The rent collections were stellar as always, and the rental cash flow is solid. All 24 of 24 rents were in the bank by 11/3, which was the first Monday in November. If you look back at my previous reports, you will see this is typical for me. I can attribute it to having the ability to screen tenants and use credit score to my advantage. I have solid units, and they are priced right. Landlords that do not use credit score as a screening tool, and do not understand the significance of it, are fooling themselves. They are either working too hard, or not making as money.
Rental Cash Flow
I still have one vacancy and have started to advertise it. Responses are a bit slow, and I finally got a few pictures up on the ad. I have showed it once, but at that point I did not have any kitchen counter-tops installed. I still have a bit more finishing touches to add and hopefully get it rented soon. I am charging a bit more rent than the previous tenant, but I will be more profitable more due to the higher tenant quality than the increased rent. I advertise at a lower price, and include a fee for all utilities. It keeps the price competitive, and still has the total amount.
I did have one tenant that pays the rent in cash and was $25 short. The family has excellent credit scores, and solid income, but he withdrew the rent money from the bank, and only took out exactly enough to pay rent. He wife was called into work on the weekend, and borrowed $25 from him to buy lunch and whatever. So, he had to suffer the wrath of me, or the wife. I lost. I showed up shortly after he gave her the $25, and he was short. I had to get it the next day, but since my truck was at the dealer for a couple of days, I had to wait until Thursday. No worries from my end though, and no late fees.
If I was worried he actually did not have the money, things might have worked out different.
My Tenant has Declared Bankruptcy
One of my tenants has declared bankruptcy. It is a tenant that is sometimes late on rent, if you look at my previous reports, you can see which one. I inherited the tenant, and she is a great person, but would likely not pass my current background checks. Remember, doing a background check is not about excluding 100% of bad tenants, or including 100% of good tenants, it is about reducing risk. I exclude good tenants on a regular basis, they are just more risk than the better quality tenants I prefer to undertake.
Since this tenant was current on rent, I was not too worried about losing money in the bankruptcy process. If she was behind, I would be more worried. He rent was paid prior to the hearing, so I am even caught up prior to the case for the entire month. And, she did tell me that I was excluded from the bankruptcy. As long as your tenants do not get behind on rent, a bankruptcy is not a problem.
Rental Maintenance Log
I have started a maintenance log. It is going to be a bit difficult to maintain, but as long as I remember to log my tenant calls, it will show how much work goes into a rental property. If you are debating on managing a property for yourself, or get tenants, this should give you an idea of what it takes.
I have posted a few entries here, but may eventually put a separate page, or post, regarding the maintenance that is required for 25 rentals.
| Date | Problem | Resolution | Cost |
| 28-Oct | Sink leaking. It was the sink basket that needed tightening. Fixed, but may need new plumbers putty at another time. | Tightened sink lower nut. | 0.00 |
| 28-Oct | Tenant said they had two broken drawers. One in the vanity, one in the kitchen island. | Fixed drawers. | 0.00 |
| 4-Nov | Tenant complained that furnace ‘clicked’ too long, he smelled gas and Co Detector went off. Also, the dryer does not spin anymore. | Cleaned furnace burners. Gave a new CO detector for peace of mind and to double check the issue. Dryer to be repaired at a later date. | 125.00 |
| 4-Nov | Tenant complained about heat not working. | replaced thermostat | 20.00 |
| 8-Nov | Tenant complained toilet cloggs frequently. Wants me to look at it. | This is likely a toy or pencil that was flushed. It is a tenant issue, not a landlord issue. |
How a $1 Coupon Cost Me $50
I had to pay an auto help guy $50 to unlock my truck. I went to Arby’s for lunch one day while working at my rental. I had several coupons, mostly for deals that saved ~$1. I am always game to save a dollar. After I parked, I turned the truck off and looked through the coupons. I picked one out, got out of the truck, locked the door and went in to eat.
When I came out, I realized my truck keys were in the ignition. I have never done that, and I did not have a spare key. So I had to make the call to get assistance.
My truck’s back sliding widow had a latch that came off the window several years ago; it has been unlocked for well over five years. About a month ago, I decided to glue the latch back on the glass, before it got too cold to do it. If it wasn’t for that fix, it would not have been a big issue.
Rental Renovation Almost complete
A new furnace was installed last month, along with the kitchen cabinets, tub surround, flooring and appliances. More pictures will follow.
Unanticipated Truck Expenses
My 2003 F350 diesel truck was having a hard time starting recently now that it is getting a bit colder. I had to jump it one day, due to cranking on it for so long. I figured that it was a glow plug issue, or even an injector issue, and I was right. I just did not know it would cost $2,557 to fix it. It appears to be running fine.
I did save some money by cleaning my K&N air filter myself, saving probably $50 for a dealer to replace it. I also replaced my serpentine belt, saving ~$140. Both items being changed should make the truck more reliable. Both items took about 30 minutes total to complete. Cleaning the K&N filter took the longest time.
New Truck in 2015?
My 2003 is starting to cost a bit of money to fix,. So far, it’s only ~$300 per month average, but that builds up. A new truck is ~$42,000, and will be a write-off, but the best tax write-off is not to spend the money in the first place. Spending $100, to get $30, doesn’t make sense.
Other Major Expenses
Property taxes were due on 10/15, and were paid on time. That was $9,554 in non-normal cash flow, as it only happens two times a year. I budget for it, and have enough cash flow for it, it they are never fun. I also had a property insurance due for $1,351. I paid the last installment for my siding of $1,500. I had delayed payment for a bit as the contractor did such a miserable job. Water bills are paid quarterly, which was this month, for a total of $1,820 on seven buildings. Of course, there are HOA dues, electric bills, gas bills, etc.
Despite all of these ‘extra’ expenses, the rentals still cash flowed, just not to the tune that I prefer and have in other months. Some months the money flows out like crazy, but it does flow in even crazier.
Retirement Date
The retirement date is still on target. The stock market performed nicely, and I was also able to save just a bit of funds. I paid down my HELOC that I used to pay off my mortgage; the balance is now $18K. It started at $50K in mid-August, less than 3 months ago. It will be wrapped up before the end of the year. At a 1.99% rate, and a balance of only 10% of what I had for a mortgage, I am saving quite a bit. It’s hard to see it now as I have had a lot of expenses recently. Cash flow is king when you retire, not leverage.
I have mentally planned a 60+ day Alaska RV trip for the summer of 2017. All I need is an RV and time to go… I am planning on purchasing a 5th wheel rig sometime in 2016.
Love the articles on land lording…I think you do a great job on providing insight that people need to know about before they attempt to purchase property themselves. Most people make it out to be a side gig and seem easy. You do a nice job of pointing out the knowledge and true amount of time needed to be successful.
Great job and keep up the interesting posts!
Thank you for the comment!
It’s not all fun and games, but with solid tenants, you can take much of the risk, and much of the work, out of the picture. Some landlords are still out there going by gut feel, and the the source of many landlord horror stories.
Oh, RVing and Arby’s ~ 2 of my favorite subjects! 😛 As for the rest of the article, that was really interesting too! I love how detailed you are about the cash in-flow and out-go. On a weirder note about that toilet, when I was really young (and really dumb) I tried to flush a stick of butter down the toilet. As you can imagine, the toilet plugged, big time. I lived in an apartment at the time and was extremely embarrassed when the maintenance guy came and I had to admit it. I guess I thought it was food, so it should flush. It was a long way to the dumpster, I didn’t want to go out in the dark, and I didn’t want my trash to reek by morning. What a goofball. Anyhoo, love your posts. It’s really interesting to hear a landlord’s take on things! 🙂
Thank you for the comment!
I have been studying the RV thing for a while now, and am still a year+ away from a purchase. I can see my self full-timing, not for the savings (if any), but for the adventure.
I hope the toilet thing is that simple. I have had pencils and a happy meal toy in the toilet. One caused a new toilet, one I just had to remove and get the pencil out. After I tipped the toilet over, I saw the pencil right away.
Me too on the adventure thing. I’d love to do it full time. That way if the weather isn’t to my liking, or perhaps the neighbors, I can just gas that baby up and off I go! 🙂
Hope you get the “easy” toilet problem! Even if it isn’t a dumb adult, kids can put the weirdest things in there!
The tenant did text me back. The toilet is working fine now. Maybe it was a stick of butter that finally went down the pipes.
HA! 😀 Too cute!
Interesting! Bankruptcy would have freaked me out, but you’ve got a point…as long as they can still pay their rent.
If they had not paid the November rent heading into the bankruptcy, I would have been a lot more concerned. Once the bankruptcy date is passed, all new debts are theirs (I think…)
I like how you break it all down so people can see what it’s really like to be a landlord. Thanks for sharing!
Thank you for the comment Kayla!
It’s not too bad, but there are a lot of things to do as a landlord, if you do them yourself. You can hire out the work, or retire early. I would rather retire early.