Flipping Rich

So, its my own fault for ingoring my duty as an owner of rental property to complete my CRPs by January 31.

A CRP is a Certificate of Rent Paid, a form made by the State of Minnesota for landloards to distribute to tenants so that the tenant may get a refund for rent paid.

Either way, the forms are a pain in the ass. Property managers, you are worth your weight in gold. Luckily most of the prop mgrs I know are quite thin, golds increased in value you know.

Anyway, I was cringing as I fill this damn thing out. On the form, for each tenant, we need to state the total of rent paid in that year. Now, for the tenant that pays $600 a month (which does not seem too hefty) however I know on quite of few of these people the first thought they have upon reading that they have paid $7200 in rent over the year is that I am getting rich off them.

Well buster check this out. Your $7200 doesnt pay my annual property taxes! Meaning I need 1.5 tenants rent to pay my property tax, thats just one expense. On this particular building I have 14 units. Subtracting the 1.5 from 14 leaves 12.5 units of rent right?

1 unit of rent pays the gas bill. I am now on a budget plan so the monthly bill is relatively consistent.

Im down to 11.5 units of rent.

Electricity, water, trash, snow removal, common area cleaning, pest control, thats another unit.

Im down to 10.5 units of rent

General maintenance, fixing things that people broke, appliances,etc, roughly another unit per month.

Im down to 9.5 units of rent.

Insurance, yep, 1 unit.

Im down to 8.5 units.

Oops, mortgage payment, 5.5 units.

Im down to 3 units of rent.

Okay, thats $1800 a month as long as nothing major happens. This also assumes 1. all units are rented 2. all units pay their rent (neither 1 or 2 should be assumed).

This building in question - I just put in a new boiler. That cost $19,000. How many months do I need to break even, a few.

So whats it really worth? The 1am phone calls, “Im too drunk and cant find my keys”, theres a matchbox car stuck in the toilet, the “my dog ate my rent check”, this list, as you can imagine is endless, and painfull.

Rental property is not for the faint of heart. Its a tough, and THANKLESS job, and it pays shitty.

Yes, there are some neato tax benefits. Also, of course, the mortgage payment is being made by tenants (we pray), who are buying down the principal balance. So it works out in the end. But getting rich? Not anytime soon.

Lets give our landloard a big hug. That roof that isnt leaking as of this moment, they are providing it.