Property X
Rents Collected: $13,700
Repair Costs: $3540.52 (2016: $4,832.89)
Water Bills: $335.43 (2016: $414.28)
Taxes Paid From Rent: $649.05 (Anita paid the rest out of pocket)
2017 Property X Net Earnings: $8704.12 (2016 - $8,928.85)
Property X Comment: Another good year for Anita. Four more years like this and she will have recovered ALL the money she paid for the place. I'm looking for at least a $9,000 profit for Anita in 2018, so I'll keep this in mind when doing repairs.
Property 1
Rents Collected: $16,800
Mortgage Payments: $9,996
Repair Costs: $676.28 (2016: $1,698.30)
Water Bills: $372.50 (2016: $453.45)
National Grid Bill Totals: $1,842.77 (2016: $1,983.09)
2017 Property 1 Net Earnings: $3,918.05 (2016: $2,427.16)
Property 1 Comment: Lower repair costs. Lower water bills. Lower gas and electric bills. It's easy to see how I increased my profit from year to year, but $3,900 doesn't seem like enough to me. I have to find a way to increase profits while maintaining the stability this property is known for.
Property 2
Total Rents Collected: $15,960
Mortgage Payments: $9,048
Repair Costs: $5,528.60 (2016: $2,372.21)
Water Bills: $477.21 (2016: $731.50)
2017 Property 2 Net Earnings: $977.19 (2016: $2,645.05)
Property 2 Comment: Once I got rid of Gianna and Nicholas, my water bills dropped significantly. With both apartments finally renovated, 2018 should yield great profits... even with turnovers.
Property 3
Total Rents Collected: $22,000
Mortgage Payments: $10,644
Repair Costs: $6,854.98 (2016: $547.65)
Water Bills: $762.10 (2016: $766.02)
National Grid Bill Totals: $3,847 (2016: $3,271.36)
2017 Property 3 Net Earnings: -$87.79 (2016: $8,881.15)
Property 3 Comment: Four apartments and I couldn't make a profit. This is sad. But this is also what happens when you leave an apartment vacant for six months. Had I done the renovations for Tom's apartment faster, I would have had more months of profit and a much better return.
Property 4
Rents Collected: $10,000
Repair Costs: $1,086.14 (2016: $3,362.68)
Water Bills: $169.06 (2016: $41.31)
2017 Property 4 Net Earnings: $6,046.29 (2016: $1,394.37)
Property 4 Comment: My first full year owning this property, and it made a healthy return. If shit keeps going like this and no one steals the rent money, I might be able to clear $7,000 in 2018.
Total Real Estate Income for 2017: $10,853.74 (2016: $14,419)
Going back to my old blog and even on this one, I've always stressed the importance of mastering turnovers and preventive maintenance. One can easily type in "turnover" or "preventive maintenance" in the SEARCH BAR to verify (hehe). Anyway, I still believe that they're the most important aspects of property management, and the 2017 year end results are all the proof I need.
Due to the money spent on first-time renovations at Properties 2 and 3, I only made $10,800 in 2017. But take a look at Property X for a moment. Anita, with just one 2-unit property, made $8,700. I own FOUR properties and our year end results are comparable. How crazy is that? Property X had to deal with turnover in the upstairs apartment but, because I'd already done renovations there beforehand, the costs were low and the money flow kept rolling in. Property X's profits beat out Properties 1, 2, and 3 COMBINED! Let's make the point even clearer. Property 4, my shitty 2016 purchase which is a single family house, beat out Properties 1, 2, and 3 combined as well. So I think I've proven just how important it is to have apartments that have been renovated so that turnover costs are low. Low turnover cost equals much higher profits, to the extent that a single family house can beat EIGHT units in annual rental income.
Another lesson to take away from 2017 is the importance of having good and long term tenants. My only two properties that made over $1,000 last year just happened to be the two properties where I've had the same tenants year-round. Latisha, Belle and Sebastian, and even the Nepalis have been my tenants all year and pay rent on time every single month. It's the people that pay late (Gianna, Nicholas I, black couple from Property X, Thomas) that give the most issues, which is why I adopted my "two late payments a year" rule. Someone who pays late more than two times in a year is obviously having financial difficultly. In my experience, those difficulties don't go away and will eventually lead to eviction. So it's best not to play with them. Evict them, and then trust in the value of my apartment that I'll be able to attract people who are better and can possibly pay more. Having long term tenants isn't enough. They have to have a good track record of on-time payments, and those are the apartments that make the most money.
You know, I remember having so many plans at the beginning of 2017. I was gonna buy Property #5. I was gonna triple my rental income. I was gonna do this and that. But then came the tenant exodus. First it was Nicholas, then Tom, and finally Gianna. But thanks to the income from the good apartments, I was able to cover the costly renovations and get all the apartments rented out for higher prices. Looking back, I'm very glad it happened in 2017 while I still had the bank job money coming in. With most of the expensive renovations completed and a renewed desire to do my own repairs, I'm really looking forward to 2018 and whatever challenges come my way. After 11 years in this business, I should have the renovated apartments and the experience to finally make rental income I can be proud of. Just like I did last year, I'll toast to 2017. I didn't get what I wanted, but I sure as fuck got what I needed.
P.S.: REA John sent me a video of a recent walkthrough he did. The owner moved in some bums who didn't take care of the place. They didn't pay rent for four months before he finally took them to court. This was the result:
This is the reason why I feel 2018 is gonna be a good year. I had to deal with shit like this in the beginning of my real estate journey, when I believed the excuses of my tenants and let them dictate when they would pay me instead of the other way around. In most cases, tenants who pay their rent on time and don't give problems usually live and leave apartments in good condition, which lowers turnover costs, which raises the landlord's profits. It's good to know I can watch a video like that as a landlord and be entertained instead of nervous.
P.P.S.: I noticed that in 2017, I wrote the least amount of blog posts ever (52). In past years, I would spend so much time complaining and so little time finding a solution. Too many of those posts were long rambling rants that were fun to read, but left me empty at the end. In 2017 I made sure that every problem I presented had an easy-to-follow solution... and I like it like that. I think 5-6 posts a month will be my new normal.
Rents Collected: $13,700
Repair Costs: $3540.52 (2016: $4,832.89)
Water Bills: $335.43 (2016: $414.28)
Taxes Paid From Rent: $649.05 (Anita paid the rest out of pocket)
2017 Property X Net Earnings: $8704.12 (2016 - $8,928.85)
Property X Comment: Another good year for Anita. Four more years like this and she will have recovered ALL the money she paid for the place. I'm looking for at least a $9,000 profit for Anita in 2018, so I'll keep this in mind when doing repairs.
Property 1
Rents Collected: $16,800
Mortgage Payments: $9,996
Repair Costs: $676.28 (2016: $1,698.30)
Water Bills: $372.50 (2016: $453.45)
National Grid Bill Totals: $1,842.77 (2016: $1,983.09)
2017 Property 1 Net Earnings: $3,918.05 (2016: $2,427.16)
Property 1 Comment: Lower repair costs. Lower water bills. Lower gas and electric bills. It's easy to see how I increased my profit from year to year, but $3,900 doesn't seem like enough to me. I have to find a way to increase profits while maintaining the stability this property is known for.
Property 2
Total Rents Collected: $15,960
Mortgage Payments: $9,048
Repair Costs: $5,528.60 (2016: $2,372.21)
Water Bills: $477.21 (2016: $731.50)
2017 Property 2 Net Earnings: $977.19 (2016: $2,645.05)
Property 2 Comment: Once I got rid of Gianna and Nicholas, my water bills dropped significantly. With both apartments finally renovated, 2018 should yield great profits... even with turnovers.
Property 3
Total Rents Collected: $22,000
Mortgage Payments: $10,644
Repair Costs: $6,854.98 (2016: $547.65)
Water Bills: $762.10 (2016: $766.02)
National Grid Bill Totals: $3,847 (2016: $3,271.36)
2017 Property 3 Net Earnings: -$87.79 (2016: $8,881.15)
Property 3 Comment: Four apartments and I couldn't make a profit. This is sad. But this is also what happens when you leave an apartment vacant for six months. Had I done the renovations for Tom's apartment faster, I would have had more months of profit and a much better return.
Property 4
Rents Collected: $10,000
Repair Costs: $1,086.14 (2016: $3,362.68)
Water Bills: $169.06 (2016: $41.31)
2017 Property 4 Net Earnings: $6,046.29 (2016: $1,394.37)
Property 4 Comment: My first full year owning this property, and it made a healthy return. If shit keeps going like this and no one steals the rent money, I might be able to clear $7,000 in 2018.
Total Real Estate Income for 2017: $10,853.74 (2016: $14,419)
Going back to my old blog and even on this one, I've always stressed the importance of mastering turnovers and preventive maintenance. One can easily type in "turnover" or "preventive maintenance" in the SEARCH BAR to verify (hehe). Anyway, I still believe that they're the most important aspects of property management, and the 2017 year end results are all the proof I need.
Due to the money spent on first-time renovations at Properties 2 and 3, I only made $10,800 in 2017. But take a look at Property X for a moment. Anita, with just one 2-unit property, made $8,700. I own FOUR properties and our year end results are comparable. How crazy is that? Property X had to deal with turnover in the upstairs apartment but, because I'd already done renovations there beforehand, the costs were low and the money flow kept rolling in. Property X's profits beat out Properties 1, 2, and 3 COMBINED! Let's make the point even clearer. Property 4, my shitty 2016 purchase which is a single family house, beat out Properties 1, 2, and 3 combined as well. So I think I've proven just how important it is to have apartments that have been renovated so that turnover costs are low. Low turnover cost equals much higher profits, to the extent that a single family house can beat EIGHT units in annual rental income.
Another lesson to take away from 2017 is the importance of having good and long term tenants. My only two properties that made over $1,000 last year just happened to be the two properties where I've had the same tenants year-round. Latisha, Belle and Sebastian, and even the Nepalis have been my tenants all year and pay rent on time every single month. It's the people that pay late (Gianna, Nicholas I, black couple from Property X, Thomas) that give the most issues, which is why I adopted my "two late payments a year" rule. Someone who pays late more than two times in a year is obviously having financial difficultly. In my experience, those difficulties don't go away and will eventually lead to eviction. So it's best not to play with them. Evict them, and then trust in the value of my apartment that I'll be able to attract people who are better and can possibly pay more. Having long term tenants isn't enough. They have to have a good track record of on-time payments, and those are the apartments that make the most money.
You know, I remember having so many plans at the beginning of 2017. I was gonna buy Property #5. I was gonna triple my rental income. I was gonna do this and that. But then came the tenant exodus. First it was Nicholas, then Tom, and finally Gianna. But thanks to the income from the good apartments, I was able to cover the costly renovations and get all the apartments rented out for higher prices. Looking back, I'm very glad it happened in 2017 while I still had the bank job money coming in. With most of the expensive renovations completed and a renewed desire to do my own repairs, I'm really looking forward to 2018 and whatever challenges come my way. After 11 years in this business, I should have the renovated apartments and the experience to finally make rental income I can be proud of. Just like I did last year, I'll toast to 2017. I didn't get what I wanted, but I sure as fuck got what I needed.
P.S.: REA John sent me a video of a recent walkthrough he did. The owner moved in some bums who didn't take care of the place. They didn't pay rent for four months before he finally took them to court. This was the result:
This is the reason why I feel 2018 is gonna be a good year. I had to deal with shit like this in the beginning of my real estate journey, when I believed the excuses of my tenants and let them dictate when they would pay me instead of the other way around. In most cases, tenants who pay their rent on time and don't give problems usually live and leave apartments in good condition, which lowers turnover costs, which raises the landlord's profits. It's good to know I can watch a video like that as a landlord and be entertained instead of nervous.
P.P.S.: I noticed that in 2017, I wrote the least amount of blog posts ever (52). In past years, I would spend so much time complaining and so little time finding a solution. Too many of those posts were long rambling rants that were fun to read, but left me empty at the end. In 2017 I made sure that every problem I presented had an easy-to-follow solution... and I like it like that. I think 5-6 posts a month will be my new normal.
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