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My Real Estate Investment Performance (Q2 2017)

Following up from the first edition of tracking my investment properties, let's take a look at the numbers through the second quarter of 2017.

To refresh, here are the assumptions I am using in the calculations:

  1. I am only looking at cash on cash returns.  These are simple percentage returns (non-annualized) based off of the total net cash flow received versus the total out-of-pocket cash amount put down at the acquisition of each property.  Appreciation, principal pay-down, and tax benefits are not a part of the calculated return.
  2. Cash flows and returns are separated by calendar year.  This will help spot trends in performance over time.
  3. Cash flows and returns are updated quarterly.  Anything more would be overkill when it comes to a long-term investment like real estate.

 

HERE ARE THE HEADLINE NUMBERS:

2016 Cash on Cash Return (Combined) = 13.6%
2016 Best Performer = 24.1%
2016 Worst Performer = -2.1%

2017 Cash on Cash Return (Combined) = 9.3%
2017 Best Performer = 12.8%
2017 Worst Performer = -1.4%

 

OBSERVATIONS:

  • Total cash flow for the 2nd quarter came in slightly over $10k, which is fantastic.  I am diverting $2k/month right now for our shared household living expenses.  The extra $4k has been banked for a future real estate purchase.
  • At present time, these 8 properties are on pace to generate roughly $36k in free cash flow for the year.  Obviously, there is much that can and will happen before that time to alter performance; but just the thought of that type of passive income definitely helps put a smile on my mug.
  • The tenants in Property 2 have unfortunately decided to break their lease.  This will cause some loss of revenue beginning in August.  The house was beautifully renovated before they moved in, so I have my fingers crossed that the property was kept in good condition and can be rented again easily.
  • Property 3 is currently having a tree removed from the backyard which will set performance back over the next couple of months.  I chalk this up to normal maintenance.  The tenants in this location are top notch and signed a 2-year lease which helps alleviate my concern over the expense.

Check back after the end of the 3rd quarter for another update!