March Passive Income

GA

March went by so quickly that I didn’t even notice. LOL 🙂 However, I did notice a huge bump in my passive income.

Dividends from 3 companies: $49.10

CTL: $10.80

HCP: $3.70

F: $34.60

Income from Midwest Rental the $77K investment: $700

Income from Commercial Rental: $2000

Income from 1 of 2 unit: $1000

March Total: $3749

So far in 2017 total: $6179.58

January: $720.58

February: $1710.00

March: $3749

If I leave my investments alone and included my take home income from last year, my portfolio would worth $450K, I would have generate $18,000 with 4% yield. But my yield was around 2% so it would have only be $9,000. So, by shifting my investment, so far this year income is beating last year dividend income.

Additional income requires additional work:

I still have one unit that is empty. I’m changing my strategy now to make a partition wall, that doesn’t go up to the ceiling, so I can get away with applying for a permit. That way it’ll go from 2-bedroom to 3-bedroom apartment. The partition wall will give natural light from the former livingroom to the dinning room. Yup! So, I can safely add additional $250/mo income if I was going to rent the 2-bedroom out for $1000. With that said, it will be busy in the next couple of week for me.

Am I giving up on dividend income?

No, I’m not giving up, I’m just currently cash poor :P. I’m still waiting for my cash to come back.

I had poured all the money into rental property investment, what if the stock market collapse?

My 2 investments are paid in full. So, I only need to focus on insurance and taxes for them. If needed be, I might refinance to get some money out to invest in the stock market??!! I bought them for 1/3-1/2 of the current going rate. I figured I could still take all of my investment out, to follow the “no skin in the game” strategy. I’m not sure.

 

GA

21 Comments

  1. Seems like income from the rentals should account for expenses and the amount of passive income should be based on net income.

    • I agree with you.
      The Midwest property income is after expenses and taxes.
      The commercial the tenants are paying for utilities. I have a small utilities bill, I’m still calculating for taxes, insurance, and renovating expenses (should come out around $26K on top of the $296K or so closing cost), I’ll have to read my previous posts. LOL 🙂
      On that note: My dividend income is also pre-tax.

      I also took a massive capital gain selling BAC last year, … yikes. I don’t want to see my taxes bill. that’s for sure.

  2. That’s a nice income stream for the month of March. I know you are not abandoning DGI. I look forward to when things settle down with your real estate so you can focus again on dividend stocks. I enjoyed reading your buys/sells/ideas/etc. Close to $4k in a month is a nice amount no matter how you look at it. Thanks for sharing.

    • Thanks! I’ve been waiting for this day for so long. You have a massive portfolio also, I saw some massive gain on your site.

      Keep it up!
      Cheers!

    • Thank you for your words of encouragement. The road back to the same level might be rough, but I’m glad to have fellow bloggers like yourself to help me get there.

      Cheers!

  3. Awesome month! $4K per month is serious money!

    One question. How does the commercial property compare to residential property in terms of “passive” income and in terms of return?

    • I think it’s a lot “riskier” … if their business can’t make it, that means I don’t make it. That’s why I should have rent it at market price instead of 1/3 of the price.

      With that said, to make the restaurant owners to make it the first few months while their business is taking off … I only charge 1/3 of the price, it would leave room for me to increase rent 5% next year, and probably every year after that.

      If they totally fail… since they have a business set up, I have to find a new tenant, many months of not collecting rent while they get their restaurant the appropriate approval.

      With residential, it’s a bit easier, I think, just lower the rent and you’ll get somebody, especially the location is near 2 big university, 2 community college, and another not too famous university. It’s also 6 blocks from the hospital that I’m working at.

      As far as “passiveness”, it is a lot more “passive” than a residential. They take care of all the maintenance, it’s part of the contract. And they make the inside looks nicer, all the extra renovation that I didn’t want to do, they’d do it.

      They have a plumber that quote them $5600. I “yelled” at them for not having any more quote. hhihi I recommended a plumber that used to work for me, I drew up the plan for them (for free, I’m not a professional). So, that plumber charged them $1300.

      ** They keep hiring “big” companies, that the person who pickup the phone can’t make any decision, the guy who came to do the estimate doesn’t actually do the work himself. So to have a plan that I drew up, really give people a clear image of what they have to do, and a guy who own his own plumbing business, and actually doing the work will cut out all the cost.

      Anyhow, that’s my “passive” activities with the restaurant people, being positive, when they’re stuck, I hold their hand or point them into the right direction. But, I normally like to chat up anyway. My 1/2 hour here of there with them while I’m at the farmer market chowing down on great food is totally fine. LOL 🙂

  4. Now we are talking money! Well done Viv 🙂
    Looking at your yield, you definitely should consider re-financing and re-investing the proceeds. You have enough worth to play around with this and find a balance between cash-flow, yield and risk.
    Good luck with the last rental

    • I’m considering it now, that I feel like maybe a big correction is coming and I want a huge amount of cash on the side. LOL 🙂 But I have to balance between interest rate and the money that I take out. Mr.W doesn’t want me to borrow more money. I’ll have to do some analysis, talk to a mortgage broker of sort, we’ll see though. Not anytime soon though.

  5. Great month for you. Almost $4k is impressive for a single month. Those properties are really pulling their weight. And nice strategy for opening up the one for an extra room for income. Thanks for sharing.

    • Thank you for your kind words! The extra boost in encouragement is much needed. I’m glad you enjoy reading my passive income report.

  6. Nice cash flow! It’s really nice to see that all your hard work finally pays off now.

    I’d love to add real estates to my income portfolio, but unfortunately it’s insanely expensive over here (over 3500 $/m²) with a ROI mostly below 3%. So it’s nearly impossible to run them cash flow positive.

    • I see that instead of making 3% on real estate investment and you’ll have to do all the work, you invest in REITs, no missing out on Real Estate market, no work required, yielding 12% LOL 🙂 That’s the smarter way of investing. I have much to learn from you.

  7. Nice income. Unless you want to stick to a landlording start now working on other streams of income. Generally I am scared from renting properties. I do not like dealing with people who always complain about something, do not pay on time and other “sweeties” of this job so I never entered in this business (I had a few negative experiences in the past). But it looks like it works perfect for you. Nice work.

    • Thanks for stopping by and commenting. That’s the plan to use landlording income, Mr.W has a ton of cash lurking around for another true crash that doesn’t seem to come LOL :)… While the income can cover everything we want to do right now and with some surpluses that I’m planning on bulking up my emergency fund and eventually build up my dividend streams once-more-time. When we’re ready to leave this city for good, I might consider selling everything, but as of now, this give us a lot of options, we don’t have to worry about losing our job and be on the street the next day.

      • Ha, then I guess you are in good shape. A plan is the most important thing when dealing with money (investing or trading) and it sounds like you have one… Good luck.
        P.S. tell your other loved one that this market is not going to crash yet… The US economy is growing and accelerating. With a consistent investing into dividend stock even a crash can be successfully mitigated (although there is none round the corner yet). 🙂

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