Got news on the section 8 rent increase on that house I was going to sell. I got $50 a month increase but they say to apply again next year. I was hoping for a $100. I would get more if I had a new tenant but my current tenant .. her kids all moved out so she is on a 'smaller voucher' .. she has a 2 bedroom voucher vs a 3 bedroom so section 8 is limited. The house is a large 3 bedroom.
Still a good increase..especially for no work and got $50 more. We will try next year and hopefully she stays but if not I can repaint, do fix up and expect to rent it for probably $1200 or more.. current rent WITH INCREASE is $1075.
Rent increases so far this year are $110/month
Archive for April, 2016
2 flat closes Friday. 14% cap rate..
Got 2 renewals at the 3 units and 2 people moving 5/31
Got 1 sudden move May 1 (or this weekend) at a house . I will look to turn that around asap. We get keys this weekend
My goal was to raise rents (across all units ) by $600 this year. So far we are at $60 and got room to raise for the NEW tenants at the 3 units (start them at $50 more hopefully) and then at the house that is vacating ...hoping to start people at $100 more if I got section 8 or maybe $50 more if I do not. and still waiting to see if I get a rent raised on that Section 8 house I decided to keep. Hoping a lot more people STAY this year so we are using our judgement when we raised rents on existing tenants (we had alot of turnover in homes last year)
Still on track with all the fix up work Should have that paid off by June 15 and back to $15k emergency fund. Hoomes with new siding and roof and landscaping and driveways look great. Doing the fix up work took a dent out of my monthly savings for April and will impact May as well.
Those fix up items were my last big items this year.. now costs will be limited to general maintenance and rental turnovers
Exciting to see how I turn out this year with my total nets..
looks like I will close on that 2 flat at the end of this week (hoping so). had to get a new attorney (seller side) the attorney got sick and file was dropped.. we just ordered title Friday.. anyway hoping
The work on the homes looks great.. 3 driveways (where there were none), roof and siding and major seeding where yard got ripped up due to prior foundation work
I have money or credit for all of it
tax refund came in at $9200 and I am setting up with an attorney next week to figure out ways to save on taxes next year
I owe my rental emergency fund $13990. Entire $9200 will go towards that and then I have approx $4500 in repairs on a card that need to be paid off (linked to the large repairs). I will pay that off next month which leaves me with about $5k left to replenish the emergency fund with. That should take one more month
The only other large items I want for the homes are siding the 3 units (not a need and not scheduled but they have really old siding). Quote is approx $13k
One of my tenant suddenly got custody of their kids (the dad) ex wife ill or something so he is moving out immediately to a large home. the property manager is taking his security and letting him know he is on the hook for rent until we find someone else. Hopefully that will be soon. I predict carpet clean, paint and clean with not a lot of fix up. Manager thinks he can get $65/month higher rent. the guy is predicting he will be out next week or mid the week after. We will see. Home will be advertised as soon as this guy gives formal notice (expected Monday). and I have already notifed my 'crew' of paint/fix up guys
Got 2 move outs end of May (at the 3 units)
I am really keeping track of vacancy and 'time to fill' and 'cost to fill' this year as I near the time when these homes will be paid off
I paid $985 to an attorney to do a wage garnishment suit against that one tenant from last year. he works for the gas company (so good candidate for this) and I am trying it out. I have never pursued wage garnishment, bank levy before. $985 is my total cost and they add that and more on to the tenant balance. It would be great if that worked out and was a viable option for me. If it does not I have learned a valuable lesson.
So far NETS from homes have been the following (net of everything-EXCEPT the large $22k repairs which are funded from a different fund). I think I will expand my repair fund to $20k and keep it at that. Another goal for this year. I get section 8 on the first and the rest averages around the 18th
FIguring out vacancy and time to fill and time to fix up will be key to be determining or feeling good that this imcome (or whatever lower amount of this I decide) can be counted on monthly. I allocate $15,200 in the rentals yearly budget for repairs AND vacancy (vacancy covers the costs associated with lack of rent, fix up to turn a unit over, and property manager extra fee to fill). I will see how that figure lines up with actuals this year
Approx monthly nets so far this year (IF homes were paid off.. which will happen 6/2018.. currently all overage goes towards paying the homes off)..
My budget calls for an average of $6500 a month.
Just some questions here and throwing them to the group
Dad has approximately $632k
He is 76 and in a Memory Care center
Costs average $7100-$7200 a month. They increase every year (have not seen the first year increase)
He has no other real costs (misc here and there)
Netting his ss, medicare and this facility cost he has a negative cash flow of $6300 a month
I am the power of attorney for finances and medical
His funds are making less than 1% right now and I made the decision not to invest them at all so they just sit. I did this because I am not sure Dad has alot of time left (alzheimers) though he might.. unclear. Average stay where he is at is 2 years and the facility felt that was a good estimate. unclear.. he was declining steadily. recently seems plateaued?
All funds are in trust (3 kids as beneficiiary)
IRA has 3 kids as beneficiary
I take the RMD each year and then every so often replenish his normal checking account with $30k
Any suggestions for other things I should be doing with the money
Dad does not have long term care insurance
All rents in. I am SO THRILLED with this new company. They enforce late fees. rents come in sooner. I am hoping for less vacancy and faster filling of units (I will decide if that improved by year end but I think it will)
Tax results today. My accountant says betweeen $5-10k and was going to work on them again.. Appointment is at 10am.. So fingers crossed for the 10k figure. I took out $14k from my $15k emergency fund for rentals to pay for the siding, roofs, driveways, seeding work. Good investment I think. not done yet. the rain/snow has delayed things. That is ok with me as it gives me more time to pay. My tax refund will go towards that and then predicting 2-3 months to rebuild my fund up
Suburban rust fix should be done TODAY. excited to see it. again I was referred to a long time client of my accountant so I am sure it will be done right or fixed if not. no one wants to make their accountant look bad.
I looked at my #s again and not sure what I wrote before but I fixed an error in my spreadsheet and hre is what it is
IF the homes/units were paid off I would have made the following
Last year I actually got LESS RENT than 2014 I think due to vacancy poor management . just nightmares. The only reason my net was more was because of less repair costs
2014 was my big fix up-repair-improve year
and this year I am targetting $60k This year before the subtraction of the $22k improvements (which will show this month) I was at $18k net for Jan-Feb-March. this subtraction will take it down to negative and then I have April thru end of year to make that back up and reach $60k. I get rents deposited on the 15th of each month
I really want to get it up to $70-80k a year..
Next year will try for higher.. key factors are vacancy , repairs, time to fill vacant units
Thrilled with new managment company. bringing me to new heights and making me see and think my 5 year goal can be a reality
Literally I am starting to wonder. hey should I do a career change, take some classes.. feels like the world is opening up.. investigating hobbies.. all of that
Hope to hear on that Section 8 rent increase this week or early next. This is on that home I was going to sell then got some advice from here and others and decided just to keep it. it is fixed up, rented, new manager says it will not be hard to rent. so why not keep it.. and if I can get a rent increase of $100 or more with the current tenant .. even better!
I know I am not at June 2018 yet (5 year goal end date) and there are still upcoming challenges but it feels like I am OVER THE HUMP and no longer climbing the mountain but managing my way downward.
I did more research, talked to some folks, went for estimates outside of the town I live in etc.. and got referrals. Looks like the rust is not too gone to fix (at all). So I am likely for $825 going to have the areas repaired by welding in new metal and on one area just grinding down, treat and paint. No one appears to warranty rust but they say the spots are not bad at all and should last a few years... they are also not near wheel wells or ongoing wet areas.. if it reoccurs they will fix for 50% of the cost
So I will drop the car off Sunday and go ffrom there
Still thinking of going down to 1 car at some point
Spoke to my accountant too who mentioned my contract ending in July and the possibility of gas prices going up.. he actually thought I should keep the Genesis as it runs well, very good car and too much is in flux right now so avoid making big decisions
The rust guy fixing this is his 20 year customer and gave me a special price.
Also my refund is WAY down. we are at $5-6k right now.. accountant is working #s seeing what more he can do if anything
I just signed up for all these large repairs/fixes so for the next 3 months likely will just be getting the rental emergency fund up to the normal of $15k
SO happy I got my cash back card limits up.. they are at $9k (still want them higher) but it is enabling me to get some $300 off the work with cash back credit and delay payment until May on some of it to allow me to earn some more money. The rain is delaying some work too so that is good. I get rents on the 15th.
MY FENCE IS UP (love it)