My real estate portfolio currently consists of 6 rental units. The monthly reports highlight the income and expenses associated with each property as well as the total monthly profits or losses.
Total Income: $5,000 – Ahh, if only that was all profit. Now for the expenses.
- Mortgages / Loans: $2,913
- This number should remain the same throughout the year.
- Repairs: $0
- Utilities: $0
- Insurance: $196 One property had a separate insurance policy due to the tenants owning a Pit bull. This was an insurance nightmare, so I would highly recommend avoiding renting to owners of this breed at all costs. Long story short, the dog passed away, so I was able to add this property to my existing policy, saving over $400 per year.
Monthly Cash-flow: $1,891 (this is a pre-tax number)
But wait, there is some more hidden profit. Where you ask? The portion of the loans applied to the principal is a hidden profit, to be realized upon selling the property.
Hidden Profit: $732
Total February 2017 Profit: $2,623
Total 2017 Profit: $4,187
Monthly Average Profit: $2,093.50 – This is an important number, as it will smooth out the fluctuations caused by insurance bills, taxes, repairs, etc.
Overall, February was close to a perfect month with basically no extra expenses. As we approach spring, I will have several tax bills that will need paid for my properties that don’t have escrow. I paid to have my yearly taxes prepared in March, so that will be another expense. I also have a porch scheduled to be sanded and repainted, which will occur sometime soon, now that the weather is warming enough for exterior painting.