My Monthly Cash Flow Report – May 2016

Welcome to my May 2016 cash flow report!

Each month I document how my rental properties (RP) are performing in order to track my monthly cash flow. I share both the good and the bad, as well as any lessons learned from investing in out-of-state rentals.

For these income reports, I’ll report everything as they occur. That means if no rent came in, there will be a big fat zero. The same goes if there were no maintenance issues for a given month. This is different from when I analyze a potential property that I’d like to invest in. Where in that case, you’d always see some estimated maintenance expense, as well as a vacancy loss, capex, and more in order to appropriately determine my projected cash flow and cash-on-cash return numbers.

Without further ado, let’s jump into this month.


Here’s the roll up cash flow summary for rental property (RP) #1.

Rental Property #1 Cash Flow

There were a few maintenance items totaling $157 which included:

  • Annual spring cleaning and prep. Actually happened in April, but I didn’t get charged till May.
  • Replaced screen on screen door as well as the hand rail.
  • Drop ceiling repair which was easily fixed with some screws and wire.

Other than that, May was pretty ordinary for this property. I didn’t spend any time managing the manager so that was big plus.

May’s cash flow was truly passive at $363.


This property had some good news and bad news.

First, the good news

Remember April’s cash flow report? I had a tenant who moved out and it appeared that they were going to skip out on paying their early lease termination fee. Well, to my surprise they deposited a full rent payment for May! This was music to my ears!

So on top of the $1200 security deposit we were keeping, we actually got a month of full rent paid as well!

Now the bad news

It’s a good thing the tenant paid for May’s rent because this property is still vacant. We’re hitting 4 weeks! This has been a big surprise because of the location near some great schools (we’re talking 9’s and 10’s). Just as surprising, the property manager reassured me back at the end of April that this one should get leased really fast.

Rental Property #2 That Produces My Cash FlowWell…. I’m still waiting.

There has been quite a few showings and the response has been positive. The only complaint received from one potential tenant is that the basement is not finished. I’m okay with that. To be honest, Kansas City got a ton of rain in May and a little bit of water actually got into this basement. This turned out to not be a problem since it’s unfinished. Had it been finished though, I could of been faced with a fair amount of repairs.

We also dropped the rent from $1295 back down to $1250, which is what it was renting for the past year.

Another idea to attract more quality tenants that I’m considering is to paint the exterior. During the initial rehab over a year ago, we had only painted the exterior trim. Painting the entire exterior would definitely brighten up the house and also help prevent future wood rot. I hate to drop $2-$3k on paint, but if that will get a tenant into this house sooner and possibly at $1295 then it might be worth it.

What do you all think? Is that exterior looking like it needs a new paint job?

So here’s the roll-up  summary for May.

Rental Property #2 Cash Flow

As you can see, the income was strong this month since we still received $1250 rent from the tenant that moved out in April. On top of that we kept the $1200 security deposit. There were some turnover costs that included lawn care (twice during May), a couple window blinds needed to be replaced, and overall cleaning to get the house prepped for showings. Lastly, a $5 utility bill that I had to pay since this house is vacant.

Net cash flow for RP#2 for the month of May came out to $1,342.


Net cash flow from both properties: $1,705

It was a strong month from a cash flow perspective. Though this was unusual since you don’t normally expect to receive double rent payments or in my case, rent + deposit. This month, I hope to have a new tenant placed into RP#2.

Lesson Learned

I think it’s very important to keep in mind that I have a property that’s vacant for 4 weeks. This property is considered a solid B+ property and it’s still vacant!

Let’s recap all the positives as to why it should have been rented quickly.

  • Great owner occupied neighborhood
  • Nearby schools are the best (ranked 10 out of 10)
  • $1250 rent is lower than Zillow estimated rent Zestimate of $1300 (see below)
  • 3 bedroom, 2 bath home built in the 90s and conforms to what you typically find in the neighborhood
  • Listed during the busy season (i.e. spring to summer)

Zestimates - Cash Flow

Despite all these positives, this property has been vacant for 4 weeks!

I’m very surprised, but not too concerned. Why? Because I ran my numbers assuming 4 weeks of vacancy.

Before buying a property, I did a cash flow analysis and included a vacancy factor. I assumed 8% (1 divided by 12 months) of annual rents would be lost due to vacancy. That’s 4 weeks of vacancy even though this property was in a top notch neighborhood. 4 weeks despite my property manager sharing that for this neighborhood, properties don’t sit vacant for longer than a couple weeks.

The lesson I’m taking away here is to stay conservative. Even though I’ve got a B+ property near awesome schools, it can still sit vacant for 4 weeks during the spring time. That means, whenever I’m running numbers on an investment property, I gotta stay conservative. Assume 4 weeks of vacancy. Even if I’m told by an agent or property manager that vacancy rates are about 2 weeks.

Isn’t that too conservative? Maybe. But you’ll be glad you did if that property sits empty for a month. And if it gets filled sooner, then you’ll be happy regardless.

For me, with RP#2, I just hope it gets rented soon.

The clock is ticking. That paint job should help right?

4 thoughts on “My Monthly Cash Flow Report – May 2016

  1. Phew! It’s nice when the tenants actually follow through on their promises! 🙂

    The paint job will probably help a lot. When I zoomed in on the picture, I could see that the paint was kind of patchy, and it looks like a peachy beige, which clashes with the red shutters. I would choose a nice light/medium grey, and with the red and the lighter trim it would really pop. I used Behr’s Pewter Mug (770E-3) and it looks amazing on the outside of my building.

    If you don’t like grey, you could go with a tan/taupe color. But I think the paint will make prospective tenants feel like you care and like they’re moving into a newer property.

    • Thanks for the paint suggestion! I’ll definitely look into those colors. Personally, I do like that Cape Cod look with the grey and red or white shutters. Though from what I remember, none of the houses in this neighborhood use grey paint in any way. They seem to mostly be light colored and a few just have a brick exterior. I’ll have a closer look and do some more research since I’ll be out there next week.

      Update! We got a great application in just yesterday! I’ll probably still look into painting the exterior, but at least now I can at least breathe a small sigh of relief.

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