Monthly Portfolio Report: February 2024
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 2024. You can also check out all my previous monthly reports and annual reports.
Property Overview
My one vacant property this month was Property #13, whose tenant vacated with notice at the end of January.
There’s good news and bad news about that turn. First the good news: the turn has already been completed, and the new tenant already moved in on March 8th. Also, the new tenant will pay $1,395 per month, $100 more than the previous tenant. I also retained the security deposit due to tenant charges associated with damage and trash left behind. Overall, it was a very successful and efficient turn.
So what’s the bad news? Well, like many of my turns over the last few years (as described in my annual portolio reports), it was more expensive than I would have liked. Even after trimming out some of the unnecessary items from my PM’s originally-proposed scope, the cost came in at $4,400. Here are the main items I did decide to do:
full interior paint
repainting kitchen cabinets and bathroom vanity cabinets
removed garbage disposal (I hope this will help with recurring plumbing backup issues this property has had)
new exterior doors
various miscellaneous items
I also did something with this turn that I’ve never done before on a house: I painted the outside of the house. (This cost, as well as the new kitchen countertops I installed, are categorized as CapEx costs.) Exterior paint is not usually a critical aspect of rentability, and many of my homes have brick exteriors anyway. But in this case, it was warranted. The old paint was a pretty awful mint toothpaste color, and this house is in a somewhat nicer neighborhood where I imagined tenants would care more about curb appeal. So I decided to do it, in the hopes that it would help attract a tenant quickly at the rent we were asking — which is just what happened. I’m happy I made the decision, and it looks great! Check out the before and after (forgive the watermark, but this is the best before image I have):
Rental Income
I still have a non-paying tenant in the eviction process at Property #23. I hope to retake possession of that property within the next several weeks. This property was a full turnkey when I bought it, so I’m hoping rent-ready costs will be minimal…but with evicted tenants, it’s pretty common for things to be left a mess, so we’ll see.
Despite this shortfall in collections, I retained the security deposit at Property #13 as part of that turn, which bolstered my collections. Further, there was another accounting error in which I was paid out for two months of rent at one property, leading to more over-collections. I’ll give that back next month, though, since I expect there will be no rent paid out in March.
Expenses
This screenshot comes from RentalHero, the online accounting tool I use for my portfolio.
It was a doozy of a month on the expense side. Here are the details:
Maintenance & Repairs: In addition to my turn costs as described above, I also had a $1K roof repair and an $800 busted pipe repair (there was a spell of frigid weather in Memphis in February, and Memphians aren’t that experienced in preventing frozen pipes.)
Property Taxes: I now have 6 properties whose property tax and insurance liability I pay directly, rather than out of escrow. February is the month I pay my county taxes on those properties, which explains the $2,500+ expense.
Utilities: This reflects some additional costs of gas & electric during the vacancies at properties I recently turned.
Tenant Chargeback: This expense category indicates a charge I have paid for, but is the tenant’s responsibility. When the tenant pays my PM, I will be reimbursed.
The Bottom Line
My financial model currently projects my Memphis portfolio to generate $9,074 of positive cash flow in an average month. This month, my cash flow was just $4,934, over $4K below my projected average. The combination of maintenance & repair costs (including a turn), plus property tax expenses, sunk my cash flow this month, despite strong collections.
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. As I anticipated in last month’s report, February was a down month, and brings me into the red for the year compared to my expected cash flow:
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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.
