Eight year numbers

[K. Mitchell]

I sat down and input my data for the last eight years into Excel.... Just thought I would share....

I like to think I am fully aware of my RE numbers as I think about them every day, but while the numbers and concepts were intuitive, some of them are a bit surprising.

As I acquired properties, my vacancy rate went down. Things didn't actually change. It looks like this happened only because the number of properties increased. Thus, the vacancies spread over more units. Similarly, when I had fewer properties, my vacancy rate would swing wildly--from 50% to 0% to 25%. With more properties, it stays in the 8-12% range. It seems that having more properties is less risky than having fewer properties.

With more properties, when I apply my average vacancy rate over the term (weighted for the number of properties) to my current properties, it comes out nearly to the dollar.... Good to know for future planning.

My actual expenses (and I counted very single penny, literally down to the postage stamps), are somewhat higher than I thought. Of all my expenses, repair expenses make up nearly 1/3d.

My repair costs were just over $200 per unit when I was really acquiring properties vs. the low $60 per unit when I am not acquiring properties--which makes sense as the make ready costs are larger when acquiring vacant properties.

If I had all properties mortgaged (which I don't), they would make up significantly less than 1/2 of all my expenses--so paying off the mortgages would add less than a 1/4 income boost--which is a lot less than I would have guessed. Guess I won't be paying off any more properties early.

Management fees are pretty nominal in comparison to all other expenses--which I wouldn't have guessed either.... Maybe it is the annoyance of seeing any amount for this line item, when I know I could do it myself (but see the last point below)...

My low income duplexes are killing my other higher income SFRs in terms of net income. The super low taxes (I didn't realize how low) and, to a lesser extent, mortgage payments are a big part of it. They also have lower vacancies and lower repair costs. I would not have guessed that was true.

And the one property I manage has the highest repair costs of any of them, even though the other properties had more extensive repairs.... Part of this is probably due to the markets they are in, but the other part is probably due to my PM having cheaper contractors/connections. Maybe I need to think about hiring a PM for this one too, as the savings there would pay for a PM....