Saturday, May 6, 2017

Passive Income Report: April 2017

It is time again for my Monthly Progress Review, the fourth of the year, and what a boring one it was.

In each progress review I will list a summary of all dividends I received, the rental income I received, and any purchases I made from that particular month.

This monthly report covers April 2017.  


I hope you enjoy these posts and that we can learn how to grow our passive income streams and build real long-term wealth together! 



General Thoughts on This Month: April was very slow for passive income. I hardly have anything to say but that I am thankful for the little we received and that some income is always better than no income!  This month was also the first month since PassiveIncomeDude was launched last July where my rental properties had negative cash flow.  Thankfully I received an escrow refund, otherwise this could have been a pretty low month (less than $50, which is why I said my comment above).

Anyway, Read More to see how I thankfully still earned $655 this month in passive income...

Dividends Received
In total, I received dividends from only two smaller holdings. But, I also received an 'escrow overage' check for my North Carolina property.  For those who aren't familiar with this concept, every year your property taxes and insurance can fluctuate.  If they happen to be reduced, then you get a check for the difference! Since this is a 100% completely passive event, where I literally did nothing to receive it, I feel justified in counting it towards my passive income total. 

Since my NC property isn't an active rental property yet, I counted this as a dividend instead of rental income.  I suppose I could have counted it as rental income, but this felt more appropriate for the time being since we haven't actually moved out yet.



Rental Income Received
I currently have two rental properties, my Missouri Rental and my Colorado Rental.  Listed below is the cash flow they provided this month:


Therefore, with dividends and rental income, Total Passive Income Received: $655.11

Purchases
Purchases were very small this month as I continue to pay down debt. I think we are now only several months away from from being DONE WITH DEBT! What a cool feeling that will be.  We've been diligently paying down debt for about two years now.  As some of you know, we took on a significant amount of debt to buy our North Carolina property, which I've written about before.  At one point we were around $40,000 in debt. That is a rough feeling! :).  Now, I anticipate my NC property to start producing over $370/mo in cash flow starting in June.

Anyway, during April 2017 I added $500 total to my portfolio, in the Vanguard REIT index (VGSIX).  Nothing exciting about this purchase - just trying to get enough to convert my shares to the Admiral offering. 

Thoughts on This Month
This month was unusual, with a random 'bonus' essentially from my NC property in the form of an escrow-overage check, but then about $300 worth of repairs on my Missouri property, making my overall rental income negative for the first time in over a year.  

I think my post-takeaway lesson is that having multiple rental properties (like multiple stocks) allows for diversification benefits.  In this case, my Colorado income almost completely offset my Missouri expense. I think this example illustrates the awesome advantage of having multiple properties, which could also be applied in other areas as well, such as offsetting vacancy costs as well.  Try to grow your rental property portfolio just like you do with equities.

In conclusion, last year's total in April was $654, resulting in a YoY growth rate of a whopping 0.20%. (HA!)  

With the addition of this month's income to my Progress Tab I now have earned $2,171 in total this year in passive income.  Wow, I am off pace for my Passive Income Goal But the journey is long and sometimes it takes patience! It's "all about moving forward..." (again, Rocky Balboa anyone??).

Thanks for reading, and I always appreciate any comments,

Passive Income Dude 


15 comments:

  1. Any other increase is a increase no matter how big or small once those houses start returning money you will be banking it lol. Good job

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    1. Hey thanks Dividendsandhobbies. It's usually a rollercoaster, but we're moving in the right direction. I tend to only do a thorough assessment of our 'system' on an annual basis, but I track passive income and net worth monthly. Both of those seem to be moving in the direction we want them to. Thanks for commenting,

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  2. YoY increase is small but it is much better than a decrease. You are still miles ahead of the average person in terms of collecting passive income.

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    1. Hey thanks IP. In the end, it's all God's anyway. And so I think we shouldn't be gripping what we have too tightly.

      And to be completely honest, we're all going to die (this is a fact), and we won't be taking any of these earthly possessions with us. So perhaps there are more important things. Thanks for commenting and I appreciate your encouragement for my measly YoY increase! :)

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  3. Nice as much as you knock it you still own 2 potential rental properties. That's awesome. Intresting about the escrow never heard of that. Our govt would prob just keep the money...

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    1. That's funny! Sometimes taxes are raised though and you owe more per month. That happened to my Colorado property this year and took about $80/mo in cash flow away. So it works both ways. :)

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  4. Thanks for the update. The escrow amount you received was pretty cool. Must be nice to occasionally get those unexpected checks in the mail. The only downside to including it as dividend income is that next year, if you don't get a similar escrow check, your year-over-year change won't look that good. Love the rental income and congrats on almost being debt free!!

    Scott

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    1. Hey Scott, yea the escrow bumps are great. They can also work in the other way though too. Which is what happened to my Colorado property. The taxes there were raised. So my cash flow went from around $330/mo down to about $267/mo.

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  5. Solid result for the month of April. No doubt that overage check came in at a good time to keep you well in the black for the month. You are building up a nice future for yourself with those rentals. Always love to read the real world results of property owners. Your monthly updates highlight that rentals isn't all about "collecting checks." There's work, unexpected expenses that come up and lots of patience to build up that equity over time. Keep it up. You are headed in the right direction.

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    1. Thanks Keith. Yea April is pretty light with most of my holdings in real estate and mutual funds currently. And thanks for your comment about the rentals. I'll always be exactly honest with what is happening. I think the folks who read my site will quickly be able to see that my Colorado property is great, North Carolina looks like it WILL be great, and Missouri has been a total dud for the last few years. I'm thinking I'm moving in the right direction (as you say), so thanks for the encouragement! Take care,

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  6. Gotta love overage checks, mine was about the same on my rental earlier this year. I gotta finish off getting to 78% LTV so I can drop the PMI on my loan.

    Solid month in the books again, do you ever count your equity gains at all? or are you completely focus on the cash flows?

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    1. Hey Stacker, thanks for the note. What type of loan did you get to where your PMI drops off at 78%?

      As to your question, I do count my equity gains, but not on my passive income reports. I count those under what I call "total earnings." I only talk about it and report it on my individual properties' pages. Take care

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  7. Good job on generating some solid passive income! Keep up the great work and you'll see some nice income in the near future. The escrow check must have been an nice bonus!

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    1. Thanks DivGro, I appreciate it. It was a pretty empty month without it!

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  8. Growth rate may be small but still solid numbers. This year seems to be similar for me. Trying to pay down debt and/or paying big expenditures off right away so I don't accrue anymore. Leaves less capital to invest sadly so the growth isn't as high as it could be. But as long as there is still something coming in or some kind of growth, we are moving in the right direction.

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