Wednesday, July 03, 2013

May Apartment Update

The May results for the Houston apartment complex are in and the good performance of April has continued through May. Occupancy remained at 94%. Positive cash flow was $8,700, a noticeable improvement over April's $7,500 (which was pretty good itself). There are still some legal issues with some vendors that are increasing the administrative expenses for the month and, once again, management says these are at reduced levels compared to the past and they should be decreasing.

Rent concessions increased by about $4,000 over last month, but the loss due to vacancy decreased by about $7,500. We did have to write off almost $6,000 in bad debt compared to no write-offs last month, but we also recovered $1,000 of bad debt. Our total income was just about $1,000 less than April.

Expenses for marketing dropped, as did those for capital improvements / replacements. This is what drove our bottom line higher than last month's.

We are still running in line with the budget. We're about $3,000 over budget in income for the year and $27,000 under budget for expenses. Unfortunately, we're also $22,000 over budget for capital improvements / replacements. But overall, the property is $8,000 over budget for net income, so I really have no complaints.

Well, that's not entirely true. I do have one complaint. Management seems to be very poor at handling investor's questions via email (or at the very least, at handling my questions). Last month, when I read the news about the ongoing legal costs for vendor issues, I sent them an email asking about how many issues were still outstanding. I got no response. After reading the May results this morning, I sent them another email asking the same question. I'm also somewhat bothered that it appears t be taking longer and longer for them to get the monthly reports out. I believe back when this investment started, the monthly report would be sent out maybe 2 or 3 weeks after the end of the month. Lately, it has been coming 5 weeks or so after the end of the month.

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