All has been pretty quiet on the rental front. Our tenant is paying on time and reporting no issues. Be sure to scan the real estate category of this blog to see our history with this rental property.
Today I thought I’d share the cash flow analysis of our first six months (ending December 31, 2012). We moved out of the townhouse (aka purchased it for rental on July 1, 2012). We rented it out on August 15, 2012 and have maintained the same tenant.
Cash Flow Analysis
Rent Collected
$500.00 Holding Deposit
387.50 August Rent (prorated, less holding deposit)
1,775.00 September Rent
1,775.00 October Rent
1,775.00 November Rent
1,745.00 December Rent (less tenant repairs)
Total Rents Collected $7,957.50
We also collected a $1775.00 security deposit, which I’m not including in my calculation. Those paying attention all along will notice that my rent is $25 higher than I previously estimated. So that’s a win.
Expenses Paid
$5,054.22 Mortgage Payments for 6 Months
1,602.71 Property Taxes (pro-rated for 6 months)
1,069.00 HOA Dues for 6 Months (includes $19 in late fees)
210.50 Repairs Before Move-In
75.00 Repairs After Move-In Inspection Form Completed
Total Expenses Paid $8,011.43
I didn’t make an insurance payment in the last half of 2012 so that didn’t pop it’s ugly head up on this report. But it will for the 2013 report, of course.
The late fees on the HOA dues are of course a pain in the rear. My fault totally there. For some reason when I switched the payment coming from Capital One 360 to Chase (where our real estate checking account is), the HOA company didn’t like the payments. I’ve since corrected the issue, but due to some negligence I’m out the $19. Oh well, could have been worse I guess.
Total Cash Flow -$53.93
I’d say we made it through the first six month period quite nicely given that we didn’t have a tenant for one and a half months. I’ve got my current tenant on a two year lease so we should have a solid 12 months of rent to collect in 2013, with roughly the same expenses (plus, the insurance I mentioned above). The report for 2013 should be cash flow positive in the $2,000-$4,000 range.
As a bonus, the tax loss on this property is going to be pretty substantial for 2012 with first year depreciation and all of these expenses to include. It should end up helping us quite a bit in reducing our taxable income. I look forward to sharing that report with you soon.
What are your thoughts on the cash flow report? Does this make you more or less interested in buying a rental property? Do you think I have a good investment on my hands? Or do you see it as a wash, and better than having sold the place for a loss?
About Philip Taylor
Hi, I'm Philip Taylor. I'm a husband, father, blogger, and entrepreneur. I love learning to do more with my money and sharing it all here with you. Join in on the conversation and start improving your financial life today. 