Last month I created my first Passive Income Report for October in which I made $1996.05 in passive income. That is pretty good and I have no idea what I made this month yet. I will be finding out as I write this and document it. My guess is that I made a little bit more. You see the difference this month is that I have added a new rental property. I bought my 4th turnkey rental property in late October and I have already been paid the rent on that new house for November so that for sure is added cash flow however I did have some repairs on one of my rentals so that will bring it down a bit.
The purpose of this income report is to show you that generating passive income can be achieved by anyone. If you are savvy enough to invest in the right kind of investments, make good decisions and do the right things, you too can generate passive income. Look at me, I am just a regular Joe Schmoe (ordinary person) and I am doing it. There is nothing special about me. I don’t even have a bachelor’s degree. I am in my mid thirties and plan on being fully retired by my mid 40s at the latest. And by retired, I don’t mean farting around the house doing nothing. I just mean not having any obligations to anyone and being able to do whatever I want in life. This most likely means I will still find something to do and keep me occupied. I could volunteer somewhere, start up my own personal little side business or anything. We’ll see. What I can tell you is that there will be a lot of outdoor activity involved in that future life I will have.
If you have been following my blog, you know that the whole existence of Cash Flow Diaries is pretty much to write about and document my journey to building more passive income aka “Cash Flow” and to show you how I am doing it. That is how I came up with the name Cash Flow Diaries. From now on I will publish a monthly cash flow/passive income statement that shows you how much passive income I earned in that month from my real estate investment properties. The income you will see here is only passive income. My income from my day job does not count as passive.
Passive Income is defined by wikipedia as “income received on a regular basis, with little effort required to maintain it.” Wikipedia also provides examples of passive income streams which include:
a) Any type of property income
b) Rent from property
Those are exactly the sources I utilize to generate my own passive income and I will break down the numbers and totals for you below for the full month of October. If you don’t want to read the complete break down on each property, just scroll to the bottom for a Quick Summary.
Rental Property #1
Income:
Rent Received: $1230
Expenses:
Mortgage Payment: $837.46
Property Mgmt Fee: $0 (This is the only rental property I have that I self manage)
Repairs: $190 (Fence Repair)
Total Actual Passive Income = $202.54
-To see more info on this property click here.
Rental Property #2
Income:
Rent Received: $825
Expenses:
Mortgage Payment: $338.62
Property Mgmt Fee: $82.50
Repairs: $0
Total Actual Passive Income = $403.88
-To see more info on this property click here.
Rental Property #3
Income:
Rent Received: $935
Expenses:
Mortgage Payment: $347.40
Property Mgmt Fee: $93.50
Repairs: $0
Total Actual Passive Income = $494.10
-To see more info on this property click here.
Rental Property #4
Income:
Rent Received: $1050
Expenses:
Mortgage Payment: $352.39
Property Mgmt Fee: $105
Repairs: $0
Total Actual Passive Income = $592.61
-To see more info on this property click here.
Rental Property #5 **NEW**
Income:
Rent Received: $700
Expenses:
Mortgage Payment: $0
Property Mgmt Fee: $56
Repairs: $0
Total Actual Passive Income = $644.00
-To see more info on this property click here.
Investment #6 – Performing Note
Income:
Payment Received: $1127
Expenses:
Mortgage Payment: $1001.08
Note Servicer: $13
Total Actual Passive Income = $112.92
Quick Summary:
Total Actual Passive Income for October 2015: $2450.05
Holy Cow I make a lot of passive income in November!! That is a really good month for me and the most I have ever made in one month. It really makes me happy to see that because I am making progress and getting closer to financial freedom. The reason why I made so much though is because if you haven’t noticed, there is a new rental property added. I bought my latest rental property late last month and I don’t have to pay the first month’s mortgage from it until December 1st. That means I get one free month of collecting rent without any mortgage payments. Now grant it the mortgage on that new property is only going to be a few hundred dollars but it still helps recoup the costs from the $190 repair expense I had to pay on property #1.
So for November, I added a new rental property and also had a repair expense on property #1. Those were the key differences this month and because of the new rental I was able to increase my passive income by $454 compared to last month’s passive income of $1996
Although these numbers might seem great to you and I keep in mind here that I do not and am not planning on using this money anytime soon. All this money just piles up in a checking account I have and I will only use that money to put right back into the real estate properties. Whether it’s through paying for repairs/vacancy or just flat-out buying new properties. This is part of my plan to reach financial freedom as fast as possible. This monthly passive income will also change each and every month based on what kinds of issues I have with each property like the repair I had on rental #1 in November. This may seem like I am making a lot of money in passive income but the reality is that it will be less than this after I account for future vacancies and repairs. This is why it is very important for you to include these projections in your calculations when you are analyzing rental properties.
Because I just added a new rental property, I am officially back in save mode. I will continue saving money until I’m ready to buy a new rental property and hopefully I can do this in the first quarter of 2016. My plan is to continue buying rental properties and increasing my cash flow. At some point, not sure when, I will feel comfortable enough to quit my day job but that is not going to happen anytime soon. If I continue at the same pace I have been on the last 2 years, then maybe in 5 years I can retire. And that would be assuming everything works out great and I get lucky.
Realistically speaking, I probably wont be able to retire until my mid 40s which is about 10 years from now. However if I can find additional ways to grow my mini real estate empire, then I might be able to do it sooner. We’ll see.
Are you generating passive income? How are you doing it and how much of it do you make per month?
The post Real Estate Passive Income Report – November 2015 appeared first on Cash Flow Diaries.