rental properties

April Financial Update

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We started getting emails about end of school year activities, and boy was that a surprise that we’re at that point. The middle one is done mid-May and the big kid is done at the end of May. Less than 2 months until summer break.

Mr. ODA took the second round of the government’s offer for administrative leave, which means he would only have a few weeks left working. I’m still working my part time job, which is taking way more hours than we had planned for. I’m enjoying it, but it’s been a juggling act with the family, which is probably why my son who absolutely loves school begged me to stay home because his belly hurt last week.

Buckle up because apparently I have a lot to share this month.

RENTALS

We received about $600 in tax payment reimbursements from one of our localities, so that was a fun surprise this month. Really helps my psyche that I have a tenant who hasn’t fully paid, didn’t tell us why ahead of time, and hasn’t been up front with when she’s going to actually pay us.

I executed 2 short term leases. Both included a rent increase for their short term period; one house is increased by $75 and the other by $25. Luckily, both are here in the Central KY area, so we can flip it between tenants. One is scheduled to leave June 30th. That house will need new carpet in the bedrooms, and it’ll need probably a whole-house paint job again. They smoked in there, even though we covered the lack of smoking rule multiple times. I’d be more upset about it if the carpet hadn’t reached its useful life years ago. The other house leaves July 31, and I can’t even tell you where we’ll need to begin with that one. She made a wood feature wall without permission. She had a giant fish tank without permission. She spent a lot of time doing things that really weren’t an improvement, so I’m definitely worried about what we’re going to uncover in that house. Mr. ODA and I are talking about fixing it up and selling it. We may look for a short term renter so that we can sell it in the Spring instead of this Fall.

I had 2 other properties accept a rent increase that will go into effect later this year. I require 60 days notice for changes so that starting at the 30 day mark I can begin advertising it if needed. One house goes up by $25 per month as of June 1, and the other goes up by $50 per month as of July 1. I also have another property that has a rent increase of $50 per month going into effect next month.

I have 4 houses that renewed another year, and I didn’t change their monthly rent rate. There are 4 more houses that haven’t been discussed. My intent is to have them renew for a year at their current rate. There are 2 of those 4 that could leave at the end of this term, but time will tell.

We have multiple maintenance issues to address. One house requires a tree trimmed off the roof, the siding cleaned, and the back deck stained/painted. We still have termite damage we’re dealing with at a house in Richmond. I have a leaking toilet that was just addressed, and then they hit me with a faulty HVAC unit during a heat wave. Then we have some houses that really need eyes on them to see what condition they’re in at some point this summer back in Richmond. It’s amazing to me how people just don’t care to tell a landlord that something is broken. I woke up this morning to a text that one of the houses here has a flooded basement due to a water heater failure.

I spent some more time fighting my insurance guy here. It irks me so much when I see him offer up his services on the local facebook group for property owners. He’s quite terrible. I sent him photos of a house that had some issues with a cluttered backyard and had the tenant clean that up. I had to fight him last month on an increase where he changed one house from a crawl space to a basement when I assure you that the vines growing through the windows solidify it should not be deemed a “basement.” When the dust settled from that debacle that he was insanely unresponsive to, I ended up owing $9.68. When I asked why my account wasn’t put back the way it was found before this mess he created, he said he didn’t know but it’s probably from the audit and changing square footage. HIs guessing and not actually answering infuriated me. I gave up and paid it, but then I ran to get quotes from other people. I hadn’t done that before because our 4 claims in a 12 months period are killing us (again, because I really wanted trees to fall on us!). I hate when people make the claim that because it’s not a lot of money, I should just give up and accept it. That’s a ridiculous way to treat people.

PERSONAL

Our electric bill is almost double what it was this time last year thanks to the vehicle charging and hot tub. Our electric bill is relatively low, so that’s not all that surprising. We also have 5 full people in this house now (as much as you can count a 2 year old as a full person… but he knows how to control light switches and eats a ton of food that we need to cook him, so I’m sure he’s a factor there!).

I’ve been working at my new part time job for over a month now. Mr. ODA was making fun of my hourly rate, but I’ll tell ya, it felt good to receive a paycheck that wasn’t $45 like it was for a day of subbing at the preschool.

I took the kids to get haircuts. My middle has had her hair cut once before, but I’ve cut the boys’ hair forever. I had family coming into town and the oldest was looking really shaggy. So I swallowed my pride and threw money at the problem, which is very out of character in this household. I just didn’t have the time to cut their hair, clean them, and clean up the mess. For $66 and 45 minutes from the time I left home until I got back, it was well worth it to me.

I had a medical procedure done this month. We haven’t met our deductible. In February, they said I had to pay my deductible to them. I said that didn’t make sense and refused to have them hold $2800 of my money for 2 months. They gave me an attitude and said I could never ever ever ask for a payment plan in the future, so that I could pay $500 to hold the date. I then showed up for the procedure, knowing I haven’t met my deductible, and they didn’t take any money from me. Another business model that bullies the customer into illogical money decisions. I also had an eye doctor appointment that was frustrating in itself, but I’ll spare you those insurance and communication details.

On top of everything else I’m juggling, Mr. ODA is coaching our kids’ t-ball team. Coaching means that I am team mom. That means that I’m responsible for communicating updates from the league (in the slow and haphazard fashion I receive information), gather value card sales that are required of every team member, organizing a basket for a raffle, and the best one – raising $350 for team sponsorship. What the heck, man?! Where did I say that my signing up of two children to play in the league means I have history or ability to gather money from businesses?? Well, I did it. I raised $350 and another mom raised $200 for the team.

No financial impact, but I’m also juggling our HOA board duties. I released our longstanding property manager and hired a new company, which took effect April 1. That’s taken a lot of time to get them stood up and make sure we stay on track for our annual meeting schedule in June.

NET WORTH

And with all of that said, that doesn’t even address the giant reduction in our investments that continues to happen. To counter some of the loss, I updated our property values for our houses. I don’t do that every month because they don’t move very much, but I can usually count on a few increases as the spring market ramps up. Our net worth did slightly increase (based on yesterday’s market closure, not today’s) from last month, which was a nice surprise.

I wonder why I’m tired and bogged down, but that post outlining what I’ve done recently made me realize all I was able to accomplish even though I felt like I was a jack of all trades and master of none. Hopefully things will settle down in our lives going forward now, even if I know there are definitely two house turnovers in my future.

Rental Options

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There are options that give the tenant flexibility, while protecting your financial interests in a rental property. I talk about this in some fashion about once per year, but I like to give the reminder.

In January, I ran all my usual numbers to determine if any properties needed a rent increase. The last few years have really hit our margins – insurance has drastically increased, taxes have increased significantly, and the regular trades costs have increased over time as well. During this process, I determined that 5 houses needed some sort of increase in their rent. One was the responsibility of my property manager, and the other four I wrote up the notifications, put them in the mail, and then emailed them also.

I’ve had two tenants respond back that they intend to move in the next year, and they wanted month to month. We don’t agree to month to month options. Well, I should point out that for significant financial compensation, we would consider month to month. However, the expectation is that having a long term tenant renew their lease is less work month over month. If they’re on month to month, I’m constantly watching and waiting for their 30 day notice. Additionally, there’s a concern that their 30 day notice comes in October or November, leaving me with a mid-winter lease that I’m trying to get filled.

Instead, I provide a few options that protect me. I’ve done the “buy out” or “penalty” option multiple times in the past, and that has served me well. I haven’t needed a short term lease option, but since there are certain circumstances with these houses, I put that offer out there.

In both cases, the tenant said she wants to be able to leave sometime in July/August. This is manageable to me because I can likely rent it under a fairly quick turnaround.

  1. Short-term lease
    While I would typically require an increase in rent to cover a short term lease, I was already in conversation about rent increases, so I let it be. I offered a July 31st or August 15th move out. In both cases, I know the house is going to require work. I’d like to have the last two weeks of August available to me for construction activities, instead of going into September and trying for an October 1 lease start date.
  2. “Buy out” options (e.g., penalty payments)
    In this case, I have the tenant sign a year lease. However, the lease comes with “lease break clauses.” The penalty for breaking the lease ranges based on the time of year. In all cases, I require 30 days notice and full payment of rent through the date given as notice. If the tenant wants to leave before 8/15, then there’s no penalty.

    If they want to leave between 8/15 and 9/30, then they have to pay the equivalent of one-month’s rent.

    If they want to leave between 10/1 and 1/31, there’s a two month penalty. This is because finding a renter during this period is difficult. There aren’t as many people looking during the winter because most leases are spring to spring, so the turnover is fairly cyclical, and because most people are distracted with starting school and all the holidays happening during that time rather than looking to rent (or even buy) a house.

    If they want to leave between 2/1 and 3/31, there’s a one-month penalty. Again, this is to cover the longer time it will take me to find someone to take over the lease period, and it provides me with a year-long lease (which most people are looking for) that ends at another inconvenient time for turnover in the next year.

    If they want to leave between 4/1 and 5/31 (which is the end of their lease term), then there’s again no penalty just as there wasn’t for the first few months of the lease term. I’ll be able to get work done on the house and list it for rent, expecting a decent pool of people interested in a rental.
  3. Lease transfer option
    As a final option, which was offered to us when we lived in an apartment building, a tenant can agree to a year-long lease with no extra terms. They then have the knowledge that if they want to “break” the lease agreement at any time in the next year, they are responsible for paying rent until a new tenant is found. They can move out, but they’re on the hook for paying rent until a new tenant has sign a lease.

    This is risk on their end. In some cases, I may be able to get someone in just a week or two. However, if it’s the winter, it could mean that they’re paying a month or two months worth of rent while they’re also living and paying rent somewhere else.

    The only time that I’ve used this option, the tenant provided notice on December 1st, which as I’ve pointed out is not a great time to be searching for a new tenant. Since he was already not living in the house (he had moved back in with his parents), he agreed to empty the house of his furniture so that we could still show it during that time. He paid rent on January 1st per our agreement, and luckily we found someone to take over the lease as of January 7th or 8th, so I refunded him the prorated amount of rent.

The “lease take over” concept was done by a management company in a fancy apartment building outside Washington D.C. It never hurts to ask for options if you’re the tenant. Just understand that managing the rental is work that the landlord has to do, and their “profit” is how they’re paying themselves for that. Especially in today’s environment, that margin is quite small. So when they tell you they don’t want to have a lease fall through in the Fall or Winter, understand how this is their investment and their income, so they need to protect themselves, even if it’s not necessarily what works for you or is your preference. And as for landlords, treat your tenants nicely and be as flexible as you can; it always pays off for me.

March Financial Update

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Well, my desire to post every Thursday fell off there. I started a new job, Mr. ODA’s Federal job has been in limbo, and just general life things have been going on and keeping us busy. The kids started t-ball in the past few weeks, our youngest was waitlisted at both of the preschools we tried for, and the rentals have needed more attention than average. Let’s dive in.

NEW JOB

I was approached by someone I serve with on our HOA board. They were looking for a new person who has a financial background, was really organized, and could handle talking to people regularly. It appears that I made such an impression on him and his wife. I wasn’t ready to get back into the workforce. While I have enjoyed my temporary jobs I’ve done since I quit my career in May 2019, I always had a ‘sunset date’ on those activities. I knew that each job was only for a short period of time, and I’d get back to freedom/flexibility. This was a new territory they were asking of me – be on a set schedule and away from my kids.

I expressed that my need for entering back into the workforce was that I wanted to be part of my kid’s activities and I needed to work between school hours for the most part. They expressed a desire for me to work 30 hours, and that just wasn’t feasible. Based on what they told me about the tasks required of the job, I was able to come up with about 18 hours of work, knowing it would likely become 20 hours. So far, I’ve worked more than 20 hours each week as I’m learning, and things are not moving as quickly as I expected them to. I’m 2.5 weeks in, and at this point I can do all the main tasks. Where I’m struggling is the knowledge of all the “one off” transactions and how some people are treated a little differently than the standard.

Overall, I’ve been super grateful that Mr. ODA has given me the space I needed to get my feet under me these past couple of weeks, and I’m really enjoying learning these new tasks and being involved in this sector.

FEDERAL WORKERS

It’s been rough around here for almost two months now. While Mr. ODA is still employed, there is a daily concern that the news will come in. There’s no security like there used to be expected for a government position. The blows have become a bit more scattered than it being such a daily barrage, but there’s still uncertainty and daily updates and waiting for more information that’s occurring.

PRESCHOOL

Both old kids will be in regular school next year. Our youngest has a late-in-the-year birthday, so he wasn’t eligible for preschool until this coming school year even though he’s already 2. The preschool where both of the other two went to shut down. My middle is finishing out the year there, but next year, they sold the preschool concept off to a third party. The company that took over has terrible reviews, and everything about them screams ‘daycare.’ While people need daycares, and that’s fine, we don’t need that. I wanted a space that had a curriculum.

The school previously had a daily agenda and an expectation that the kids were there from 9 to 12. This new school has a come and go as you please set up, and they couldn’t provide me a break down of their daily schedule. The admissions person was actually quite rude and condescending to me, after taking 4 days to return my phone call. I’m not in a desperate need for our youngest to go anywhere, so I won’t be trying to enroll him there.

We had hoped to get into another preschool by our house, but the closure of our old school sent a mass exodus to the nearby preschools. I told Mr. ODA that I wanted to join their church so I could get 3 weeks ahead on signing up, but he said that wasn’t ethical and was more than just saying “I want to join your church.” So I didn’t. But several other families did. And they got in. And I’m still really sad about that. He’s waitlisted there, and there’s been no indication of hope that he’ll get off the waitlist.

I tried for a “moms day out” program, which would cover one or two days per week (I was looking for 2 days previously). He’s waitlisted there, but she gave me a glimmer of hope that even though they don’t have a lot of turnover, there is a chance a space opens up either right at the end of this school year or at the beginning of next school year.

I had originally ‘mourned’ the loss of my freedom with the preschool closing down. I have been at my kids’ beck and call for 7 years by the time our youngest would go to school. Even though it was only going to be 6 hours per week, I was excited to get things done that have been on my to do list for years and just run errands unencumbered. I’ve lessened my extreme feeling on that over time, but it still would be nice to have a few hours dedicated to me and my schedule at some point.

RENTALS: RENT RATE

I evaluated our current tenants and their rent rate back in December. I should have just written the letters at that point and been prepared for the deadlines, but I didn’t. So this week, I got those rent change letters prepared, printed, and mailed. We typically change the rent by $50 every two years for our long term tenants. That’s the approach we took here except for a couple that needed more catch up. One tenant has already responded and executed a change to increase their rent. I have 4 more out there waiting for the tenant to tell me they accept the adjustment or will be leaving at the end of their lease. I also have another tenant who will be staying another year, but I didn’t change their rate since I had changed it by $25 last year.

RENTALS: TERMITES

We have a house that we purchased with termite issues. We knew it going in. We had it treated, and then we fixed the really bad areas. We then didn’t get notification about an annual warranty payment they would do, so our coverage lapsed for a few years. We saw swarmer termites in one part of the house and called them back. They offered to let us backpay those missed warranty years, saving us about half the cost it would have been for a new treatment. Well, we’re paying for that now. For the last 4 years, they’ve checked the property once per year. They’ve noted termites actively being there with more damage, and they didn’t clearly communicate the concern of the condition until this month. We have major problems in the house. One wall in the laundry room is so bad that the termites ate the backing off the drywall and the drywall is all cracking off the wall because it’s not being held onto anything. It really hasn’t been fun, but I know we will be able to fix it. So far, we’ve had the crawl space cleaned out and relined with a vapor barrier, and some plumbing issues fixed that were creating a perfect moist condition for termites to gravitate to. We still have to rip up the carpet, fix the subfloor, lay LVP, rip out a shower insert, reinstall the insert, and get the shower operational after that. It’s a lot.

PERSONAL FINANCES

Mr. ODA reduced our monthly contributions to our investments. We were putting $3,000 per month in (3 separate $1,000 transactions), and now those have been reduced to $500 three-times per month. The kids still get $100 per month each into their UTMAs.

We’ve been so busy that we have hardly spent any money. Outside of insurance and medical payments, the only extra spending I’ve done is for our daughter’s birthday parties we’re having this month. I’ve bought some clothes since I’ve lost weight on my post-three-kids journey too. Usually, we’ve booked a trip by now, but we haven’t done that either. Overall our spending is lower than it has been.

NET WORTH

The market is well below where it has been, and all our numbers show it. We are over $189k lower than last month. I haven’t updated our property values yet. I’ll probably do that next month as the spring market ramps up.

February Financial Update

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PERSONAL

I’ve been busy getting started with a new job that should officially begin in the next couple of weeks. I’ve still subbed at the preschool a few days over the last month. I’ve been working on financial consulting work for a school in Virginia. I’ve also been trying to get our homeowners association documents in order while I execute a transition I initiated for a new management company, as well as getting the budget in order well before it’s presented to homeowners months after the start of our fiscal year. Anyway, laying all that out makes me realize I’ve juggled a bunch and have been pretty happy about all that activity going on.

In addition to what I’ve been juggling, Mr. ODA is a federal employee. So the current climate has been hanging over our heads. The uncertainty of what the future holds is more concerning than it has been in the past. Luckily, we’ve set ourselves up for success, but it still is hard to manage that we may not be in control of that decision.

RENTALS

We had multiple houses pay rent late this month, and I’m still working with another house that has been late for the last 3 months and isn’t fully caught up yet. We had one house break the screen door (claiming the wind grabbed it and slammed it against the railing), so we replaced that for $400 with labor. Another house had a faucet leaking and a door knob that wouldn’t twist. I also have to get out to a house here in KY that had lattice under the deck fall down. It’s supposed to rain all weekend, so I think I’ll head out there tomorrow and handle that before the rain this weekend.

NET WORTH

We recovered from last month’s slump, but we’re still slightly below December’s number. Other than the last two months, we’re still greater than any other net worth calculation we’ve had. Our investment accounts raised slightly, and our debt amounts decreased slightly. Both sections trending in a good direction. There were no major purchases or adjustments to our accounts this past month, and mostly our spending was fairly low.

Rental Cost Changes

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In November 2023, I posted about rental changes that had occurred over the previous year. I wanted to update that analysis a few months ago, but I didn’t have all the KY data. I recently shared that my rent increases aren’t covering my cost increases, and my portfolio’s cash projections are lower now than when we first purchased all the houses. Here’s more of a breakdown of those changes per house.

ESCROW

Escrow is an account that your mortgage company holds money to pay your insurance and taxes on your behalf. I have little faith in their management, as I’ve had to follow up on balances in the account and payments made incorrectly.

I created this table to show the differences between escrow payments over the two years. I kept the houses that don’t have an escrow because it can be compared to a future table in this post. There is no House5 in this table because we sold it several years ago (houses didn’t get renumbered because House5 still exists in terms of tax documentation).

INSURANCE

We had 3 insurance claims last year, and a big one the year before. It turns out, our portfolio is looked at as a whole, so 4 claims in a 12 month period doesn’t look good, especially when one of those was 6 digits and one was 5 digits. None of it was egregious, and they were each necessary. We were just a victim of poor timing (and for some reason, the 12 years prior to that with 0 claims of any kind mean absolutely nothing). While our own history is to blame in some aspects, insurance costs as a whole are increasing quickly over the few years. Here’s Google’s AI response:

And with that between payments made in 2023 and payments made in 2024, insurance is costing us almost $2,000 more for the year. I also just made my first 2025 payment, which increased that one house by $343. The total increase from 2022 and 2024 is over $3,000.

From the initiation of insurance on each house (so, when we first bought the house, which were mostly between 2015/2016) to today, we’re paying over 43% more in total for insurance.

TAXES

The table below shows the change between 2023 and 2024 for our tax payments. Last year, many jurisdictions that hadn’t captured the assessment changes since the pandemic made up for it last year, when we saw about a $3,500 increase for the year. This year, our increase was over $2,000. Fifty-five hundred over two years is nearly $230 per month, spread over 13 rental properties is $17 each. So for those that I didn’t increase rent last year, they’re not capturing that cost increase for our portfolio.

RENT INCREASES

So far this year, I’ve missed two opportunities to increase rent. I had planned on increasing one house by $25 to keep up with inflation costs, but it didn’t register that their notice had to be given by 1/1 (every one else is by the end of the month). The second is above market at this time, which was by design since they’re not easy to work with (tried to phase them out, but they accepted the rent increase). We last raised their rent in September 2022, so it’s been two years. But I couldn’t bring myself to do it. Next year we’ll increase them by $50 per month.

My plan is to increase the rent for 5 of our other houses. Four of these houses are planned to be $50 per month of an increase, and one is planned to be $75. Our management is generally to increase rent by $50 every two years if you’re a long term renter. There have been a few that we didn’t increase for a while, and the carrying costs have drastically increased, so we’re behind now.

SUMMARY

For our cost increases between taxes and insurance, we have over $4,000 that was paid out last year (and it’s really more than that in cases where the house has escrow, so our escrow was increased more drastically that the specific amount of change in bills).

We had 3 houses turnover from long term tenants, so we were able to increase the rent to market value. I prioritize keeping long term tenants, so I don’t always do rent increases. That means that sometimes the rent is stuck below market value, but I’d rather keep a good tenant than push them out with large annual rent increases.

By bringing those houses up to market rent, I’ve made up a good amount of our deficit. Now remember, these rent increases are catching up on multiple years of drastic increases. So even though it seems we’ve brought in more, we’re both making up for previous years that didn’t have such large rent increases and paying for more large scale improvements to these houses, in addition to larger contractor costs.

Rental Profit Calculations

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When we consider purchasing a house to be used as a long term rental unit, we perform a “cash on cash” analysis. I’ve discussed this in the past, and I regularly share this with other people for their use. The gist of this calculation is to determine whether we would get a return on the cash put into the house.

The calculation considers the cost of taxes, insurance, homeowners association fees, vacancy expectation, maintenance expectation, costs to get the place rented, property management, etc. This is compared to the projected rental income. The upfront costs are compared to the annual cash flow projection. That ratio is hopefully in the 8%-10% range to be considered a reasonable cash flow to look further into the purchase.

Since we’re not really looking to purchase properties these days, I use this spreadsheet to consider changes in a tenant’s rent when it’s time for renewal. I kept all the original cash flow amounts to see how things change over the years. As I sat down to determine what changes, if any, are needed in the rents I charge, it was disheartening to see how our portfolio has dwindled in profitability over the years.

A few years back, housing prices skyrocketed, which drastically increased our taxes owed. Unfortunately, I hadn’t increased everyone’s rent consistently. I kept many people level or did small increases every two years, but that means I’m now “behind the 8 ball” in trying to make up for those drastic increases that happened in 2021-2022. In addition to tax increases, we’ve also seen huge insurance premium increases that weren’t projected in our portfolio.

Our total “cash on cash” started at 11.42%. It’s now projected to be 7.58% – if the increases I project actually go into effect over the next few months.

We historically increased long term tenant’s rent by $50 every two years. Some of these tenants have been with us for over 5 years, and the $100-200 changes in their rent have not covered the increases we’ve seen. I hadn’t worried too much about it because the losses on those houses were offset by houses where we saw greater margins. Now, everything has leveled out, so those losses are felt harder.

The table above shows the change from our original “cash on cash” to our current status. In some instances, we’ve been able to increase our margins. But there are 8 instances our margins decreased, with some being drastic. Even though some are drastic decreases, there are only 5 properties that fall below the 8% goal we have.

For Property2, the projection shows that rent would need to be at $2,500 for us to hit our cash flow goal. The rent is currently at $1,600. The neighborhood doesn’t call for $2,500. I also don’t want to be in a position where I’m floating someone’s rent at that price. From the time we bought the house to now, our taxes and insurance have increased by $1575. That number only continues to grow. Our insurance started at $390 and is now at $765. Our taxes started at $1,500 and are now at $2,700.

On top of the obvious ones like that, our maintenance costs have also increased. As one example, our HVAC technician first was charging $125 per site visit. He now charges $325 just to show up. I’ve found someone who charges $200, so I’ve been going with that guy, but just knowing that there’s been such a change in pricing structure needs to be factored into our costs.

These are really big affects on our houses that a tenant and the average public opinion don’t seem to grasp. I don’t get paid hourly or per transaction I perform to manage these properties, so that decrease of 3.8% in our cash-on-cash analysis is actually a net loss in my “income.” In many cases, we catch up when there’s tenant turnover, but watching the rent compared to our expenses are things that I need to be more on top of year-to-year.

January Financial Update

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We’ve done a good job at enjoying time together this past month. We haven’t had a lot of expenses pop up, which was a nice reprieve. However, the market is much lower at this time this month than it was last month, so our net worth actually decreased. I keep focusing on the long term picture though, and our net worth is much higher than a year ago.

RENTALS

We have 13 rental properties. They were mostly purchased in 2016-2019, with one purchased in 2022. Most of them have sustained very little tenant turnover.

I had 4 houses not pay their full rent on time this month. As of this post, only 1 is still outstanding. They’ve had car troubles and have communicated regularly with me. While I’d prefer to see at least something paid towards rent by now, they’ve been with us for 8 years, and I know they’ll eventually be whole. They never take more than the month to get rent fully paid. Of the other 3 that were late, I only charged one a late fee. The others aren’t usual offenders and communicate up front, but this one has been more difficult to get rent paid from the time we purchased the house.

While looking back at last year’s January post, I must note that this past year has been fairly easy on the rental front. We’ve had a lot of frustrations and things to manage, but it hasn’t been as time consuming in the “people management” side of things. We had a few issues with a tenant that first moved in last winter, but they’ve been quiet since. We had 4 houses turnover tenants in 2024, with fairly little loss of rent.

PERSONAL

We have been battling snow for almost two weeks now, which is very unusual in Central KY. We’ve already taken the kids skiing twice this year. Even the baby got on skis! He’s 2, so I guess he isn’t such a baby anymore, but that’s the earliest we’ve put a kid on skis. He’ll slide down the mountain, but he doesn’t stand on the skis; he’s just squatting the whole way.

NET WORTH

Last year at this time, I was sharing that our goal was to reach $4 million. We were at $3.869 million.

Our net worth is about $66k less than last month. I don’t always update the value of our assets, so that’s a fairly static number. Everyone few months, I’ll check on the ‘zestimates’ though. Typically, we expect to see the total decrease in the winter months because there are less sales and less activity to raise the sale prices like you see in the Spring months. On top of that, all of our investment accounts (except one that increased by $22) decreased a bit.

We have a 0% interest credit card that has a balance over $12k on it. We also added a car payment, which we haven’t had since about 2015. Tesla was offering a 0% interest loan, so that monthly payment isn’t going away for nearly 5 years. Overall, our credit cards balances total more than $3k less than last month’s, which makes me happy to see.

December Financial Update

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We bought an electric vehicle. Honestly, I didn’t see this coming. Since our trip in July, Mr. ODA has been reading about them. He decided he wanted a Tesla for numerous reasons. We test drove one in mid-November, and we picked up our new car order by the end of that week. Tesla was offering 0% financing, if we put $3,999 down. The purchasing process was as easy as buying something off Amazon. I’m still in awe over it. We’ve now added a $589 payment into our monthly finances, but it was worth it for the trade off of interest earned by keeping the balance in our savings account. As part of this purchase, we sold Mr. ODA’s vehicle. It was 15 years old and in relatively great condition. We got much more out of that than we expected, and that check helped cover a gap I had in our checking account (yes, I could have transferred from savings).

I’ve continued to monitor the status of our insurance woes. Luckily everything is complete. I was able to get the new policy executed (after about a weeks worth of work) on the house with the roof that was too old, which meant I had to manage the cash flow between us and a partner. I had to answer a couple more questions on executing a new policy, and we received all the reimbursements from the old policy that was cancelled. I’m happy that’s behind us now.

We have a tenant who hasn’t paid anything towards December rent. Honestly, it’s expected each year. But they seem like good people, and they always work really hard to get things situated, so I’m always lenient with them.

NET WORTH

Well, we bought a new car, paid off a credit card with a $6,500 balance since the 0% interest expired, and added a hot tub purchase to a different credit card, so there was some big swings in our net worth this month. With the hot tub added, our credit card balance went up $6k. Our cash only went down about $600, which was interesting to see. Our liabilities increased with the car purchase, but with our investments, our net worth increased by over $30k.

November Financial Update

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We bought a hot tub! It’s something that we’ve been talking about for almost a year, went looking at in May, and then finally ordered it last month. It was delivered and set up this week.

RENTALS

We replaced the roof on one of the houses. I go into that a little more in the ‘insurance’ section, but that was a $6,300 payment that was made.

INSURANCE

The fact that I have a separate category to cover my insurance efforts is just frustrating.

Last month, I complained that we were threatened with our liability policy being dropped because we didn’t provide the necessary documentation … that. we. were. never. asked. for. So I dropped everything and got the documentation as fast as I could, while being praised for my organization and response time as usual. Then a few weeks later, I was told that our policy has expired because they couldn’t get to our documentation review fast enough. Awesome. I love the one way street. We were finally informed that everything was reviewed and our policy was reinstated with no lapse in coverage. I paid that policy.

During that process, we were informed that one of our policy providers does not qualify to be covered under our liability policy because their company rating fell below A. Ironically, we had already pulled all but this one policy from this company. We requested a quote from another agent, but she said they couldn’t write a policy on the account at this time. It’s frustrating to me that once you file claims on your insurance (which it’s there for), you’re blacklisted. There were no claims for 8 years of rental properties and 12 years of homeownership, but that doesn’t matter. Since 3/4 of our claims in the last year are all in the same location … all those houses were hit by the same wind storms to cause damage. I certainly didn’t request trees to fall on two houses. Add in that the damage to our house was severe, making our policy pay out high for the last year, so getting new insurance policies where necessary (and on houses with no claims) has been difficult. There’s nothing to say we can’t keep this policy on this house even though the rating declined (which I would have never even known about), so we’re not stressing about it.

One of the wind damaged houses with a claim caused that company to drop us. That’s fine. I have been working on this replacement since September 23rd and finally got everything squared away on October 31st. One of the frustrations on that was that I’d ask multiple questions, and this guy would either not respond to an email or respond to half of it. One of my complaints was that my original request was for $500k of liability coverage (which is higher than offered on most policies I’ve had written, but is the minimum required for our liability policy), but he wrote it at $1 million. I asked for it to be lowered no less than 4 times. He finally responded when I got stern and called out the lack of action; he said that since it’s only about $25-30, they just go ahead and do it. I finally said (again) that I have liability policies that give me extra coverage, so I don’t want my individual ones to give extra coverage “just because,” and that it’s up to me to decide whether that $30 is worth it. He finally reduced it. The new policies are $510 more than the policy we were covered with that got dropped.

Oh – the original policy that we got dropped from included two houses. It wasn’t clear whether the company was dropping both houses, but I went ahead and switched both. I was hoping that the new policies would be written like all my other houses – individually. Unfortunately, it’s under one company and they handle things the same way, so both houses are tied together under one policy number again. I have multiple houses covered by Travelers, and they’re each on their own policy. I don’t understand why these houses get lumped together.

Another house of ours was given “high risk” insurance because of our roof condition. Our partner didn’t tell us about the transfer of insurance or the reason why. I discovered it when I received weird paperwork for our liability policy (which, ironically, now that I think of it, my liability coverage didn’t call out as odd, but they weren’t happy about that company getting downgraded…hmm). I discovered this on September 6th. I started getting quotes for roofers immediately, but that process took forever. I finally got the roof replaced on October 18th, and then I requested her to find us new insurance on October 31st. We have a new policy being issued effective November 15th, which will cancel the higher insurance. The total savings equates to about $450, but it’s still over $300 more expensive than the original one that we walked away from.

TAXES

Central KY taxes were due this past month. I paid 4 houses worth of taxes. 3 were cashed immediately. I pay via online bill pay, where they send the check on my behalf, instead of online because there are fees associated with that. Well, now one of them is floating out there without my knowing what to do next. There’s a 2% discount if you pay before 11/2, and that check didn’t get cashed by that deadline. So now I have to make phone calls to track down why the check I sent via bill pay didn’t arrive, even though another one arrived just fine. I also have a city that I have to pay a small amount of taxes to, and I’m waiting for those two checks to cash as well.

NET WORTH

Our net worth is almost $100k over last month’s. Not reflected in the credit card yet is the payment for the hot tub that just happened this week. By next month’s update, I’ll have to pay off the 0% interest credit card, so the total credit card number probably won’t change drastically.