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:
- 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.
- Cash flows and returns are separated by calendar year. This will help spot trends in performance over time.
- 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%
- 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!