It was also a great month because I accomplished several things.
Look for a discount! Sometimes it pays to pick up the phone.
I'm guilty of relying on the web for just about everything. In fact, I forget that I can do business over the phone still. In February, there was an unexpected problem with my car that rendered it undriveable. I was at the mechanic's shop, and I jumped online to rent a car. There wasn't a single car available in Tampa Bay. I mentioned this to my service advisor, and he picked up the phone to call Enterprise. In under 60 seconds he had a car for me, at a really nice rate. I had just checked online, and there was nothing.
A couple more examples. My Internet bill at the AirBNB went up unexpectedly. Most people would probably just pay the extra $10, assuming that prices naturally go up with inflation. I looked online and couldn't find anything, so I called support. All I had to do was agree to a 12 month contract, and I was able to keep the old rate. I saved $120 and all it took was a 5 minute phone call.
One last example of looking for a discount. My new health insurance doesn't include prescription drug coverage. I had a sinus infection and went to Walgreens to fill a prescription for an antibiotic. I was shocked at the price: $72! My friend was with me, and she asked if I had a Florida Discount Drug Card. I had never heard of it, but getting one took 2 seconds and was free. I literally just entered my name on a website and it generated an electronic card. The pharmacist entered the card number, and the prescription price dropped by $39.
Taxes Are DoneI filed my taxes, which is always a big stress due to their complexity. I received a substantial refund due to losses on my rental properties last year, and used the refund to finally catch up on all my credit card bills. That's right - I'm back to a zero balance on everything.
No More Townhouses!Second, I sold the townhouses. I had been putting this off for years because it seemed easier to just hold onto them. They were decent investments from a cash-flow perspective, but the area has gone way downhill. A burglar was shot and killed in one of the neighbor's townhomes, random drive-by shootings had happened nearby, and drug activity was everywhere. The last straw was when I went to Birmingham in January to work on a vacant townhouse. Several of the other units were looking pretty shabby. It was obvious that the owners (mostly landlords like me) weren't properly maintaining their properties. Since I had not been able to raise rents for several years, while other costs were climbing, I thought it was time to look for a way out. It also helps that the economy is firing on all cylinders, including real estate, so I feel like I got a fair price. I sold all 5 townhouses to one investor in a package deal. One and done.
Record AirBNB Income
March was an incredible month, as every single day was occupied at our AirBNB. We grossed over $3,700 in March, a record. What's even better, I could have made more. Next year I know to charge more during the month of March.
My new normal is a month with about $3,500 less in rental income due to the sell of the 5 townhouses. Much of that went towards property taxes, insurance and fire dues, as well as substantial turn costs whenever there was a vacancy. Still, I would like to replace that income. I'm leaning towards buying another AirBNB property, but prices are really high right now, so this may take time.
We should start seeing positive cash flow again even without replacing the townhouses. The next big cash outflow won't be until property taxes are due at the end of the year. I just renewed the insurance policies, and don't expect any vacancies the rest of the year. I will use the cash flow for a few things:
- I need to build up a cash reserve for turn costs and property tax bills. $10,000 is probably what I need.
- I want to invest more in our existing AirBNB. Because it's an old house, there is a long list of repairs and improvements I would like to do. Now that I know it's cash-generating potential, I want to spend a little money making it nicer and being proactive. By proactive, I mean replacing the water heater and air conditioner sooner rather than later, before they break.
- I'd like to spend some money in the backyard at our new house. We only have a small concrete porch. I'd like a sunroom, or at least a covered sitting area. My partner wants a fence, which probably isn't a bad idea, either.
To sum things up, March was a wonderful month! Life just became a little bit easier. April will be a busy month, so bring it on! We have a week-long meeting in Nashville followed by a meeting in Orlando. The AirBNB is nearly sold-out for the month, so that too will keep us occupied. In my spare time, Amazon. I feel as if everything is firing on all cylinders.