My Monthly Cash Flow Report – February 2016

So here’s my very first cash flow report I’ll be sharing with you all. These are actual numbers of what my rental properties have generated for the month of February.

Note that when I run a cash flow analysis, I will average in the cost of maintenance and vacancies. Though for the purpose of these income reports, I’ll report only expenses as they occur. So if there were no maintenance issues for a given month, I’ll report zero. What’s not shown is that a portion of the cash flow every month is actually going towards building up my reserves.

I currently own 2 single family homes that are rented.

Rental Property #1

At first glance, this month’s cash flow for RP #1 might look a bit boring. When it comes to rental income, I like boring.

You won’t notice from this statement, but this property has a tenant who finally caught up with their rent payment in January and was on time for February. It is such a relief, let me tell you.  Back in September of 2015, the tenant first missed their payment. I put my faith in my property manager (PM) to handle the situation, reach out to the tenant, and try to work with them. Whenever a PM is able to get in communication with a tenant who is behind on rent, this is a good sign. So I let it play its course.

The tenant eventually paid all of September’s rent with late fees during the first week of October. Though now they were behind in terms of October’s rent so the same thing was happening again. This repeated over the next couple months as they were constantly having to play catch up. Chipping away at their balance (with late fees) little by little until they had completely caught up by the end of January. Which brings us to February where they paid the full month of rent on time!

My PM was great during this entire time. They stayed in communication with the tenant and gave me regular updates on their progress and outstanding balance. It was really the first challenge that my PM had to face with my rentals and I have to say they passed with flying colors.

So compared to the last few months, February was boring. But again, I like boring. February saw no additional expenses other than the typical PITI (principal, interest, taxes, and insurance) and property management fees, bringing this month’s cash flow to $475.

Rental Property #2

RP #2 required one maintenance call. There was a broken basement window that needed repairing. My property manager promptly took care of the issue and the total cost was rather low at $32. Aside from this minor repair, as well as the usual taxes, insurance, mortgage payment, and PM fee, the monthly cash flow for RP #2 was $390.



The month of February was a solid cash flow month. All rents were collected on time with only one minor maintenance expense.

Total February Cash Flow: $865

5 thoughts on “My Monthly Cash Flow Report – February 2016

  1. OB, I think it’s very interesting and informative for would be out-of-state investors to see the monthly returns and experiences chronicled as they occur. So often, new investors are left with guidance from those who have found success in real estate investing, but only years after their humble beginnings. Its refreshing to be able to see the journey to financial freedom while in progress. I hope you continue to prosper with your investments. I look forward to reading future reports.

    • Thanks Morris for stopping by! Showing a current investor’s experience (both the good and bad) from early on is exactly the goal with these reports. I’m not a big shot investor (yet), but just a regular guy with a full-time job who’s starting 1 house at a time.

  2. Thanks for sharing! What % of rental income do you budget for vacancy, maintenance, capex, lease-up to PM, turn costs, utilities, and anything else (when you’re analyzing before the acquisition)? I’m new to analyzing KC properties and was thinking 10% maint, lease-up 1 month rent and assuming every 2 year turnover, 5% utilities (in case of vacancy and does the tenant cover all utilities?), capex 7%, turning property 5%? Is this too many expenses to include and just stick to 50%? Thanks for any help!

  3. It really depends on the property and location, but I’ll generally start with a 1 month vacancy assumption (8%), 10% for maintenance, 9% for monthly PM fee, and assume new lease every 2 years along with the standard PITI expenses. Though my PM will tell me that the area of some of the houses I look to invest in are around 5% vacancy. I guess I like to stay conservative.

    Maintenance really can vary depending on the age & condition of the property as well as how full of a rehab is done when acquiring it. If you’re sticking with a %, just be sure to consider whether your rental is a low rental or high end rental. 10% of a $600 rental vs a $1500 rental are very different budgets. Though if the $600 rental is brand new and the $1500 rental is extremely old and not renovated, they could be accurate. Personally, I feel comfortable having $1000/year budgeted towards maintenance, though I still use 10% which comes out higher for my rentals.

    The major CapEx to account for are items such as the roof, HVAC, and water heater. In regards to your cash flow analysis prior to purchasing, definitely budget this in if you don’t plan to replace any of it when you acquire the property. You can do this by just averaging the cost of the replacement over the estimated remaining years of life for that item. For instance, consider a 15 year old roof that you believe still has a good 10 years of life remaining. For a $5000 brand new roof, the monthly CapEx cost would be about $42 ($5000 / 10 years / 12 months). There are other CapEx items (i.e. fridge, flooring, etc.) you can include though I wouldn’t go overboard here. Also depends on what your hold period is (30 years or sell off in 5 or 10 years).

    I also would use the 50% rule with a grain of salt. It’s a nice reference point to see where your expenses are stacking up for sure. Sometimes I notice a property’s expenses are very low compared to the 50% rule. It may be that even though I’m accounting for every expense properly, that the taxes in that location happen to be much lower.

    All of this really deserves its own post and then some. Hope this helps!

  4. Thank you OB! Yes I need to adjust based on a case-by-case basis (1900 house vs. 1970 and renovation/updates could vary with either). I see so many pro-formas with varying expense %’s (no capex seems to be common and lease up fees are not factored in generally by turnkeys) that when I use my conservative numbers I’m only getting $200 monthly cash flow and can’t pull the trigger. Property taxes can vary a lot too, especially in Ohio. Thanks again!

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