Welcome to my monthly income report for December 2015!
Every month I will summarise the activities which took place that had a direct effect on my income. My hope is that you can learn from things that worked out well, and those that didn’t.
There are 3 key areas that form my reports: Letting Agents, Utility Bills, Income and Expenditure. Lets go!
I don’t believe it, I had another tenant leave Property 2 🙁
The letting agent told me that she had received a promotion at her work and that she needed to relocate ready for the new year. The thought of her not being happy with the property crossed my mind, but then I realised that most things can be fixed, and that the cost and hassle of moving is quite big, so she had no reason not to tell the truth. Besides, the other tenants all seem happy.
What surprised me, was that the letting agent asked me if I wanted to charge her an additional months rent for breaching her contract early! As one of the tenants had walked out the previous month, surrendering his deposit, I suggested that she should just do the same (a third of the price), which she was more than happy to do.
She is a nice person and was great tenant, and I wish her all the best in her new job.
I made one other change this month. I made the decision to let one letting agent of Property 2 go. Having two letting agents manage the same property was starting to make communications difficult, so I chose to stay with the agent who had provided the most tenants, who ironically charged the cheapest fees.
I made the decision this month, but the figures won’t be reflected on my finance report until January 2016 as the rent had already been collected for December.
Lastly, I had one tenant in Property 2 who didn’t pay their rent this month. This property has had lots going on since I got it up and running, and I hope it’s not a sign of things to come. In my experience, there are always teething problems at the beginning whilst things settle, so I won’t get too worked up about it now.
There are laws in place for dealing with non payment of rent, and I can’t take any legal action until two payments have been missed. So I will hold tight and wait until January 2016.
Last month, I wrote about the hassle I had with my utility provider for gas and electric in Property 1. I am pleased to report that after half a dozen phone calls amounting to about 5 hours of my life, the issue is now resolved.
My utility bill this month is bigger than normal, but that’s because I wasn’t charged anything last month while the two providers were trying to deal with the ‘erroneous transfer’.
My bills should be back to normal in January 2016.
Income and Expenditure
Here is the balance sheet for December 2015:
Property 1 – Let to 4 Students @ £115.00 pppw with bills included
|Letting Agent Fees @ 5.5% + VAT||£131.56|
|Gas & Electric||£270.79|
|Total Expenses||£1139.58 (B)|
|Net Income (A-B)||£853.75|
Property 2 – Let to 9 Professionals @ £70 pppw with bills included
|Letting Agent Fees @ 12.5% + VAT*||£270.90|
|Gas & Electric||£100.00|
|Total Expenses||£1,182.18 (B)|
|Net Income (A-B)||£1,127.81|
*4 rooms @ 12.5% + VAT and 5 rooms @ 10% + VAT
|Total Net Income November 2015||£1,981.56|
So my main learning this month is to only have one letting agent manage a property. It’s the first time I have owned a property of this size and because it took me longer than expected to let it, I took what I was offered at the time.
If I come across a similar situation again, I will go with the first agent that acquires tenants and then continue to advertise with other agents for additional tenants, but on a finders fee basis only. That way, I will only have one managing agent from the start.
My total income was slightly less than the previous month, and that is mainly due to a late payment of rent.
I hope you found this income report useful, and if you have any questions, please leave a comment in the box below.