The Cash Flow Analysis for Our Rental Property (at Year End 2018)

It's time once again to do our annual rental property cash flow analysis. To see previous years, visit the link at the bottom of the post.

Twenty-eighteen was another challenging year for our rental property: 100% occupied (thankfully), new contract negotiations, and major water damage that ruined the wood floors!

If you're new to my recaps, this is property is our old personal residence – a Frisco, TX townhome we purchased in 2007 and converted to a rental property in 2012.

We bought it for $205,000 and put 20% down. We now owe $137,000 on it and the value is listed as $324,000.

We manage this property ourselves: listing it, vetting tenants, managing repairs, rent collection, and raising rent. You can now add 'dealing with a major insurance claim' to that list.. It's been a very positive experience overall, especially if you consider we're somewhat accidental landlords.

In summary, this year was our second best yet! Thankfully we kept our tenant through contract negotiation (we signed another two-year lease in June) and we were able to slightly raise the rate (woot!). Why? Because we had a major flood issue, had to make an insurance claim, and had to comp a month's rent because of the delays in repairs.

Other than the major repair, we had our annual A/C checkup and a roof leak that needed addressing. It was brand new when we purchased it in 2007 and we made no repairs last year so we were due for a few it seemed. And hey, at least we got brand new floors! We chose wood tile this time – super durable.

Cash Flow Analysis | Rental Property | Landlord | Real Estate Investment | Real Estate InvestingLet's look at the specific numbers:

2018 Cash Flow Analysis

2018 Rent Collected

  • 2,175.00 January Rent
  • 2,175.00 February Rent
  • 2,175.00 March Rent
  • 0.00 April Rent (Month of Major Repair)
  • 2,185.00 May Rent
  • 2,175.00 June Rent
  • 2,200.00 July Rent
  • 2,200.00 August Rent
  • 2,200.00 September Rent
  • 2,200.00 October Rent
  • 2,200.00 November Rent
  • 2,200.00 December Rent

Total Rents Collected $24,085.00 by check

Rents were solid this year other than the one month we had to comp. No vacancy (yay!) and we did take advantage of the new lease agreement to raise the rent slightly – just $25. Thank goodness we did, HOA dues are set to go up by $35 this year.

2018 Expenses Paid

  • $10,108.44 Mortgage Payments for 12 Months
  • 7,333.75 Property Taxes for 2018 (up ~$150 from 2017)
  • 2,100.00 HOA Dues for 12 Months (It's a townhouse, so this pays for lawn care, outside insurance, and the pool)
  • 1,001.22 Insurance (Condo policy through Farmers paid annually with credit card – rates went up because of a better policy and thanks to the claim)
  • 149.00 Repairs (Air Conditioning Check-Up)
  • 350.00 Leak Detection Service (we had a couple of small leaks that needed investigating – repairs were free since they were due to HOA negligence)
  • 10,805.00 New Floors (and clean up from flood damage)
  • (12,080.76) Insurance Proceeds (from flood damage)

Total Expenses Paid $19,766.65

Expenses got out of hand a bit. Thank goodness the insurance proceeds exceeded the cost of the floor repairs. The difference allowed us to absorb the increases in taxes, insurance, and that silly leak detection fee.

Total Cash Flow $4,318.35

Boom! Not too bad. I honestly thought we going to be much closer to breaking even this year. I think this shows that we're poised for a strong 2019 with the property. I wouldn't be surprised to see another $5K+ year.

Our cash flow through the years:

  • 2018: 4,318.35
  • 2017: 5,929.24
  • 2016: 1,933.72
  • 2015: 3,158.47
  • 2014: 2,104.44
  • 2013: 4,256.41
  • 2012: (53.93)

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What's next?

This next year I'm expecting to be a quiet one for the rental property. Our tenant is great and we expect that to continue.

We're planning on paying off our personal mortgage in 2019. Once that happens that will leave us with the decision to possibly pay off the rental property mortgage. Mrs. PT will want to, I know it. We'll see. But how cool would it be to turn this property into a $15k a year income source!

Do we plan on getting into more rental properties? No, not at this time. I've been putting a little money into PeerStreet (you can see my review here), otherwise I'm spending my time, energy, and on my businesses.

Do you have a rental property? If so, how did yours do this year? If not, have you ever considered it?

To see previous year's click show

The post The Cash Flow Analysis for Our Rental Property (at Year End 2018) appeared first on Part-Time Money.

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