rents
February was another month of perfect collections! For March, there are two tenants ($1,500) outstanding as of mid-month, which is typical.
In February, I did have one tenant who did not pay until the 25th of the month, and has not yet paid March rent either. This is definitely a flashing warning signal, so we’ll see if this situation worsens. (I can only hope that the tenant is eligible for their relief check, and gets it soon!)
Expenses
A few explanations of this month’s expenses:
Property Management: This was ~$600 higher than usual due to the leasing fee for the new tenant at Property #13. Whenever a PM places a new tenant, they charge a leasing fee — in my case, this is 50% of a month’s rent. (Read more on PM functions and fees here: What Does a Property Manager Do?)
Property Taxes: I own three properties outright with no mortgage. For those homes, I have to pay property taxes directly, rather than through a lender’s escrow account. This month’s charges represent annual Memphis city taxes for those three properties.
Maintenance & Repairs: Just a few issues this month — a hot water repair, a heat fix, and replacing a garbage disposal — along with several $75 charges for annual occupied home inspections by by PM.
Utilities: These are the final utility charges during my recent vacancies at Property #13 and Property #18. Owners are responsible for utility costs while properties are vacant.
The Bottom Line
My financial model projects my Memphis portfolio to generate $5,809 of positive cash flow in an average month. In February, the positive cash flow was $5,212, slightly below that projected average. Despite my full occupancy and collections, my numbers were pulled down by one-time charges for Property Taxes and a leasing fee. I also collected only a prorated rent for one side of my new duplex — the tenant moved in late-January, but I get a full month’s rent in the month they move in (even if it’s late in the month) and any proration is applied to the second month.
Finally, here’s the running tally and graph I update each month. The dotted blue line indicates my projected average monthly cash flow for my portfolio in each given month. You can see that this month, I fell a bit below that line and gave back my surplus from January.
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About the Author
Hi, I’m Eric! I used cash-flowing rental properties to leave my corporate career at age 39. I started Rental Income Advisors in 2020 to help other people achieve their own goals through real estate investing.
My blog focuses on learning & education for new investors, and I make numerous tools & resources available for free, including my industry-leading Rental Property Analyzer.
I also now serve as a coach to dozens of private clients starting their own journeys investing in rental properties, and have helped my clients buy millions of dollars (and counting) in real estate. To chat with me about coaching, schedule a free initial consultation.
