Quarter 3 - 2019 - Rental Property Report

Q3 2019 - Rental Property Report

If you need basic information regarding this report, make sure to check out my post on this property and everything associated with the raw data numbers. This report only covers the Q3 numbers in summary form. You can access that post by clicking here.

In these reports, I am going to share with you some high-level numbers as well as what my thoughts are for any given period of time. These are actual results, not theoretical. Each report will consist of TWO sets of numbers. The first set of numbers are the TAX numbers. The tax numbers consist of actual write-offs and net income after considering the tax code. This is important because taxes will be based on this number. The second set of numbers are the CASH FLOW numbers. These numbers are what is left in my account after I’ve paid everything related to the rental property.

These two numbers are important because the tax numbers will tell you how much in income taxes you’ll have to pay and the cash flow numbers are what goes in your pocket at the end of the day. You want your tax number as low as it can, but the cash flow number as high as you can.

So let’s dive in:

Time Period: Quarter 3 - July 1st, 2019 - September 30th, 2019

TAX NUMBERS

Total Revenue: $2,250.00
Interest Revenue: $8.20
Depreciation Expense: $(722.58)
Interest Expense (Mortgage): $(833.13)
Property Management Fee: $(225.00)
Lawn Care: $(180.00)
Primary Mortgage Insurance: $(308.10)
Repairs and Maintenance: $(147.31)
Net Loss: $(157.92)

CASH FLOW NUMBERS

Total Revenue: $2,250.00
Interest Revenue: $8.20
Mortgage Payments: $(1,913.58)
Property Management Fee: $(225.00)
Lawn Care: $(180.00)
Repair and Maintenance: $(147.31)
Cash Flow Positive: $(207.69)

Saving Account Balances

Repair Fund: $2,423.09 ($2,175 in CDs and $248.09 in Savings)
No Renter Fund: $1,315.73 ($1,174.67 in CDs and $141.06 in Savings)
Mortgage Excess Account: $411.03 (Excess just in case)

Personal Funds Invested

Funds added: $0.00 (Q3) & $2,286.98 (YTD) (Purpose - Repair Funds and No Renter Funds)

Commentary

As compared to Q2, this quarter is one was pretty standard and normal except for a repair that I had to pay for (more on that later). As far as Net Loss is concern, I did better this quarter as compared to last quarter because I didn’t have a lot of once-a-year expenses. In Q2, I had property taxes and homeowners’ insurance due. That wasn’t the case in Q3. I did have to pay for primary mortgage insurance, but again it was an expense because it was paid in Q3, however that amount is included in my mortgage each month to the bank. (So really, my bank has been holding my money and then pay the expense in the late summer).

I did have a repair expense to deal with this quarter, however, the repair was really due to me, not the renter. When I first moved into my home, the previous owner put in a self- locking doorknob in the back of the house. Honestly, it wasn’t the proper doorknob for an exterior door. Well, when I went out that door my first week of living in the home, I forgot my keys on the kitchen table and the door locked behind me. So in order to get back into my home, I had to actually break a window to get back in. Of course, as a new homeowner, I just boardered the tiny hole in the window and left it alone. When I left Kansas, I told my property manager that she could fix it up if she would like. Well, it took a year, but it got fixed and I paid for it through my maintenance account. I didn’t mind that, that was totally my fault.

The great thing about this quarter was I didn’t have to subsidize much of the expenses for this home. Well, technically. The way my personal budget works is that I subsidize the rental for over 9 months rather than 12 months because I only get 9 paychecks a year from my regular job. So by the time Q3 came around, I’ve already subsidized the rental and Q3 I didn’t need to put in any investments into the property. If you haven’t read my other blog post, I do need to subsidize the rental property because the rent alone doesn’t cover any potential repairs and no renter funds that I have set up. So in order to do it properly, I have to kick in between $150 - $250 per month for 9 months. This is why I have a fund for Repairs and Maintenance and No Renter. I will continue to grow those two funds until I feel adequate that we have enough (probably never for the repairs and maintenance and once I get to 1 year of no renter or I’ve paid off my mortgage).

YTD Numbers:

Tax Loss - $(903.38)
Cash In-Flows - $(89.80)

Year to date isn’t good, but basically what I am seeing is that I had to put $89.80 to keep my investment going. However, remember that every mortgage I pay, I am earning equity in the property and the property value is rising (the area is not known significant increases in property value) .

Summary

All in all, I know that this rental property is not the ideal property to have from a financial gain standpoint, however, the renter is covering the mortgage for the most part and I haven’t had huge financial cash outflow in the last 15 months.

Until Q4, see you later.

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