I posted our September Cash Flow earlier this week and many people are interested in the details, so this is the follow up post.
When I was going through the details, I realized that I missed some big parts of the rental balance sheet, namely property tax and insurance (my editor missed it, too). We pay property tax once a year so it doesn’t show up on the monthly statement. We also paid a year of insurance in advance on the 4 plex and that doesn’t show up on the cash flow either.
Here is the real rental balance sheet. Unfortunately, it’s in the red this month.
|September cash flow||$2,840||$3,149||-$309.83|
There are some special circumstances this month for the 4 plex. We have 3 tenants right now, so it’s not full yet. One of the tenants is section 8 and the city’s portion of the payment will show up in October. Next month, we should see the rent go up to around $2,250 for 3 tenants. Also, you may notice the mortgage for the 4 plex was $0 in September. The first payment is in October, so it will show up next month. The expenses were also a bit higher than expected. About $900 out of the $1,465 was for repair, painting, and maintenance. That should come down soon after the tenants are settled in. There was some turnover during the short sale process and 2 of the 3 tenants just moved in.
Well, it’s not a great month for rental income after all. I’ll skip the tax deduction from mortgage interest, property tax, and depreciation, since I’m not sure how to calculate it into the monthly cash flow sheet. If anyone has any tips on how to do this, let me know. They are much easier to put into the yearly statement when I do tax.
Also, I already know October will be worse because we repaired the roof and the crawl space, and replaced a stove and a toilet. The goal is to get the last unit filled and finish the repairs this year. I think by December or January, things should start to look much better.
This is my 4plex projection for January 2012.
We’ll revisit in February and see if I’m in the ball park.
We had a mysterious $300 income in September and I finally figured out what they were. $100 was a refund for closing the 4-plex a few days later than expected so we didn’t have to pay as much interest. The $200 was from over payment on the insurance. I suppose this cancels out the -$310 negative cash flow from the rental income and we come out about even after all.
The rest of the side income.
$40 – credit card cash reward
$50 – Won from Yakezie 1st twit chat. This will go toward my first P2P account at prosper.com
$1831 – blog income
September was the best month for blog income so far. I think it’s a bit of an anomaly ,though because we closed two long- term advertising deals (12 month term) and they account for 70% of the income.
Another bad thing is that the income all comes from direct advertising. We made about $95 from Google adsense, but I won’t put that in the book until I receive the check. I really need to diversify our blog income structure and work harder on affiliate income. It would also be nice to raise the Google adsense income to at least a few hundred dollars a month. That will take time though.
That’s a wrap for September. Thanks for making me go through the details. Hope this won’t stop anyone from investing in real estate. Blogging is winning at the moment, but I think rental income will come on strong in a few years as rent goes up. That’s why it’s called a long term investment. 🙂