Rental income $4,275 $51,300
Rental real expenses $450 $5,400
Rental depreciation expense $1,000 $12,000
We can't forget these two. Assuming you recapture your rental depreciation in a low income year, in future, and it is offsetting a very high income currently, the depreciation is worth, maybe $150 net to your monthly bottom line.
Rental Income: $3950
Rental Income
Duplex $1,484.00
Condo $1,528.00
SFH $800.00
Net Rental depreciation tax avoidance $150
Mortgage Costs
Duplex $1,540.00
Condo $1,050.00
SFH $670.00
SFH HEL $148.00
Real property costs $450
Plus -- other maintenance fund 5%, your expenses for car usage, forms and office paperwork costs, 3% vacancy (assuming 1 month vacant per year out of three units), other?
: $$380 per month (wild guess)
Total costs:
$4238 per month.
NET: Cost to you $288 per month, on average over a year or two.
................. Think of the rule of thumb, that prefferrably 1% of your property real value (cost to buy) should be the monthly rent. No less than 0.6% to 0.5% if your goal is capital appreciation (in which case, your market may already be pretty high, so a good time to sell?)
So, first, pay attention to this post above. You are making two critical errors here: (1) on the "investment" side, you are focusing only on long-term appreciation, when professional real estate investors always start with ensuring that the monthly profit from each rental will be sufficient to justify the investment; and (2) on the "income" side, you are looking only at the rent vs. mortgage + direct management fees, and ignoring the many, many other costs that come along with rentals (repairs, periodic roof replacements/recarpeting, short-term vacancies, etc.). This means that you are in fact spending
more and earning
less from those properties than you think you are. This is also contributing to your sense of having no clue why you're always broke and in debt -- you're constantly paying all these bills and getting all these checks, so the money flies in and out, but you don't have any control over it or even know whether it is personal, business, etc.
My bigger-picture advice is to think about whether property rentals is really the right path for you. I say this because being a successful property investor means running it like a business -- the kind of business that has a CFO with the world's sharpest pencil. People who succeed in that world do serious math before deciding that a property is worth investing in, they
religiously track the expenses/rentability/etc. of each property, and they dump them when they are no longer profitable. [They also, btw, tend to keep mortgages, because the mortgages are tax-deductible and low-interest ways to free up cash that would otherwise be locked in the property -- and that's usually a 30-year mortgage, because going back to (1) above, rentals are all about cash flow, and a 30-yr mortgage will always provide better cash flow than a shorter term.] My impression from your posts so far is that this is not you -- you've apparently had at least one of these properties for almost a decade and haven't gotten around to changing the title, you don't know what you're spending on the properties, and you're not tracking the profitability of each one. It's hard to make a good living in a field where the devil is in the details when you are not willing to put in the time/effort to pay attention to those details.
Please note that this is in no way a criticism -- I am also completely *not* a detail person, and I decided against investing in real estate for that very reason. My version of saving is this:
1. Max out 401(k)
2. How much more can I afford to save?
3. Log in to Vanguard, set up automatic transfer for that amount to VTSAX.
4. When 2 changes, repeat 3.
This is literally it (and I mean that in the literal sense, too). I am lazy as shit and don't want to deal with this stuff every fucking day. And, frankly, I have a lot of other things in my life that I'd much rather spend my time on than tracking business income and expensee. Like, say, cleaning my bathroom with a toothbrush.
So, again, this is not about shaming or criticism -- it's about Clint Eastwood's "a man's got to know his limitations." The way to financial success is to play to your strengths, not chase a path that requires you to become someone you're not.
My proposed path for you would be:
1. Start tracking expenses now, using the easiest possible app to do so.
2. Sell the properties. Pay off the CC debts and loans with the profits.
3. Set up your 401(k) to the annual max (currently $1500/mo), in a low-fee, broad market fund (e.g., VTSAX).
4. Keep a reasonable emergency fund.
5. Open an account at Vanguard and put any leftover money from the property sales into VTSAX (or a target date fund if that feels too aggressive).
6. Once you have your expenses tracked and your budget scrubbed and your 401(k) maxed, take any leftover income and set up an automatic transfer to VTSAX for that amount.
FWIW. YMMV. [insert additional acronym here]