How Much We've Made From Our Rental Properties This Year - 11 Units + No Debt

hi guys jamie and sarah here on this channel we like to talk about unique ways to make money outside of a nine-to-five and one of our main sources of income is actually our rental properties so this is something we don't necessarily talk about a lot but it's actually our main source of income so we thought that we would go over some real numbers for you of what we've actually made from our rental properties in 2021 [Music] so just to start off with the basics we own five rental properties um that's three duplexes a single family and a four unit so that's 11 units we have chosen to pay off all of our mortgages on our rental properties so that each month we can have a really high monthly cash flow so that we can pursue other things like youtube and becoming financially free so that just reduces our risk and allows us to have a lot simpler of a life yes that's important to us for sure so we thought we'd break it down our estimated income from rental properties and then our actual income just so you can kind of see the types of things that we deal with as rental property owners so the way we calculate our estimated income for our rental properties is we take our gross rents and then cut it in half it's called the 50 percent rule and that's how much we can expect to receive monthly so our gross rents on all our properties is around eight thousand dollars a month um so if we take half of that that's four thousand dollars which is what we can expect to receive in our bank account each month that sounds really great but we're going to take a look at the numbers today and show you just how different it can be from month to month we have chosen to use a property management company which means that we actually pay a company to collect rents each month they deal with some of the maintenance repairs evictions if we have to all the legal stuff that kind of thing and so they take a 10 cut of it each month but that also means that it's completely passive for us so we aren't dealing with like fixing toilets in the middle of the night we're not dealing with collecting rent stuff like that yeah and we really feel that that's worth it to us because otherwise it would take up all of our time and it would be a full-time job in and of itself we thought we'd break down each property and just show you the differences and how different expenses can come up and affect your total income so we're gonna start with this first property it's a duplex we've had it for about four years now this property typically does pretty well for us um we're supposed to make 17.85 a month between both units so looking at our spreadsheet from our management company it looks like january and february we did make that rent so this one did pretty well you can see our management fees is 10 of that so that's 178 a month um it looks like there was a repair in january for 135 and a repair in february for 42 dollars that's pretty low numbers yes definitely so we're happy with that you pay water every three months and so that's why there's nothing in january but then in february you have a bill for 145 our total income for this property for january and february was three thousand five hundred and seventy dollars um and our total operating expenses were six hundred and eighty dollars and eighty six cents so that means that our net operating income what we get to take home and put in our bank account was two thousand eight hundred and eighty nine dollars and fourteen cents so that property did amazing january and february um one thing to keep in mind all these numbers we go through is not including taxes and insurance we pay property taxes and insurance once a year so that's why it's not on our monthly spreadsheet but if i had a guest for this property it's probably around 200 a month so yeah that that's a great property that's how it should look that is awesome if every property performed like that it would be really great for us but yes um we'll show you the next property it's a little bit different this next property is our four unit and we acquired this property last year and it had a few issues that we knew needed to be taken care of when we bought it the first being that all the utilities are in the owner's name so i pay for heat and electric so one thing we had planned on doing was splitting the electric but because of coven and everything that hasn't happened yet so um we're still currently paying for the electric for all four units which is a big bummer um you'll see that in in a minute um there's also some trees that were hanging over the house and needed to be removed if we were to keep this property long term trees are terrible for rental properties because even though they don't seem like they're doing any damage they can cause your roof to go bad prematurely they can also cause things like termites and not to mention storm damage and stuff like that so trees are bad especially big ones we usually try to look for rental properties that don't have big trees if you can help we got a special winter deal on some of our rental properties for tree removal because they're pretty slow right now so this property had a big tree removal expense um so let's just break down the numbers in january we received 2200 a month in rent um which i think we're supposed to be around 2 400 so pretty close to actual someone maybe just chose not to pay their full rent i'm not quite sure but if you look at uh february we only got 1250 um and that is because one of the units actually quit paying and then just left so they may be left sometime in january and they didn't find it till february so that's why the income went from twenty two hundred dollars to twelve hundred and fifty dollars that kind of stuff happens with rental properties where you'll have a tenant stop paying or just leave without paying so for the four unit for two months we received three thousand four hundred and fifty dollars total in gross rents not quite as high as it should be so but then if you look at expenses for this property uh management fees um pretty normal plumbing charge for 149 that's pretty typical too for um you know rental property they just sometimes there's leaks and you know issues like that so um electricity uh 232 in january and dollars in february so hopefully once we can get that electric split those expenses will go away we also pay water for this property and it's very expensive for four units so it's 200 around 200 each month that we have to pay in water so water you typically have to pay for all of your income properties unless it's a single family so you can always expect that as an expense you typically don't have to pay for electric or gas the reason we do on this one is because jamie said it's all in one there's not split utilities for each unit which we're working on but is a big expense and because of covid it just hasn't happened yet but that's a big expense every single month right this month it was you know close to four hundred dollars that will just go away once we get that um taken care of so and then the biggest expense on our list for this property was thirteen hundred dollars for the tree removal that was one that wouldn't come up very often but it was necessary just for the long term performance of the property and thirteen hundred dollars for trees is a lot cheaper than ten thousand dollars for a roof so yes um that's why we chose to do that so our total expenses on this four unit was three thousand one hundred and thirty seven dollars for january and february so it leaves us with a profit of three hundred and twelve dollars and eighty six cents yay thanks not very good especially because i said um that's leaving out taxes and insurance so we're actually negative so far in this property for the year but i think once they get a new tenant in and get that utility split i think um it'll definitely be a profitable prop profitable property for us so yeah so that's the 40 unit let's go to the next one okay yeah all right next one um so this next property is also duplex and we've owned it for three or four years now it does pretty well it's in not quite as good of an areas of town as the other one so we get around 1400 a month in rent for this property and it looks like based on our spreadsheet here that they did pay both months both units so our income for this property was two thousand eight hundred and sixty nine dollars not bad the expenses for this property this is another tree property so kind of explained that before in our last one but this one was big though there's a lot of trees so we had a 2600 tree bill for this house so yeah big bummer to pay that but um we just had to be done we plan on keeping these properties forever so looks like other expenses besides management fees um just a plumbing expense for 368 um plumbing expenses can be a pain but you know sometimes there's like a mid middle of the night emergency they need to get roto-rooter over there to help with the sewer back up and yeah it's well worth the expense to pay someone to do that than to go over there yourself so yeah i'm happy to pay plumbing bills so that brings our total expenses for this property to 3542 for january and february bringing us to a negative net profit of negative six hundred and seventy three dollars that's bad that's bad yep but if these people keep paying throughout the year that'll come back and turn positive and it'll be it'll be a good thing but that's where rental properties are interesting because you're not guaranteed to get paid every month and you have to anticipate that ahead of time one thing that's nice about this particular property is that both tenants are section 8 which is a government program to help people afford housing so what that means is that we get paid by the government for their rent so we're guaranteed to get paid as long as they are living there so so sometimes we might get lower rent for that um but we're guaranteed it so to us we actually like section 8 we know some landlords who will not accept it but we actually like it even though we're getting lower rent we're giving someone a really nice house and we're guaranteed rent so for us it's kind of a win-win especially this past year during covid when a lot of people couldn't afford to pay we're guaranteed to get paid so it's definitely kind of a safety net for us as well right so yep yeah yeah and often those people don't move because they um because their rent is paid for they kind of typically stick around longer than someone who is paying their rent they'll move more move more often so this next property is a single family and we bought this one in november so it's a recent purchase for us because of that there's some startup fees that we had to pay we there were some issues with the property that needed to be taken care of in order for it to get city certified for rental one of them being that there needed to be a chimney liner put in so that was a couple grand so there's just some startup expenses on this property but we recently placed a tenant and that is a great thing but because of that part of our rental property management agreement is that they will take half of the first month's rent if they fill a vacancy so in january we got 576 dollars in rent that was because we only got half of the rent um and then in february we got 920 supposed to be paying 1200 so i don't know about that this is also a section 8 tenant so i'm not quite sure often maybe look into that and figure it out but um i expect that this month they will have paid that full 1200 so our total income for this property is 1496. for january and february expenses we have management fees plumbing bill um electricity bill for when um there was no tenant i have to pay the electric when there's no tenant there so that's where that came from and then trash also if there's no tenant there i have to pay for any trash which i don't know why there would be trash but i don't know maybe old trash and then in february we had that new lease fee i expect that maybe they filled it sometime in january so that bill went on the february right um spreadsheet so 600 to fill that lease so our total expenses for this property were 1360 um for the two months so our net income was 135 and 90 cents in the positive but that's before taxes and insurance yeah yeah so yes but this one will start to perform better but um we kind of if you can you can kind of tell already we had a lot of different big expenses pile up at once which is one thing you definitely need to consider if you're considering starting investing in rental properties so yeah i think this looks very discouraging if you haven't ever invested before and you're not really sure if you want to get into it these numbers can look really scary but we've also had months where it's more than 50 and we do really well it just it totally that 50 is actually more of an average so right now we're way below 50 but some months you may be higher so we definitely believe in rental properties as a passive income we think it's super smart to invest and just get into but these are this is real life these are the real numbers so absolutely so our last property is our very first rental property that we ever purchased back in 2014 i believe um it's a two unit um they have actually been the exact same tenants who lived there when we bought it they've never moved out which in some ways is really amazing we've never had a vacancy gap they don't complain a lot they they like their home they want to stay there they're pretty good tenants for the most part we do have issues with these tenants sometimes um not paying for a few months but then they always catch back up so they're not always like on time with rent but for the most part we're happy with them as tenants um they have really low rent we don't raise it on them because we're happy with these tenants we don't actually have them pay market rent because we want them to want to stay we don't want to make them move out um because they're good tenants so yeah and so we only paid 33 000 for this house so very cheap so if we were to have new tenants come in we'd have to do major updating which would be a huge expense and if they're happy to pay that rent that's good for us and so it's one of those situations where it's just good for everybody to not have a vacancy vacancies are very expensive and they're the biggest cost in landlording and owning rental properties if you have a vacant unit because not only are you not getting rent you're also having to fix the unit up for a new tenant so true yep yeah so it looks like we do have some issues with some tenants or with one of the tenants not paying the past couple of months so we'll have to check in on that and see what's going on so it looks like our income for these for january and february for this property was only fourteen hundred and eighty dollars which it's supposed to be supposed to be around two thousand so around a thousand dollars a month so right um that's for both units here's our management fees 148 for the two months looks like they had a really small maintenance repair again these guys just don't complain this one of the reasons we love them is they're pretty low maintenance um tenants we did have to replace a hot water heater that was a thousand dollar bill so that kind of stuff happens too so it looks like our total operating expense was um one thousand one hundred and sixty eight dollars and fifty cents so that means that we were able to take home our net operating income was three hundred and eleven dollars and fifty cents so not too great not great again um so 2021 has not been shaping out too great for our rental properties but yeah i think the one tenant is two months behind so if he's not able to pay soon i think they'll probably give him an eviction notice and um stuff like that but i'm thinking with stimulus checks coming out i think he'll hopefully be able to catch up and be able to stay in that unit but yeah they always give him a 30-day notice they don't you don't kick people out just immediately when they don't pay rent they give them a lot of chances um so hopefully he can catch back up yeah and so again we don't have mortgages on any of these properties so that's why you're not seeing that expense in any of them so this is our actual take home if we hadn't more if we had mortgages on these imagine how bad how much worse it would be we'd be a little nervous right now yeah so this is the route we've chosen for um our investment properties is to be debt-free on them um just because of that low risk for us and for our family and that simple life that we want um it's important you definitely can grow a lot faster and maybe have more income coming in every month if you had a lot higher of a debt ratio but for us it's just not worth it so that's where we're at so let's add up the total here i'm curious to see how close it is to four thousand dollars okay so our total net income on our rental properties for january and february was and seventy five 2975. and forty cents so that averages out to about a hundred and that averages out to about fourteen hundred and eighty seven dollars a month so if you remember our gross income is supposed to be eight thousand a month which we can expect to take home about 4 000 a month if you use that 50 rule but according to these numbers we only took home 1487 per month through january and february of this year so we're definitely not living up to that 50 rule at this time um but we had to do some um really important things to help keeping our properties going and making sure that they last a long time and and we had some vacancies and also some people not paying rent and that kind of thing so but these are this is real life experience of kind of owning these rental properties and that you maybe shouldn't totally rely on it because it can be way different than you expect even if we expected 50 it's way less yeah so i hope that doesn't scare you but if you are considering getting into rental properties keep in mind that leverage there is risk to owning them so reducing your amount of risk as much as possible is very important so for us that was especially important because we're self-employed and all of our other income sources vary from month to month as well so to take on a bunch of risk by having a bunch of mortgages really wouldn't make a lot of sense for us so yeah consider that when you're looking to invest in rental property we still like we said really believe in them and think that they're a great way to build wealth and passive income so totally um if you have any questions for us let us know um otherwise we will see you guys next time please let us know in the comment section also if you enjoy this type of content um we're really passionate about it so we'd like to know if you are so that we can share more of our experience so i will see you guys next time bye

Channel: JAMIE AND SARAH

Views: 18,511

Rating: 4.951807 out of 5

Keywords: how much do we make, how much do we make from real estate, how much we've made from our rental properties, how much we make from real estate, how much we make, how much we make from rental property, how much we make from owning rental property, real estate investing, rental property, rental property investing, investing in real estate, real estate 2021, rental property investing for beginners, cash flow, cash flow from rental property, cashflow, passive income, real estate

Id: Z9AaeOiWyK0

Length: 18min 44sec (1124 seconds)

Published: Mon Apr 05 2021