This Real Estate Report – July 2018 edition is a catch up from the last few months. Regular readers will know that we were travelling through Europe. If you are new (or interested), you can check the various travel posts here, here and here. In the mean time the real estate has been steadily going forwards, not including the expensive renovations.
Real Estate Report – July 2018
Our rental income for July 2018 increased from previous months due to a new tenant (with a higher rental rate) and a rental increase for one unit. We are now at a total income of €3.764.92
The monthly income distribution is provided below:
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The expenses for July 2018 were extremely high and consisted of the following:
- Outside renovations of two units;
- Mortgage and loan payments; and,
- Management fees (including new tenant selection).
Now, should we incorporate these large scale renovations as an expense or investment? The properties have increase in value as a result. For now we have included them in the expenses, just to show what it can do to the cash-flow. We previously estimated that we still should just be positive with cash-flow on a yearly basis. This is still correct, albeit barely.
The expenses for the month are as follows:
Real Estate Report – Overview
The net rental and loan income for July was -€12.306. The net cash-flow was even lower at -€13.362. As noted earlier, we have a mortgage and we provided a private real estate investment loan that does not pay out the monthly interest (hence a lower net cash-flow). We will get this interest income once the loan matures in late 2020.
If you take the about €14.000 renovation costs out of the equation, we are still doing pretty good. Both in terms of income and cash-flow. The new tenant is initially somewhat expensive due to the property management fees.
Total net YTD income is €3.723, net cash-flow is -€3.653.
Real Estate Report – Forecast
We are working to sell one property to family. This should hopefully be completed by September. For now, financing options are being evaluated. The assessment for the mortgage is already done. Once the property is sold, we will have to reinvest the money. We did however not get a lot of love from the twitter crowd as to reinvest into real estate:
We are in the process of selling an investment property. If all goes well we have about €150.000 to reinvest, need your help here! What do you think?!
— Cheesy Finance (@CheesyFinance) July 26, 2018
We will however most likely reinvest into real estate, but via a loan. We need to keep the funds relatively liquid in the coming years as we have mortgage refinancing coming up in 2020. Buying new physical real estate might not be the best move at this stage.
Also, renovations will still continue in August/September, as new windows will be installed. More expenses to come! Albeit not as much as we already made a deposit to pay for the materials.
How did you do in July?