My Monthly Cash Flow Report – August 2016

Cash Flow

Welcome to my August 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 conservatively determine my estimated 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.

Cash Flow

August rent paid! As of September, this same tenant will have been living here for 2 whole years! In the last year, however, this tenant has paid lately probably 6 or 7 times. Sometimes they’re just a few days late, other times it’s been a week, and on occasion about 10 days. I’m not gonna lie, every time the rent is not paid by the 1st, I get anxious.

Despite their lateness, in the nearly 2 years that this tenant has been living here, there has not been a single lost month of rent. After 23 months of living there, we’ve collected on all 23 months. Sure they’ve been late a handful of times, but at the end of the day, they keep making their payment so I’m happy for now.


The following maintenance items occurred:

  • Hot water was out so the PM sent someone out to relight it and test it.
  • Mailbox was moved after the tenant complained that water kept getting into it so we had it moved.
  • Put in new railing that led to the basement and tightened a bedroom ceiling fan.

Obviously this is where self-managing would be much cheaper. I mean, even I can relight a water heater! This property is out of state, so I need to rely on someone to deal with the tenants and maintain the property. This is why I pay a property manager.

On the plus side, I spent none of my own time dealing with these tenant issues.

August’s net cash flow came out to $348.


So far, my new tenant has been good. They paid August’s rents back in July and they paid September’s rent a couple days before the 1st as well. So you’ll see the rent income below reflects September’s rent.

A tenant who pays early is always a good sign.

Here’s the roll-up cash flow for rental property (RP) #2.

Cash Flow

No PM Fee this Month

While my property manager (PM) takes a 9% fee on all rental income, this month I was credited back one month of PM fees. Why? Well, if you recall from the month of May, my old tenants had moved out and I was returned my full security deposit. I questioned the PM on taking a 9% fee against the security deposit. Personally, I didn’t agree that the security deposit should be treated as rental income and therefore subject to a 9% fee.

After a few emails back and forth with the PM, they decided to credit me back this PM fee. Score! As a result, August’s management fee came out to 0!  I was pretty happy about this credit since I was still recovering from a painful vacancy.

High Electric Bill

In mid-August, a large $158 utility bill came in and I certainly thought it was a mistake. The bulk of the bill was due to electricity. $137 of electricity to be exact and this was incurred during the last 4 weeks of my vacancy! I’m told the Midwest can experience some brutally hot summers. So it seemed that the A/C had to be running a lot.

August Cash Flow Dare I say, all day everyday? How else do you rack up $137 of electricity?

When you’re showing a property to a potential tenant, you want the house to be comfortable. So the A/C needs to be blasting if it’s scorching hot outside. Though there are many ways you can still reduce the electricity used so you won’t be hit with a huge bill.

First, don’t leave the A/C on all the time. Turn it on only during times when showing the property. Rather then leaving it on all day, I’d suggest having your PM or leasing agent arrive 20 minutes before scheduled showings to then blast the A/C.

Second, what temperature is it being set at? If 65 degrees, then again your A/C will be on almost all the time. That results in a pricey electric bill. Instead, set it at a higher temperature. Energy Star recommends setting your thermostat at 78 degrees, which is like a pleasant spring day.

If you’ve seen my last couple of cash flow reports, you already know that turnovers can be costly. This was my first turnover experience with my PM, so lesson learned for next time.

Net cash flow for RP#2 for the month of August came out to $376.


In summary, both rentals have tenants and are cash flowing positive.

Net cash flow from both properties: $724

What do you all think of this month’s cash flow? 

9 thoughts on “My Monthly Cash Flow Report – August 2016

  1. Looks like a good month! Great job for discussing the security deposit issue with your PM and successfully negotiating a rebate of the fee. I don’t think they should charge on the security deposit, either. It’s not “rent.”

    Anyway, smart of you to notice and to handle it. A lot of people avoid confrontation and might have just let it go, but losing 9% of every security deposit from here on out would add up.

    What do you do with the cash flow? Spend it, save it, invest it? Are you planning to put it toward a new property?

    • Thanks Yeti! I’m not one for confrontation either, but it’s something I’m working to improve on. As for the cash flow, it just sits in my account. First I build up reserves…about 6 months PITI and some maintenance. Once I hit that, the extra is saved for future real estate purchases.

  2. Your PM should only charge their fees on rent collected. A security deposit is NOT rent collected.

    I run the A/C on a property when I am working on it, and the bills get high too. Not to brag, but with 25 units, I have not missed a day of rent in years. Like maybe 5+ years. It’s been that long since I had an eviction too.

    Be sure your PM is collecting late fees. Any rent paid after the lease says is late. I send a text to all tenants in the 28th of the month reminding them rent is due.

    • Completely agree. Security deposit should not be treated as rent collected and therefore should not be subject to PM fees. PM does collect late fees, but it’s not much and they go to the PM. I can see the reason for it since there’s additional work on the PM side when dealing with a late paying tenant. Though I know for some PM’s, I’ve seen where the late fees are split between the owners and PMs.

      Wow! That’s over 1,500 rent collections without a single late payment!!! That’s truly impressive Eric.

  3. I’m glad you got someone in to your place! We are really lucky that we have never had any turn over in our houses. Going on 4 years for our first tenant, even though we have raised the rent a few times. We keep the rent just below the market rate, then people generally don’t move unless needed. We also give a very generous Christmas bonus, and that seems to smooth over any little problems that might have occurred. Nice work!

    • That is so awesome to have the same tenant for 4 years. The tenants we lost were highly qualified. We really didn’t hear a peep out of them all year and they paid their rent ahead of the 1st every month. The downside with such qualified tenants though, is that they are able to afford their own home so may not be long term tenants. This is exactly what happened with our previous tenants who ended up buying their own house.

      Keeping the rent just under market rate and a little Christmas gift sounds like a great strategy. My wife and I have every intention to keep renting our apartment here in LA because our landlord has not once raised the rent on us in 6 years and the rent was already below market back when we moved in 2010! Even without any gifts, we’re staying put!

  4. We do $100 for every Christmas they have been in the place. It’s worth it to me just not having to deal with the turn over. And they are super appreciative. It helps a lot of folks out around Christmas time. So we earn a bit of good will.

    • Hey Eric! It was great chatting with you too and talking stocks. I show my cash flow numbers every month. Some months are good and some not so much. Thanks for stopping by!

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