Tuesday, January 28, 2014

December Apartment Update

The December numbers just came in. Occupancy continued at 94% and revenue stayed about the same as last month. Next income dropped by about $11,000 to $14,000 however, due to an escrow analysis from our lender which discovered we needed to be putting more into our escrow account for insurance. This resulted in about a $6,000 increase in our monthly mortgage payment for the month.

We also found out the property suffered a "fairly significant fire" the first week of January, caused by a dry Christmas tree. Four units were destroyed and there was damage to the entire building, which contains 18 units. Thankfully, there were no injuries. An insurance claim has been filed and management expects full coverage, not only for damages, but also for rent loss until the building can be repaired and re-rented.

The escrow increase is a disappointment. That represents a 25% chunk of our monthly net income. No word on if this is a permanent increase, or the lender needed a lump sum to bring the escrow account up to a certain level and the regular monthly increase will be smaller. But, as the fire shows, insurance is needed.

Rent concessions almost tripled in December over November, but that's understandable, given it is a big holiday month and people likely need some encouragement to move during the holidays. I know I would.

For the entire year of 2013, the property ended up with a positive net income of just over $150,000. That's about $135,000 over budget. It looks like this was the turn-around year for the property.


ETF said...

dang, how much was the fire damage?

Shaun said...

I never saw a figure for the fire damage. But insurance covered it all.

© 2006 Shaun | Site Feed | Back to top