I always love reading blogs about other investors’ investment income. Watching other people’s investment income rise is my second favorite thing (the only thing better is watching MY investment income rise!)
Here is our investment income for June, 2020. This report includes income from dividends, interest, mutual funds, and rental properties.
Overview
June was a decent month for our passive income. Our dividend income was great (as it always is in the last month of a quarter) but our rental income was actually negative due to some upgrades on one of our properties.
Without further ado, here’s what our investment income looked like for the month:
Dividend & Interest Income
Total dividend income for the month was $15,553.82. This is up 10.7% from last June. Our dividend income is remarkably consistant.
Our cumulative dividends for the year through the end of June are up 14%.
My long-term goal is to have our dividend income increase by 10% per year, so we are still ahead of our goal pace.
Overall, a good month for our dividend income.
Rental income
This category includes net income from the 6 rental properties that my wife and I own, plus 50% of the income from 4 rental properties that we own with my mom. This number does not include appreciation of the properties or the decrease in the mortgage balance (those numbers show up in the net worth report).
However, this income is net of all mortgage, tax, and insurance payments. That is, this is a true cash flow report for our rental properties.
June was another poor month for our rental income. As I mentioned last month, one of our properties needed a significant number of repairs. In addition, the carpet needed to be replaced, and rather than go with carpet again we decided to upgrade to tile. While more expensive up front, the tile should have a longer lifespan and should enable us to get a higher monthly rent.
This investment has already paid off, as we were able to rent the property for $150 more per month than we’d previously been charging. The tile was about $1,000 more than the carpet, so we’re looking at a roughly 7 month pay-back period. That’s pretty solid.
Our average rental income for the last 12 months is $1,613.16, which is down significantly from the peak value of $2,268.30 in May. We are now DOWN 27% from where we were in June of last year.
As you can see in the table above, our rental income started strong in 2020 but our pace has slowed considerably. Posting a negative income this month has really set us back.
Total investment income this month
Total (dividend + rental) income = $14,607.44
Our trailing 12-month income dipped slightly to $100,670.38. As of April it was over $6,000 higher.
In the table above you can see that our cumulative total passive income through the end of June was up just 3% over the same period in 2019. The growth has been slowing down over the course of the year, primarily due to our rental income issues.
Looking at our trailing 12-month total income, you can see that our passive income has dipped a bit, breaking the overall trend of up and to the right.
Right now we are NOT on track to hit our goal of $115,000 in passive income for 2020.
Changes
No changes to our portfolio this month. We are still holding $300,000+ in cash, waiting for an interesting investment at a reasonable valuation.
I’d like to deploy another $200k, leaving us with about $100k in cash. I’d like to keep $100k in cash at all times just out of an abundance of caution.
Recap
Our dividend income was great, but our overall passive income was hurt by the turnover and repairs/improvements on one of our properties. In my experience that’s pretty normal for rental income – it varies wildly from month to month.
How did everybody else do with their investment income this month?
Are there any investments out there trading at reasonable valuations that I should be looking at?