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Tax time, goals and sharing the 'Homes budget'

January 31st, 2017 at 04:17 pm

Hi all

Today is tax day for me. I am figuring out and gathering all my tax documents for me and the rentals

i also need to gather the not for profit tax info

I lost $28k gross income to my bottom line by closing the not for profit

This 5 year journey has been a wild one.my first 2-3 years were very tight. I had a good year last year and now I am Very tight again

I updated my financial goals to the left there for 2017. Those are highlevel goals. I will track monthly and set some mini goals to get to those larger goals

I continue to be off track (per my 5 year goal) towards my personal residence payoff with no clear ideas or plan on the horizon to make that up

I am also short with investments (primarily because I bought more homes) with no clear plan on the horizon to make that up

I want to formulate clear plans to make those gaps up and I really want to put together a plan to make $1000/month more income by March 1

I am putting in 25% my 401k now through the end of June. it makes things pretty tight but my contract only goes through the end of June.

Anyway I am sharing the homes budget for next year. Vacancy, maintenance is estimated based on #s from prior years and then rounded UP. Net assumes homes are paid off. They are not paid off yet. Payoffs start March 2018. . My payments exceed $7500 a month right now. I DO plan to use any extra net from the homes this year to build up the 'rental emergency fund' so not drawing anything from the rentals yet and hoping for no large expenses. I am not planning on any improvements this year

Budget attached. Red means rent is Section 8.

I will be posting more this next few days as I get caught up

3 Responses to “Tax time, goals and sharing the 'Homes budget'”

  1. AnotherReader Says:

    I suspect if you were really getting $9806 per month, things would not be so tight. My guess is that besides the mortgages, the expenses represented by repairs, maintenance, and capital improvements have greatly exceeded 6 percent. Plan for some capital improvements, because they are going to happen. I'm dealing with an unexpected sewer line replacement right now.

    Paying off your personal residence will likely have to wait until the rentals are free and clear. You may be able to reduce your work to shorter term contracts with time off between contracts or take a less demanding salaried position when the rentals are paid off and still deleverage your residence. Achieving your pay-off goal is only 17 months away. You are almost to the finish line!

  2. rachael Says:

    You are right. Right now I am netting even or slightly under what I need as I have 2 of the 3 units vacant and one half of the 2 unit vacant and am paying the costs to fix up the new homes. For me to rely on the income I need to have a big enough rental emergency fund and just cash account to weather the swings and get things reliably rented. Lsat year I was still throwing out people from the last management company.. At least I do not have to put into the homes anymore (stopped that on year 3) and can pay alot of improvements cash. I have not budgettted in improvements at all and will figure out what they may be and change my budget and do so. I think I figured I would just grow the emergency fund to $25k and pull it out of there and pay it off from the net I get (which will exceed my monthly expenses). I am still tallying last year so it will be interesting to get last years true #s. I bought a 2 flat and I believe 2 homes last year so the larger net figure represents current not the past 12 months. Onward! I DID track my real net this year and will share that in another post..thanks for the continued support. by the waySmile.. oh my feeling of 'being short' is more on the personal side because I lost all my 'extra' income and now need to budget strictly and with such high mortgages on the rental side I feel nervous.

  3. rachael Says:

    I decided to raise my maintenance to 12% but will look at #s from last year. Raising it up so high will much reduce or eliminate the 'swing' issue as (once paid off) I will only pull out the estimated net and will just save the excess maintenance budget month to month so I can pay for even larger capital improvements cash vs being so reliant on the rental emergency fund and pulling from the rental emergency fund and then having to pay that back.

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